(Reuters circulated the following story by Nick Carey on September 11.)
CHICAGO — By all accounts, the U.S. will need more rail tracks in the coming years to handle freight for a growing population’s needs, but laying down any new rails is a sure way for companies to stir up fierce local opposition.
Rarely is local opposition as well-organized and well-funded as in the leafy, wealthy Chicago suburb of Barrington, where politicians and residents are protesting Canadian National Railway’s proposed acquisition and expansion of the Elgin Joliet & Eastern Railway.
The growing furor at CN’s plan to use this sleepy loop around Chicago to circumvent its chronically clogged rail network is being watched carefully by other railroads to see how regulators handle the issue.
“The rail industry is keeping a pretty close eye on CN’s bid for the EJ&E and the opposition to it,” said Tom Mentzer, a logistics expert at the University of Tennessee. “This is one of a few test cases out there at the moment.”
Analysts say the core issue is whether to pursue infrastructure projects without government support.
“The EJ&E case is symptomatic of the two faces that government shows on railroad issues,” said Anthony Hatch, an independent railroad analyst. “On the one hand, politicians support trains as safer, environmentally friendly and a good way to get freight off congested highways.”
“But at the same time they pander to local political interests and campaign to have vital rail projects anywhere else but here,” he added.
Local interests were in evidence at a hearing in Barrington last week on the EJ&E deal. Some 500 local people, including many children, marched in protest.
Barrington resident and realtor Patty Ancoma said CN plans for 20 trains a day to rumble through this town of 10,000 — compared to a handful now — will wipe 30 per cent off property values. The median home value in Barrington in 2005 was $505,800.
“This will destroy our community,” Ancoma said.
To make the project acceptable to residents, local politicians suggest putting the EJ&E in a trench under the three busy roads it crosses.
CN says it is willing to spend $40 million to ease the impact of the extra trains along the EJ&E, on top of $300 million it would pay for the line and $100 million for track upgrades. But it says putting the track below ground would cost far more, and would require government funding.
At the hearing, local members of Congress lambasted the deal, to standing ovations.
Questioning whether an initial report on the impact of the deal on communities had been compiled by the Surface Transportation Board — the regulator charged with approving or rejecting it — or by CN, Republican Congressman Don Manzullo roared at board officials: “I’m here to remind you that I’m a member of Congress and I demand some answers.”
Melissa Bean, a local Democratic member of the House of Representatives, questioned whether government aid should be given to a foreign company.
“(CN’s) shareholder upside should not be paid for by American taxpayers,” she said as the crowd rose to its feet.
CN says it understands residents are concerned about the impact of more trains.
But it argues Chicago will benefit. CN says Chicago’s rail congestion is so bad it takes as long for CN trains to cross 50 kilometres of the city’s network as it does to travel more than 1,400 kilometres from Winnipeg.
“We need a balance between local concerns and national infrastructure needs,” said Karen Phillips, the railroad’s vice-president for government affairs.
Studies in recent years have said a growing U.S. population and rising highway congestion mean more railroads are needed.
In 2007, the American Association of State Highway and Transportation Officials estimated that U.S. truck freight will double by 2035 and rail freight by 2040. The association said apart from massive investments in the creaking U.S. highway system, $195 billion is needed for new rails over the next 20 years — $53 billion from taxpayers.
“It is seen as inevitable in the industry that absolutely necessary infrastructure projects can and will run into local opposition,” said Tom White, a spokesman for the Association of American Railroads.