Canadian National threatens legal action if feds don't get rolling

BY KEITH BENMAN, Times of Northwest Indiana

kbenman@nwitimes.com

Canadian National Railway is threatening to take legal action to speed up federal regulators' decision on its controversial plan to buy the EJ&E Railway.

One day after the Montreal-based railroad was pilloried at a congressional hearing in Chicago, the railroad fired back threatening to seek unspecified "legal relief" to close its proposed purchase by the end of the year.

"This transaction would not simply benefit CN and its customers -- this transaction is in the broader regional and national interest," said E. Hunter Harrison, Canadian National chief executive officer.

The federal Surface Transportation Board last month rejected Canadian National's request for an expedited review process. On the same day, it opened a 60-day comment period on the draft environmental impact statement for the proposed transaction.

Opponents of Canadian National's plans derided the 60-day comment period as inadequate. They were no happier with Canadian National's threat to seek legal relief on Wednesday.

"We think it's just saber rattling," said Chuck Brimmer, chief of staff for U.S. Rep. Pete Visclosky, D-Ind. "If anything, the Surface Transportation Board has not been prudent enough in this process in consulting the public interest."

Last week, Visclosky and other congressional representatives introduced legislation that would force the Surface Transportation Board to take better account of the public interest in rendering its decisions.

In September, Canadian National announced it had an agreement with U.S. Steel to buy the major portion of the EJ&E. The 198-mile freight connector runs from Waukegan, Ill., to Gary, Ind.

Under its proposed plan, Canadian National would reroute trains that currently roll into Chicago onto the EJ&E tracks. Communities such as Griffith, Schererville, and Dyer would see a three-fold increase in train traffic under the plan.

On Wednesday, Harrison said U.S. Steel has told the railroad it will not extend a Dec. 31 deadline for closing the deal. The Surface Transportation Board has already indicated the environmental review of the project will stretch into next year.

Harrison pointed out getting the deal done is in the wider public interest, as it would mean far fewer trains rolling into Chicago and even reduce the number of trains through some suburban communities.

He pledged the railroad will continue to work with individual communities to come up with mitigation measures.