CN Rail agrees to improve infrastructure as part of rail line deal

Deal could be first step toward closing on EJ&E

By Dave Hannon -- Purchasing, 8/25/2008 1:18:00 PM

After nearly a year, Canadian National (CN Rail) has cleared a major hurdle in its proposed $300 million buy of Chicagoland’s Elgin, Joliet & Eastern (EJ&E) Railroad from U.S. Steel.

According to a statement released today, CN Rail has reached an agreement with local officials in Joliet to make upgrades in the tracks and roadways in the area after officials held up the deal over fears increased traffic would create more noise in quiet zones.

CN Rail wants to buy the line from U.S. Steel so it can route longer rail shipments around Chicago and avoid bottlenecks. The deal was originally proposed in September 2007 and is still under review by the Surface Transportation Board, which has encouraged CN Rail work out the concerns with local communities before it rules on the deal.

“We believe this will be the first of many agreements between CN and the communities along the EJ&E line that are impacted by this transaction,” said Gordon Trafton, CN Rail’s senior vice president for the southern region.

The deal comes only days after a recent report from Chicago’s Metropolitan Planning Council estimates that Chicago and its surrounding counties will lose $7.3 billion this year in wasted fuel, time, productivity and environmental damage caused by traffic congestion.