(The following story by Scott Deveau appeared on the Financial Post website on December 20.)
OTTAWA — Canadian National Railway Co. went on the offensive yesterday in an effort to stem the rising tide of opposition to the railroad’s US$300-million acquisition of Elgin, Joliet, & Eastern Railway Co.
Hunter Harrison, CN chief executive, urged those in the Chicago area who oppose the deal to consider the benefits it would bring, arguing that too much emphasis has already been placed on the “the potential adverse impact” the acquisition will have on the region.
“The merits of our EJ&E transaction are compelling – compelling for commerce, transportation efficiency and the environment of the greater Chicago region,” Mr. Harrison said in prepared remarks yesterday.
CN agreed to purchase the principal lines of EJ&E in September in an effort to alleviate the congestion it was experiencing in the Chicago area.
The country’s largest railway aims to divert hundreds of trains a day out of Chicago along the EJ&E lines in an effort to bypass the congested city core.
Mr. Harrison said the bypass plan would not only increase the speed of commerce, but would also allow for added transportation capacity in Chicago area, at time when demand for rail transportation is expected to rise. Speeding the trains through the region would also reduce idle time of trains and their emissions, he said.
EJ&E operates about 320 kilometres of track around the outskirts of Chicago, and CN intends to invest about US$100-million in improving the EJ&E rail lines.
However, the Barrington Communities Against CN Rail Congestion, a coalition of seven municipal governments in the Chicago area, has been very vocal in opposing the deal.
Karen Darch, coalition spokeswoman and president of the village of Barrington, said the EJ&E lines cut right through the centre of her small town, which is located about 55 kilometres northeast of Chicago.
There are three major rail crossings in Barrington within a mile of each other, all of which can be blocked at once by a passing train for up to six minutes, she said.
More trains passing through the area will not only wreak havoc on traffic, but may also compromise response times of emergency vehicles, she said, particularly in the coming years as the Port of Prince Rupert comes on line and more traffic runs along those rails.
“We’re thinking 20 trains is a low number. Really, their growth over these lines, and they’re saying this too, is going to be a lot,” Ms. Darch said.
If the deal is approved, the coalition is urging CN to implement noise mitigation measures and grade separation at the rail crossing, so that traffic can pass over the added trains unencumbered.
When the EJ&E deal was announced, CN had hoped it would close by mid-2008. However, late last month the STB ordered a lengthy environmental review of the transaction – a process that has taken between 18 months and “several years” to complete in the past, the board said.
CN, however, said it still expects to complete the transaction by the end of 2008, saying that those previous reviews were on much more complicated acquisitions.