(The following appeared on the Daily Herald website on December 16.)
CHICAGO — Union Pacific Corp. told U.S. regulators that Canadian National Railway Co. is interfering with its track rights on a Chicago-area railroad that the Canadian company wants approval to buy by the end of 2008.
Canadian National “has unlawfully exercised premature control of Elgin, Joliet & Eastern Railway Co. by interfering with the efforts to implement” a 2003 agreement to use the line, lawyers for Omaha, Nebraska-based Union Pacific wrote in a letter filed with the U.S. Surface Transportation Board.
The Union Pacific letter is a possible hitch in Canadian National’s efforts to complete the EJ&E acquisition this year. Canadian National agreed to the $300 million purchase in September 2007 and has said that the seller, U.S. Steel Corp., might halt the transaction if it’s not done by the end of 2008.
Union Pacific, the largest U.S. railroad, said in its letter that Canadian National, Canada’s biggest, successfully “insisted that EJ&E cease efforts to carry out its agreement” with the U.S. company. Union Pacific wants the board to hold up any approval of Canadian National’s acquisition until its rights to use the line are resolved.
Karen Phillips, vice president of U.S. public affairs for Montreal-based Canadian National, didn’t immediately return a call seeking comment.
The U.S. regulator is evaluating the effect of the planned purchase, and issued a final environmental impact statement last week. Canadian National said on Dec. 12 that publication of that report in that day’s Federal Register should clear the way for the board to “promptly issue” a decision on the transaction.
Some Chicago suburbs have said that they would be harmed by increased rail traffic as a result of the purchase and have sought to block the deal.