Canadian National Railway chief wants plan on fast track

BY KEITH BENMAN, Times of Northwest Indiana
kbenman@nwitimes.com

The CEO of Canadian National Railway told Wall Street analysts this week he is hopeful the railroad's proposed purchase of the EJ&E can be closed in as little as one year.

Chief Executive Officer E. Hunter Harrison said the Surface Transportation Board made an "error" in claiming it could take the railroad up to three years to obtain environmental clearances.

"I think that's a little ridiculous in my view," Harrison said in response to an analyst's question during a conference call to discuss CN's fourth quarter earnings this week.

The proposed purchase would shift traffic from CN's main line tracks into Chicago onto the EJ&E tracks, which run through Northwest Indiana and Chicago's western suburbs.

CN's own filings with the Surface Transportation Board show train traffic would more than triple in communities like Schererville, Dyer and Lynwood.

In the past two weeks, residents and public officials from those communities protested the plans at meetings conducted by the Surface Transportation Board, including one at Gary's Genesis Center last Wednesday.

The federal agency is preparing an environmental impact statement for the purchase, which could force CN to change some aspects of the plan. Agency officials have said the process could take 18 months or longer.

In late September, CN announced it had an agreement to buy the bulk of the EJ&E for $300 million, leaving a small portion of the railroad in the hands of current owner U.S. Steel Corp. In December, the Surface Transportation Board ruled the purchase could only be approved after an environmental impact statement was prepared.

Harrison, formerly CEO of the Illinois Central before its acquisition by CN, also said the railroad would consider spending more than the $100 million it has pledged for improvements on the EJ&E.

The environmental issues boil down to the at-grade crossings in Chicago's west suburbs that would see increased traffic under the proposal, Harrison said.

Overall, CN's plans would decrease rail traffic in the Chicago region because it would reduce the number of trains on some CN main lines into Chicago to just a few per day. It would also allow for the abandonment of the St. Charles Air Line in Chicago.

The CEO said the overall environmental impact would be positive.

"It's up to others to decide ... if trains should move away from McCormick Place, away from Comiskey (U.S. Cellular Field), away from Soldier Field, and away from the interstate (Dan Ryan)," Harrison said.