CN Urges STB To Approve $300M Takeover Of Suburban Chicago EJ&E Rail

August 17, 2008 1:37 p.m. EST

Chicago, IL (AHN) - Canadian National Railway Co. has urged the Surface Transportation Board to decide soon on CN's planned $300 million takeover of a major portion of a suburban Chicago rail line from Elgin, Joliet & Eastern Railway Co.

CN asked the three-member STB to issue a final decision on the transportation merits of the deal before the transaction expires by year-end.

The Canadian rail operator wants the STB to decide by Sept. 15 whether CN will modify its technical bid in time for an Oct. 15 deadline. By that time, CN hopes that the acquisition has been completed.

CN is running out of time as EJ&E owner U.S. Steel advised CN that it will not extend the stock purchase agreement after Dec. 31. CN disclosed its intent to purchase the railway September last year.

If STB agrees to CN's request, CN will defer boosting freight in the rail until an environmental impact report is obtained. If STB disagrees, CN will bring the matter to a U.S. Court of Appeals for the District of Columbia.

CN plans to raise freight traffic to 20 more freight trains on the EJ&E line, which connects Chicago, Waukegan and Gary, Indiana. The boost is seen to cushion rail traffic congestion in Chicago, a major land transport hub.

Communities on the EJ&E line have expressed opposition to the increased rail traffic as it would impact on the quality of life of residents. In Frankfort, residents plan to hold rallies in protest of CN's purchase of the EJ&E tracks.