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12/8/2008



Rail News: Rail Industry Trends

STB releases final environmental report on CN/EJ&E deal; Class I reaches agreement with Indiana town


The Surface Transportation Board (STB) has completed an environmental review of Canadian National Railway Co.’s proposed Elgin, Joliet & Eastern Railway Co. (EJ&E) acquisition. Now, it remains to be seen if the board will issue a final decision on the transaction by year’s end — something CN says is necessary to complete its deal with U.S. Steel Corp.

On Friday, the STB announced that its Section of Environmental Analysis (SEA) issued a Final Environmental Impact Statement (EIS) on the transaction, which calls for CN to acquire most of the EJ&E from U.S. Steel for $300 million and rename the operations the EJ&EW West Co.

The Final EIS incorporates more than 9,500 comments on a Draft EIS submitted by members of the public, agencies, elected officials, organizations, businesses and other stakeholders. The environmental report recommends that CN fund: 15 percent of the cost for grade separations near Aurora and in Lynwood, Ill.; costs associated with installing closed-circuit TV cameras to assist 13 emergency service responders in Illinois and Indiana; and costs necessary to maintain a quiet zone in Barrington, Ill.

The Final EIS also states that CN should establish a local resource agency liaison or liaisons with expertise in environmental and natural resource management to work closely with federal, state, and local natural and water resource agencies to develop adaptive natural resource management plans. In addition, CN should submit quarterly reports to SEA documenting progress in implementing mitigations imposed by the STB.

CN expects to meet all of the STB's mitigation standards under a mitigation program that would cost about $60 million, the Class I said. The railroad also plans to spend $100 million to improve the EJ&E’s infrastructure.

Meanwhile, CN last week reached an agreement with Dyer, Ind., that resolves the town’s issues with the proposed acquisition. The Class I agreed to help create quiet zones and take various steps to improve train operations, safety, communications and emergency preparedness in the town.

"This is CN's third mitigation agreement with a community along the EJ&E, following pacts signed with the cities of Joliet and Crest Hill,” said Gordon Trafton, CN senior vice president-Southern Region, in a prepared statement. “We will continue talks with other municipalities on the EJ&E line in hopes of reaching similar voluntary mitigation agreements."


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