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2/26/2009



Rail News: Rail Industry Trends

CN should be held to STB-imposed mitigation conditions in EJ&E decision, Sen. Durbin says


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Yesterday, Sen. Dick Durbin (D-Ill.) sent a letter to the Surface Transportation Board (STB) that urges the agency to stand firm in its decision to require Canadian National Railway Co. to meet certain mitigation requirements as part of the Elgin, Joliet & Eastern Railway (EJ&E) transaction.

CN has appealed a STB decision in federal court that requires the Class I to cover 78.5 percent of the cost of mitigation projects in Lynwood, Ill., and 67 percent of similar project costs in Aurora, Ill. — primarily the construction of overpasses or underpasses at two grade crossings. The board’s final decision stated that if a construction contract for the mitigation projects is not in place by 2015, CN will automatically be released from their mandated financial responsibility related to the Lynwood and Aurora work.

The STB should require CN to keep the money slated for mitigation projects in a trust account and ensure the railroad doesn’t “evade its responsibility to pay for mitigation because of time deadlines,” Durbin said in the letter. Removing the construction contract deadline would eliminate the incentive for CN to “run out the clock” on meeting their environmental responsibilities to the communities along the EJ&E, he wrote.

“CN’s efforts to undermine the board’s authority and reject their board-mandated responsibilities could significantly delay communities moving forward with projects that can reduce the effects of increased rail traffic,” said Durbin in a prepared statement. “This court challenge … raises the question about the future of other commitments and agreements CN has made.”

Late last month, CN completed a deal with U.S. Steel Corp. under which the Class I acquired a major portion of the EJ&E for $300 million. The STB approved the deal on Dec. 24 — along with certain mitigation conditions — and set an effective date of Jan. 23. CN currently is implementing a step-by-step integration of the acquired lines, which encompass 198 miles of track encircling Chicago.


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