(The following story by Andre Salles appeared on the Beacon News website on August 7.)
CHICAGO — The battle over Canadian National Railway Corporation’s plan to buy the Elgin, Joliet and Eastern rail line could be headed to court soon.
On Wednesday, CN announced it would be “seeking legal relief” against the Surface Transportation Board, the federal body that approves all railway transactions in the U.S.
Last month, the STB issued a draft of its environmental impact study on the EJ&E deal, examining the safety, traffic and environmental issues the transaction could raise.
At the same time, the STB rejected the railway company’s request to wrap up the transaction by the end of the year — and it’s that decision that CN may take to court.
According to Karen Phillips, a vice president with CN, the company is over a barrel — its deal with United States Steel Corporation, owners of the EJ&E, may only be good until Dec. 31.
The stock purchase agreement between the two companies expires on that day, Phillips said Wednesday, and though CN has asked for an extension, U.S. Steel has not granted one.
At the same time CN has been trying to speed up the approval process, local leaders have been trying to slow it down. Earlier this week, members of the Illinois congressional delegation joined in a field hearing about the sale, receiving testimony from local elected officials and state agencies.
By the end, legislators criticized the STB for not taking enough time on its impact statement, and not fully examining the potential harm of increased train traffic through certain suburban areas. The deal, as proposed, would divert trains from CN’s lines in Chicago through the suburbs; and in some areas would quadruple the number of freight trains running down those lines each day.
‘Belligerent behavior’
Opponents of the sale were not pleased with CN’s announcement. In a written statement, members of The Regional Answer to Canadian National (TRAC), a consortium of roughly 40 communities opposed to the buyout, charged CN with “arrogance and callous behavior towards the damage this transaction will create,” and called out their “consistent disregard and disrespect for the process and the affected communities.”
Aurora Mayor Tom Weisner, who is co-chairman of TRAC, said it’s clear CN does not want a thorough evaluation of the impact of the sale.
“I think (at this week’s hearing) we had a number of people testifying that the STB process itself is narrow and quick,” he said. “And now it’s not narrow or quick enough for CN.”
Karyn Robles, head of Naperville’s transportation team, said a longer review time and comment period is in the public’s best interest. She said Wednesday’s announcement shows “their bottom line is getting the transaction completed,” not working with local communities.
And Rep. Bill Foster, D-Geneva, responded with a strong written statement, concluding, “CN is the ultimate bully. They don’t care to listen to our concerns and, when pressed, they now threaten to sue. I have news for CN — we won’t be railroaded by their belligerent behavior.”
CN: Regional benefits
The STB has set a 60-day comment period on the draft study, which ends Sept. 30. After that, the final impact study could be released in December or January, which would put the final decision on approval as late as March 2009.
The STB declined comment Wednesday.
Canadian National’s Phillips believes the STB has taken enough time. The railroad’s application was accepted in November of last year, and the STB should be able to complete the approval by the end of 2008, she said. She touted the larger regional benefits of the transaction, saying that twice as many communities would see train traffic reductions because of the sale.
Phillips said the railway company continues to meet with local communities, working toward voluntary mitigation agreements.
“Our decision to move forward and seek legal relief was precipitated by U.S. Steel,” Phillips said. “Our commitment to working with the local communities has not wavered.”
Phillips said a decision on what form of relief CN would ask for could be coming in the next couple of days.