(CN issued the following on October 30.)
MONTREAL — CN today filed with the United States Surface Transportation Board (STB) its application seeking regulatory authorization to acquire the principal rail lines of the Elgin, Joliet & Eastern Railway Company (EJ&E).
CN and United States Steel Corporation announced Sept. 26, 2007, an agreement under which CN will acquire most of the EJ&E for US$300 million, subject to STB approval. The railroad operations to be acquired by CN will become the EJ&EW West Company (EJ&EW). CN is asking the STB to consider its EJ&EW acquisition as a minor transaction, which would permit the Company to assume control of the EJ&EW in mid-2008. Upon STB approval, EJ&EW would assume the EJ&E name and reporting marks.
CN’s STB application describes the public benefits of the transaction, the absence of any competitive harm from it, the minimal labor impacts and the overall positive regional environmental impacts flowing from the transaction, and plans for a straightforward integration of CN and EJ&EW operations.
In his verified statement filed in connection with CN’s STB application, CN President and Chief Executive Officer E. Hunter Harrison said: “The EJ&EW transaction would promote the public interest in a more efficient and reliable rail transportation system and would have no adverse competitive or safety effects. The EJ&E lines CN plans to acquire are a strategically important link in our network, and acquiring them would allow us to dramatically increase the efficiency of both our own operations and those of other carriers in Chicago.”
The EJ&EW would provide the “missing link” to connect CN’s five existing lines entering Chicago, filling a void in its network that has caused the Company delays and higher costs. The acquisition would result in improved reliability and service to both CN and EJ&EW customers.
CN said in its STB filing that the transaction would reduce rail traffic congestion in Chicago’s inner core and increase rail capacity for carriers operating in the city by dispersing CN trains along the EJ&E arc on the periphery of the Chicago metropolitan area. The public would also benefit from CN’s plan to spend approximately US$100 million to upgrade the EJ&EW’s infrastructure.
The transaction would advance the broad objectives of the Chicago Region Environmental and Transportation Efficiency Program (CREATE) and make it possible for the City of Chicago to realize its goals with respect to seeing trains vacate CN’s St. Charles Air Line more quickly than under CREATE’s Central Corridor scenario. Moreover, CN’s use of private investment to produce re-routing benefits in the near term would save taxpayer dollars, and lessen community disruption and dislocation that would be associated with construction of the CREATE Central Corridor. CN will also work closely with Metra and AMTRAK on commuter- and passenger-rail operations.
CN said the overall environmental effect of the EJ&EW transaction would benefit the greater Chicago metropolitan area, and that the re-routing of its trains from the City’s inner core to the outskirts of Chicago would reduce the railroad’s total environmental impact in the region. CN expects that more efficient movement of its trains would improve fluidity and lead to fewer interruptions and less interference with vehicular traffic in the urban core.
CN is now engaged in preliminary discussions with communities on the EJ&E that would see increased rail traffic as a result of the transaction, and will work with these communities to jointly find ways of addressing any specific concerns.
An electronic version of CN’s STB application is available by clicking on CN STB application here.