(The Canadian Press circulated the following on September 11.)
MONTREAL — Canadian National Railway Co. threatened yesterday to ask a court in Washington, D.C., to force U.S. regulators to rule quickly on the Canadian company’s proposed purchase of a Chicago-area rail line, a deal that could collapse if it isn’t completed by year-end.
An executive for the Montreal-based railway said CN wants a U.S. district court in Washington to order the U.S. Surface Transportation Board to stick to the timetable to approve the deal by the end of this year.
He argued the regulator originally designated the $300-million purchase of Elgin, Joliet & Eastern Railroad to be minor and that means the approval process should be concluded quickly.
“We think the law is very clear,” CN vice-president Jim Foote told an RBC Dominion Securities Inc. conference in Toronto yesterday. “The law says when you deem it a minor transaction you’re supposed to approve it in six months.”
The company has been increasingly frustrated by the regulatory process. The STB has said it will hear public hearings on the environmental aspects of the deal before making a final ruling, probably in early 2009.
CN has said previously it would take legal actions to speed up the regulator and has proposed that the STB make a partial approval of the deal with environmental safeguards in place.
It has offered to not use the railway corridor and abide by recommended environmental mitigations if the transaction could be completed before the Dec. 31 deadline imposed by seller U.S. Steel.
The purchase has run into opposition from communities near the corridor. They contend it will increase train traffic and undermine safety at grade crossings.
CN denies the claims.