CN Reaches Seventh Illinois Voluntary Mitigation Agreement for EJ&E Transaction

CHICAGO — CN announced a voluntary mitigation agreement with the Village of Mokena, Ill., located southwest of Chicago, that addresses the community’s concerns about CN’s proposed acquisition of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E).

Under the agreement, CN would provide funding for quiet zones, noise mitigation, and emergency response personnel training and emergency communication capabilities.

The agreement is contingent upon regulatory approval of CN’s proposed acquisition of the EJ&E. The transaction is being reviewed by the Surface Transportation Board (STB), which is encouraging voluntary mitigation agreements between CN and communities.

“Our voluntary mitigation agreement with Mokena is our seventh in Illinois, bringing the total number of agreements we’ve signed in both Illinois and Indiana to ten,” said Gordon Trafton, CN senior vice-president, Southern Region. “This underscores the considerable progress we’re making in our continuing outreach efforts to find mutually-acceptable mitigation programs addressing community concerns about greater freight train volumes that would follow our acquisition of the EJ&E.”

In addition to Mokena, CN has signed mitigation agreements with the Illinois communities of Frankfort, Hoffman Estates, Mundelein, Crest Hill, Chicago Heights and Joliet. CN has similar pacts with Griffith, Dyer and Schererville, Ind.

CN estimates its mitigation program for the EJ&E transaction will cost the company more than $60 million. Together with the $20 million CN expects to pay for the consultant working on the regulator’s environmental review of the transaction, this $80 million is a significant expenditure on environmental issues for a transaction that involves a private sector investment of $300 million for the purchase and $100 million in proposed improvements to the line.

CN has also reached an agreement with Amtrak on its continued access to and from Chicago’s Union Station for downstate Illinois service and is committed to a four-party preliminary memorandum of understanding on a rail line relocation required for the expansion of Gary/Chicago International Airport. CN will also continue to work with Metra to explore all options for service on the proposed STAR Line, including use of the EJ&E line.

“We hope the STB takes note of the growing number of communities signing mitigation agreements with CN and will rule soon on the transaction so that its wide-ranging economic and transportation benefits can be realized,” Trafton said.
CN and U. S. Steel, the indirect owner of the EJ&E, announced on Sept. 26, 2007, an agreement under which CN would acquire most of the EJ&E for $300 million, subject to regulatory approval by the STB.

— PRNewswire-FirstCall