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American Shipper

STB approves CN’s EJ&E purchase

STB approves CNÆs EJ&E purchase

The Canadian National Railway got some new track this Christmas.

   The day before Christmas the U.S. Surface Transportation Board unanimously approved the plan by CN and its Grand Trunk Corp. affiliate to purchase the Elgin, Joliet & Eastern Railway Company (EJ&E), subject to a number of Board-imposed conditions. CN first announced plans to buy the Chicago-area short line from U.S. Steel for $300 million in September 2007.

   The 198-mile EJ&E rings Chicago, and CN said ownership would provide an opportunity for trains to avoid congestion in the city and reduce transit times for some trains by a day.

   'Approval of this important railroad merger, with the conditions we have imposed, marks a significant step forward in our nation’s efforts to alleviate rail and highway congestion,' said STB Chairman Charles D. Nottingham in a statement.

   Nottingham said the purchase 'will provide to the many Chicago neighborhoods that have been disproportionately burdened for many decades with severe rail traffic-related roadway congestion.'

   The STB said the transaction will not result in a substantial lessening of competition, the creation of a monopoly, or a restraint of trade, and that 'any minor anticompetitive effects that may result will be outweighed by the overall transportation benefits.'

   But the proposed acquisition and likelihood of heavy traffic in some suburbs along the railroad has sparked strong opposition in some suburban communities.

   Several communities formed a group called The Regional Answer to Canadian National, or TRAC, to oppose the deal, saying it could increase traffic four-fold.

   The Elgin Courier News quoted Tom Weisner, the mayor of Aurora, Ill. as saying 'we're certainly not walking away. We certainly intend to stay in this ballgame,' and that the group had been in contact with congressional representatives to explore alternatives.

   Catherine Melchert, the president of Bartlett, Ill. was quoted by the paper as saying approval of the deal was an example of 'the big guy trumps the little guy,' and said her city's request for an overpass for at-grade crossings were not part of the deal approved by the STB.

   Nottingham said as a result of the purchase there will be environmental benefits to those living in and near Chicago, but 'adverse environmental impacts on communities along the EJ&E rail line.'

   The STB will impose what it said is 'substantial environmental mitigation to minimize potential adverse environmental impacts of the transaction,' including:

   *Two highway-rail grade separation projects with CN paying 67 percent of the cost of one and 78.5 percent of the cost of the other.

   * Cameras to monitor highway-rail crossings for use by emergency providers.

   * School and pedestrian safety measures.

   * Noise reduction measures.

   * Requirement that CN file quarterly reports on the implementation of the environmental mitigation over the next five years.

   CN has also negotiated mitigation agreements with 10 communities in Illinois and Indiana privately, most recently earlier this week with the Village of Mokena, Ill.

   CN has also reached an agreement with Amtrak on its continued access to and from Chicago's Union Station for downstate Illinois service, is discussing rail line relocation required for the expansion of

Gary/Chicago International Airport, and said it would work with Metra to explore options for service on the proposed STAR Line, including use of the EJ&E line. ' Chris Dupin

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