Thursday, Canadian National Railway Co. (CNI, CNR.TO) said it has petitioned the U.S. Court of Appeals for the District of Columbia Circuit for an accelerated ruling ordering the Surface Transportation Board, or STB, to render a final decision on the transportation merits of the company's proposed buyout of the principal lines of the Elgin, Joliet & Eastern Railway Co., or EJ&E, to allow the transaction to close by the parties' December 31 deadline.
Hunter Harrison, the president and chief executive officer of Canadian National stated, "Given the substantial, wide-ranging public interest benefits of our planned acquisition of the EJ&E, we cannot permit regulatory delay to imperil this transaction."
The company has pointed out that the transaction will be good for the Chicago region as a whole. Firstly, the transaction would ease rail congestion, which if unaddressed could threaten $2 billion of production and 17,000 jobs in the Chicago region over the next 20 years. Secondly, the company stated that about 60 communities inside the EJ&E arc would benefit from reduced train traffic, with less pollution, fewer idling trains and fewer blocked crossings.
In view of the December 31 deadline, Canadian National had petitioned for the buyout of EJ&E last month to the STB, which was denied. The company stated that it had no option but to compel the court to address the issue in order to complete the transaction by the year-end.
The company said it did not believe that concerns from a small but vocal minority of residents should take precedence over the broad public interest and the needs of a far greater number of communities that would benefit from the transaction, and added that it would address any potential adverse effects.
Canadian National has committed $400 million of private-sector investment to head start the Chicago Region Environmental Transportation Efficiency, or CREATE Program, for which the government has not provided comprehensive funding. The company stated that without moving trains onto the EJ&E line, Chicago will continue to have high levels of rail operations congestion. The company has also committed about $40 million for mitigation of possible adverse effects from the transaction.
Subject to regulatory approval from the STB, Canadian National and U. S. Steel, the indirect owner of the EJ&E, had agreed on September 26, 2007, for Canadian National to acquire most of the EJ&E for $300 million.
CNI is trading up $1.27 or 2.52% at $51.60. CNR.TO is trading up C$0.77 at C$54.45.
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