Canadian National gets STB go-ahead for rail acquisitions

Canadian National gets STB go-ahead for rail acquisitions    The U.S. Surface Transportation Board Friday approved Canadian National’s acquisition of three railroads that serve the steel industry as part of the railroad’s purchase of Great Lakes Transportation LLC.
   Canadian National said last October it had agreed to buy two short line railroads, a switching company and a fleet of eight Great Lakes bulk vessels for $380 million. The railroads are:
   * The Duluth, Missabe and Iron Range Railway Co. a 212-mile railroad that carries iron ore from Minnesota’s Mesabi iron range to Iowa and Wisconsin for transfer to connecting railroads or lake vessels serving steel mills in the East, South or Midwest, including key customers U.S. Steel and Ispat-Insland Steel.
   * The Bessemer and Lake Erie Railroad Co., which primarily carries coal and iron ore between the Lake Erie port of Conneaut, Ohio and blast furnaces in the Pittsburgh area, including U.S. Steel, Ontario Power Generation and AK Steel.
   * The Pittsburgh & Conneaut Dock Co., a switching railroad that handles ship-to-rail and rail-to-ship transfers for the Bessemer and Lake Erie.
   “This minor transaction connects two transportation systems that do not compete, but complement each other, and will improve rail transportation in this part of the Great Lakes region,' said Roger Nober, STB chairman, in a statement announcing the decision. 'I expect CN will work hard to integrate the companies smoothly so that shippers in the region receive quality service.”
   Nober made the decision by himself, since he is the only person on the three-member board, pending Senate confirmation of two new board members nominated by President Bush.
   The STB imposed several conditions on the transaction, requiring:
   * STB oversight of the transaction for one year.
   * CN to keep all existing active gateways open.
   * CN to waive its defenses regarding rate regulations on bottleneck line segments created by the transaction.
   * CN to adhere to the terms of the settlement reached with the Burlington Northern and Santa Fe Railway Co. regarding potential construction build-outs.
   * CN to address certain concerns raised by some shippers about the change in the competitive balance where CN and Duluth, Missabe and Iron Range Railway operate parallel lines.
   The STB has no jurisdiction over CN’s acquisition of Great Lakes Fleet Inc. The U.S. Maritime Administration and the Coast Guard must approve that part of the deal.