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12/21/2007



Rail News: M&A

CN to Chicago-area communities: Think about 'J' acquisition's broad rail efficiencies, not adverse effects



The proposed Elgin, Joliet & Eastern Railway Co. (EJ&E) deal should draw public attention in the Chicago area for its broad rail transportation efficiency and environmental benefits and not for adverse impacts to communities, Canadian National Railway Co. officials believe.

CN is seeking Surface Transportation Board approval to acquire a major portion of the 198-mile EJ&E, which operates a mainline that encircles Chicago, and name the operations the EJ&EW West Co. In September, the Class I reached a deal with U.S. Steel Corp. to acquire most of the EJ&E for $300 million.

The acquisition “will be the latest in a series of progressive solutions designed to improve the efficiency of its operations as well as the flow of general rail traffic through the greater Chicago area,” said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement. “CN in recent years has developed innovative routing protocols with other major carriers to divert some rail traffic previously interchanged in Chicago to other locations across the central United States. But more needs to be done if Chicago is to play its role as a critical rail transportation hub for the country."

By dispersing trains along the "J" arc on the periphery of the Chicago area, the transaction would reduce rail congestion in the city’s inner core; provide increased transportation capacity in the region; generate significant environmental benefits; provide a head start for the Chicago Region Environmental Transportation Efficiency Program (CREATE), with CN committing $400 million to create capacity on the Chicago rail network; and enable the city to realize its goal of vacating CN trains from the St. Charles Air Line more quickly than under CREATE's proposal, CN said.

Next month, CN plans to launch the next phase of its community outreach program by hiring experts to help affected communities prioritize road crossing and other environmental issues.

"CN is seeking a constructive dialogue with key stakeholders to find practical means of implementing the transaction in ways that balance the specific needs of communities with the Chicagoland's need for a cleaner, safer environment and a more efficient rail transportation network,” said Harrison.


Contact Progressive Railroading editorial staff.

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