CN seeks split decision on EJ&E rail plan

The Canadian National Railway wants a split decision by federal regulators on its controversial plan to buy the smaller Elgin Joliet & Eastern Railway.

CN on Friday announced it is asking the Surface Transportation Board to rule on the transportation merits of the acquisition by Oct. 15 and decide the environmental impacts later - a move merger foes called presumptuous.

The bifurcation is essential, CN leaders said, because their tentative purchase agreement with U.S. Steel, which owns the EJ&E, will expire at the end of the year and the steel company is not willing to renew. CN is promising not to add any of its freight trains to the EJ&E until there's a final decision.

"We believe this offers a framework that would be win-win," CN spokesman Jim Kvedaras said, "that allows us to close the business side of the deal and meets the needs of the public."

But opponents of the deal argued speeding up the process was disrespectful toward communities that would lose by the change.

"I think it's quite unusual and unprecedented," said U.S. Rep. Judy Biggert, a Hinsdale Republican. "I think it is the height of arrogance to think you can pressure federal regulators to approve the deal before they've done their jobs."

Kvedaras said the transaction, which is classified as a minor one, usually only takes six months to determine. CN filed it's initial request with the STB in October 2007.

The railway is also threatening to go to court if it doesn't get an answer from the STB by Sept. 15.

CN wants to move freight trains from its tracks in Chicago and nearby suburbs onto the EJ&E, which arcs through the area from Waukegan to Gary, Ind. It will ease freight congestion on overused tracks resulting in goods being transported more quickly around the region, CN said.

But towns such as Barrington and West Chicago that would experience a deluge of freights are fighting back, concerned about safety, noise, and traffic delays for commuters and emergency vehicles.

In July, the agency issued a draft environmental statement on the merger and promised a final version between December and January and a decision as soon as possible.

The STB concluded environmental problems posed by the merger could be lessened with easy solutions like train curfews at rush hour and expensive ones such as grade separations - but didn't give details on how to pay for the latter. Officials acknowledged accidents would drop along CN lines but increase along the EJ&E, with a net decrease overall.

Transportation expert Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University, predicted the agency might acquiesce to CN's request.

"I think there's a presumption that the railroad will be given a chance to make the merger work," Schwieterman said. "It may come at a higher price for the shareholders."

It's unclear what happens if the environmental impact report comes down hard on CN and demands costly mitigation.

"We are taking some risk on," Kvedaras said.

STB officials had no comment on CN's request Friday.