CN petitioned the United States Court of Appeals for the District of Columbia Circuit for an expedited ruling ordering the Surface Transportation Board (STB) to render a final decision on the transportation merits of 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.
'Given the substantial, wide-ranging public interest benefits of our planned acquisition of the EJ&E, we cannot permit regulatory delay to imperil this transaction,' said CN President and Chief Executive Officer E. Hunter Harrison.
'We are convinced - and many business and community leaders agree - that the transaction will be good for the Chicago region as a whole. It would ease rail congestion, which is critically important to the region's economy and its continued role as one of America's most important transportation hubs. If unaddressed, rail congestion threatens $2 billion of dollars of production and 17,000 jobs in the Chicago region over the next 20 years.
'Second, the 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 inner Chicago would see decreased rail operations. In fact, 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.'
Faced with a Dec. 31, 2008, deadline for completing its purchase of the EJ&E, CN last month proposed a reasonable compromise to the STB that would have allowed the agency to rule on the transportation merits of the EJ&E acquisition while completing its environmental review of the transaction. During this environmental review, CN proposed to maintain an 'environmental status quo' by which CN would not shift any of its trains to the EJ&E until that review had been completed. But the agency last week denied CN's petition.
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. CN has committed an additional $100 million for integration, new connections and infrastructure improvements to add capacity on the EJ&E line and allow network synergies to be realized over time. CN has also committed roughly $40 million to mitigate the impacts of increased train traffic along the EJ&E.
More information on the transaction, including a map of the areas served by the EJ&E and CN, is available by clicking on the EJ&E Acquisition icon on the About CN section of its website www.cn.ca/About CN
