Experts: Don't hold your breath for merger ruling

The heat is on federal regulators to rule on the Canadian National Railway's plan to buy the smaller EJ&E railroad by Dec. 31 but it's unlikely the agency will bow to pressure, experts say.

CN Tuesday appealed to the Surface Transportation Board to make up its mind quickly on the proposed merger with the EJ&E, which runs in a semicircle between Waukegan and Gary, Ind. CN says moving freight trains from its tracks in Chicago and nearby suburbs onto the EJ&E will ease regional congestion.

The railroad learned Monday that the U.S. appeals court denied its request to step in and order the STB to quickly rule on the case.

Opponents of the railroad merger, who fear it will cause traffic delays, noise and safety problemAs for towns along the EJ&E, applauded the court's action. Appellate justices said CN's plight didn't merit any intervention.

CN argued pushing the decision into 2009 will imperil a deal with the EJ&E's owners, U.S. Steel, and the Canadian company. The U.S. Department of Transportation recently echoed those concerns in a letter to the STB.

But Joseph DiJohn, executive director of the Metropolitan Transportation Support Initiative at the University of Illinois at Chicago, thinks the rhetoric will have minimal impact.

"I think the board is outside of politics and legal pressure," DiJohn said.

And if Dec. 31 passes with no ruling, DiJohn predicted the deal between the two companies can still be honored. "If U.S. Steel was willing to make a sale by Dec. 31, then I can't imagine why they wouldn't be willing to on Jan. 1," he said.

DePaul University transportation expert Joseph Schwieterman agreed that "at the end of the day, U.S. Steel will be open to a revised timetable."

The board will discuss the merger with STB staff Tuesday. With the holidays quickly approaching, Schwieterman noted the agency "tends to make decisions quickly, but that window is closing fast. It's becoming unclear whether we'll hear a decision before the year's end."