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Rail News: M&A

CN urges Chicago-area communities to adopt a 'more balanced perspective' toward EJ&E transaction


Although there are legitimate concerns about traffic delays at grade crossings and potential environmental impacts, communities affected by Canadian National Railway Co.'s Elgin, Joliet & Eastern Railroad (EJ&E) plan will note more benefits than detriments if the plan is carried out, according to a statement the Class I issued yesterday.

CN plans to acquire the EJ&E's principal lines — which encircle Chicago — for $300 million and spend $100 million to upgrade track and construct new connections. The Surface Transportation Board (STB) is reviewing the transaction.

A preliminary assessment conducted by CN shows traffic delays at crossings would be reduced for the entire Chicago region. Currently, CN trains pass through more than 150 crossings in the area; under its proposal, the Class I would operate over underutilized EJ&E tracks and impact fewer crossings.

The assessment also shows noise and other environmental impacts would be manageable, subject to agreed-upon mitigation measures with affected communities and the outcome of the STB's environmental impact study. Train counts would increase, by 15 to 24 trains per day, but a "number of communities inside the EJ&E arc have for a long time coexisted harmoniously with rail lines carrying more than 100 trains per day," CN officials said in the statement.

"CN is cooperating with the STB's environmental assessment," said President and Chief Executive Officer E. Hunter Harrison. "We believe that the facts will demonstrate that the EJ&E transaction would not only reduce traffic congestion in the nation's critical Chicago rail hub, but that the transaction would also have a positive overall impact on the environment of the region."

CN officials disagree with various demands by some affected communities, such as lowering a portion of the EJ&E line into a trench in Barrington, building an entirely new line further outside Chicago and constructing a number of grade separations

"Such unprecedented and costly mitigation demands are clearly premature and appear to be unwarranted," said Harrison. "While CN is prepared to implement a range of appropriate and realistic mitigation solutions, it should not be expected and is not in a position to accept the burden of such demands. I would urge community leaders and policy makers to carefully assess the facts and adopt a more balanced perspective towards the EJ&E transaction."