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Rail News: Rail Industry Trends

CN, Amtrak reach agreement on Chicago route usage; new study outlines benefits of 'J' deal


While it continues to await Surface Transportation Board (STB) approval for the proposed Elgin, Joliet & Eastern Railway Co. (EJ&E) transaction, Canadian National Railway Co. is making progress with easing some of the opposition to the deal.

Yesterday, CN announced it reached an agreement with Amtrak that will provide the national intercity passenger railroad continued access to the St. Charles Air Line route between Chicago's Union Station and downstate Illinois destinations, such as Carbondale and Champaign. The pact is based on commitments CN made to Amtrak and the STB earlier this year.

Amtrak agreed to notify the STB that it’s withdrawing any opposition to CN's proposed acquisition of the EJ&E’s principal lines. In addition, CN and Amtrak will ask the board to impose the requirements outlined in their agreement as conditions to the transaction’s approval.

The pact will enable Amtrak to use the route indefinitely if the STB approves the EJ&E transaction. CN agreed to maintain the route to existing standards and cap Amtrak’s cost for using a certain portion of the line.

“By safeguarding Amtrak's access to [our] network … CN is recognizing the needs of intercity passenger rail in the region and demonstrating again its commitment to a comprehensive voluntary plan to mitigate the impact of the EJ&E acquisition on community stakeholders,” said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement.

CN continues to urge the STB to issue a final decision on the transaction by the Dec. 31 so the Class I can meet a purchase agreement deadline.

Meanwhile, Chicago Metropolis 2020 recently released a study that shows the EJ&E transaction would spur growth of $267 million in the nation's Gross Domestic Product, including more than $60 million in the Chicago region's Gross Regional Product.
CN would create 649 new jobs in the region with total annual salaries of $39 million and the area’s annual sales would increase more than $160 million, according to the study commissioned by Chicago Metropolis 2020, a business-based civic organization. The study was conducted by the Economic Development Research Group and Carl Martland, a freight consultant and senior research associate at the Massachusetts Institute of Technology.

The study also found that switching CN trains to EJ&E lines would free up track Metra could use to add service on its North Central line, and reduced wait time for all freight-rail traffic in the region would result in an annual cost benefit of $49 million for railroads and shippers.

Contact Progressive Railroading editorial staff.

More News from 12/4/2008