Mixed ruling for CN Rail on Chicago purchase
By Allan Dowd
VANCOUVER, British Columbia (Reuters) - U.S. regulators on Friday rejected a call by Canadian National Railway (CNR.TO: Quote) for a ruling by the end of the year on its purchase of the Elgin, Joliet & Eastern Railroad, but agreed to limit on how long the review will continue.
The Surface Transportation Board ruled the environmental impact review of CN's planned purchase of the Chicago-area rail line will be completed between early December and the end of January, and it will issue a final decision "as soon as possible" after that.
The unanimous ruling rejected calls by opponents for an extended review comment process, but one board member included a warning in the decision about the deal's impact on some communities along the EJ&E's tracks.
The STB issued its decision on scheduling along with a lengthy draft environmental impact statement.
Canadian National had warned it needed a decision on the deal by the end of the year or the EJ&E's current owner, United States Steel Corp. (X.N: Quote), would cancel the $300 million agreement. The deal had been expected to close in mid-2008 when it was announced last September.
Canadian National said it was studying the board's decision, but was pleased it had agreed to limit the comment period during the review to 60 days.
The terms of the draft environmental impact statement "conform to our view that the environmental issues raised in this proceeding are not unusual and can be reasonably mitigated," the railway said.
Montreal-headquartered Canadian National wants to use the 198-mile EJ&E to reroute freight trains around Chicago, where they now face lengthy delays in the congested U.S. rail hub. Continued...