By Erik Potter, Post-Tribune staff writer
It appears Canadian National Railway will have to go the long way through the regulatory maze in its bid to purchase the Elgin, Joliet & Eastern Railway Co.
On Monday, the federal Surface Transportation Board denied the Canadian freight company's request that the board make its decision on the proposed purchase by Oct. 15, even though the final environmental impact statement won't be finished until December or January.
CN proposed that, if the transaction were approved on Oct. 15, it would keep the amount of traffic on the EJ&E line the same as it is now until the environmental report was completed. At that point, based on the environmental findings, the transportation board could decide how much extra traffic it would allow CN to put on the EJ&E lines.
The transportation board, the agency responsible for regulating railroad transactions, ruled that the proposed two-step approval "violates the National Environmental Protection Act principles and regulations." The ruling further stated that CN failed to show that the two-step approval would be workable and that it would not impact the environment.
CN spokesman Jim Kvedaras said the company is considering appealing the ruling in court, but needed to first review and digest the opinion, which was handed down about 5:30 p.m. Eastern time.
CN has been pushing for early approval because the purchase agreement it negotiated with U.S. Steel, which owns the EJ&E, expires at the end of the year. If the environmental impact report takes as long as the transportation board says it might, that purchase agreement will expire, locking CN out of a $400 million upgrade to its Chicago rail network.
Kvedaras said the company was not prepared to discuss what it would do in that situation, whether it would seek to renegotiate a purchase agreement with U.S. Steel, seek expanded rights to use EJ&E tracks, or other options.
Rep. Pete Visclosky, an opponent of the sale, said the transportation board made the right decision.
"I applaud the STB for ruling on behalf of the American people and dismissing CN's absurd petition for special treatment," Visclosky said in a written statement. "... We know full well that this transaction brings nothing but problems, and (we) will continue to fight against it."
If CN were to acquire the EJ&E, it would divert most of its traffic that it currently sends through Chicago onto the EJ&E line that goes around the city. The result would be a tripling of traffic on the EJ&E line that goes through Gary, Griffith, Schererville and Dyer.
In a separate action, Visclosky, along with Gov. Daniels and Sens. Richard Lugar and Evan Bayh, sent a letter to the transportation board asking for an extension of the public comment period on the agency's draft environmental impact report. The report, a 5,000-page summary of the community and environmental impacts of the proposed purchase, was released July 25. The deadline to make public comments for inclusion in the final version is Sept. 30.
The Indiana lawmakers also asked for an additional public hearings on the draft report to be held in Lake County.
Currently, of the eight public meetings scheduled, only one -- Wednesday night's meeting at the IUN auditorium in Gary -- will be in Indiana.