CN SELLS INTEREST IN DETROIT RIVER TUNNEL
Canadian National said Tuesday it has reached an agreement to sell its one-half interest in shares and assets of the Detroit River Tunnel Co. to Borealis Transportation Infrastructure Trust. Terms were not released.
The 1.6-mile, rail-only tunnel crosses the Canada/United States border between Detroit and Windsor, Ontario. The deal is subject to approval by the U.S. Surface Transportation Board.
Canadian Pacific Railway will continue to hold a 50-percent interest in the tunnel and will replace CN as the operator of the DRT. CN and CP, along with CSX Transportation and Norfolk Southern Railway, will continue to hold trackage rights permitting them to operate trains through the tunnel.
“During the course of approval of the merger of CN and Illinois Central Railroad, CN committed to the Surface Transportation Board that it would not block any proposed improvements to the tunnel and that it would sell its interest in the Detroit River Tunnel at a fair market value,” said Paul M. Tellier, CN's president and chief executive officer.
CN moved 4,000 carloads through the tunnel in 1999, less than 1 percent of the volume CN moved between Canada and the United States through the St. Clair Tunnel, which CN opened in 1995 between Sarnia, Ontario, and Port Huron, Mich. the new tunnel can handle high-cube automobile-carrying railcars and intermodal cars, CN said.
Borealis Transportation Infrastructure Trust is controlled by the Ontario Municipal Employee Retirement System, with assets of Can $36 billion.