BY INYOUNG HWANG, Medill News Service, The Times of Northwest Indiana
The chief executive officer of Canadian National Railway affirmed this week his confidence in obtaining regulatory approval for the company's proposed $300-million purchase of Elgin, Joliet & Eastern Railway.
While reporting a third-quarter profit of 14 percent, CN Chief Executive Officer E. Hunter Harrison said during a conference call he thought the transaction will be completed by year's end and that company officials met with Chicago Mayor Richard Daley last week.
"I do think when the elections are passed, there could be a little shift in certain areas," Harrison said. "If you've been following closely and looked at the various editorials and papers and interacted with some of the townships, the momentum has swung a little bit back in our favor from where it was at one point in time."
The Montreal-based company, operator of the most extensive rail network in Canada and one of the largest in the United States, has been trying to expand operations in Illinois and Indiana. In 2007, it offered to buy the EJ&E, which spans from Waukegan, Ill., to Gary, Ind., in a 198-mile arc around Chicago. The purchase would help CN expedite movement of trains and cars through the Chicago area.
CN expected to close the deal in mid-2008 but still needs approval from the U.S. Surface Transportation Board. The transaction has faced resistance in suburbs such as Barrington, Ill., and Griffith, Ind., that are located along the EJ&E. Residents are concerned about greater traffic creating noise and blocking grade crossings.
In September, CN filed an appeal with the U.S. Court of Appeals in Washington to speed up the Surface Transportation Board's decision on the sale.
"I think it's fair to say that [STB has] to approve the transaction based on the merits and the competitiveness," Harrison said. "Nobody's raised an issue about the competitiveness. The only issue has become the litigation of the environmental issues."
Stan Dobosz, a town councilman of Griffith, however, said that if the decision is made before Dec. 31, the much-needed environmental study may not be thorough enough.
"Griffith would be the community most impacted in Indiana," Dobosz said. "Virtually, it would cut our town in half, and we would have chaos. If we were to have an emergency, our fire department and ambulances wouldn't be able to cover the town from one end to the other."