CN said the Surface Transportation Board (STB) should proceed quickly with a final decision on the CN's proposed acquisition of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E) to allow the transaction to close by the parties' Dec. 31, 2008, deadline.
CN is urging the STB to do so after the United States Court of Appeals for the District of Columbia Circuit denied its petition for an order compelling an immediate STB decision on the merits of the transaction. CN petitioned the Court on Sept. 18, 2008.
E. Hunter Harrison, CN president and chief executive officer, said: "While CN is disappointed with the Court's decision, we remain committed to the EJ&E acquisition and we see no reason why the STB cannot rule on the transaction quickly to permit it to close by year-end.
"It is now up the STB to do the right thing, to preserve an important transaction with broad transportation and other public benefits for the Chicago region and the nation. The Board should render a positive decision in the early part of its previously announced December 2008-February 2009 timetable for a final ruling. The US Department of Transportation, the National Industrial Transportation League and other stakeholders have called for an expeditious STB ruling to keep the transaction on track.
"If such an approach isn't possible, the STB should revisit and adopt our previously offered 'conditioned approval' approach, in which the Board could issue a decision on the transportation merits of CN's application at this time, while allowing the agency's environmental review to continue to completion. That approach would allow the transaction to close by year-end 2008, with CN respecting any STB order to maintain an 'environmental status quo' under which it would not shift any CN trains to the EJ&E until the STB completed its environmental review."
In the meantime, CN will continue to work with each of the communities along the EJ&E line to reach mitigation agreements to address specific community concerns associated with increased train traffic, as it has successfully done with the City of Joliet. CN has developed a comprehensive voluntary mitigation plan in which its has committed to meet all of the STB's established mitigation standards under a program that would cost about $60 million, in addition to the $100 million CN has earmarked for infrastructure improvements on the EJ&E.
"National transportation policy promotes carrier investment in enhanced railroad capacity to meet the demand for fuel-efficient and environmentally friendly freight rail transportation," Harrison said. "The STB should honor that policy and act in a timely way to encourage important infrastructure investment at a critical time. It must not risk the loss of the benefits of this important transaction, including reduced rail congestion, more efficient rail service, and economic growth. If the STB chooses not to approve the transaction, it risks creating an environment that will deter similar beneficial investments in the future."
CN's EJ&E transaction would benefit the environment of the overall Chicago region. For every community along the EJ&E line in the suburbs of Chicago that would see increased train traffic as a result of the transaction, nearly double that number along CN lines in central Chicago would see decreased rail operations. In fact, the City of Chicago and roughly 60 communities inside the EJ&E arc would benefit from reduced train traffic as a result of the transaction. That would mean a better quality of life for residents of the Chicago region, with less pollution, fewer idling trains and fewer blocked crossings.
CN and U. S. Steel, the indirect owner of the EJ&E, announced on Sept. 26, 2007, an agreement under which CN would acquire most of the EJ&E for $300 million, subject to regulatory approval by the STB.
