- The Washington Times - Wednesday, December 24, 2008

CHICAGO (AP) — Federal regulators on Wednesday conditionally approved the hotly debated sale of a 200-mile railway line that arcs around Chicago and runs through dozens of Illinois and Indiana communities that fiercely opposed the transaction.

The bid by Montreal-based Canadian National to buy the line for $300 million has been closely watched, with many in the industry wondering if the U.S. Surface Transportation Board would OK the deal despite heavy political pressure not to.

Chicago is a vital but increasingly clogged hub of the U.S. rail network, and CN has argued its purchase and development of the Elgin, Joliet & Eastern Railway line would dramatically improve the flow of freight trains in and around the city.

CN welcomed Wednesday’s decision.

“We’re very pleased the decision’s out,” CN executive Karen Phillips said. “It’s an important step forward.”

In an 86-page report accompanying the ruling, the STB said it agreed the sale will help reduce congestion. But it also hastened to cite concerns of residents along the EJ&E track, many of whom fear that an expected tripling of CN traffic — from just a couple trains a day to 15 or more — will pose safety risks and severely disrupt their lives.

And as a part of its ruling, the transportation board said it would require CN to take nearly 180 measures to ease disruptions in the nearly 30 cities, towns and villages along the line, including by installing sound proofing in places along the track.

Other communities in or near Chicago would see a reduction in trains rumbling through their neighborhoods, and they have backed CN’s plans.

But politically powerful critics issued statements blasting the deal’s approval.

“They rushed a decision — giving final approval on Christmas Eve — for a project that has untold negative consequences on communities in our region and on quality of life for affected residents,” said U.S. Sen. Dick Durbin, an Illinois Democrat.

U.S. Rep. Don Manzullo, a Republican who represents some of the affected communities, called the transportation board’s decision “a joke.”

“The STB gave CN everything it wanted,” he said.

Phillips said that wasn’t true, expressing disappointment with some STB conditions, including that CN pay more for overpasses or underpasses at two crossings. CN would decide later whether to appeal aspects of the ruling, she said.

The decision opens the way for CN to close the deal to buy the EJ&E from its current owner, U.S. Steel Corp., in a month.

CN has worked hard to reduce opposition to its purchase of the EJ&E line, which swings around Chicago from Waukegan to Gary, Ind.

In the weeks before Wednesday’s ruling, CN reached agreements with around 10 affected municipalities to help reduce disruptions caused by the increased traffic on the EJ&E; seven were in Illinois and three in Indiana.

And earlier this month, Amtrak dropped its opposition after CN assured the passenger rail service that it would not abandon or stop maintaining other Chicago-area tracks if the EJ&E sale went through.

CN also argued that the sale will benefit the entire region economically. A study released this month by the Chicago Metropolis 2020, a pro-business organization, supported that contention. It said the EJ&E sale would spur more than $260 million in economic growth nationally, and create around 650 jobs.

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