www.chicagotribune.com/news/opinion/chi-1215edit1dec15,0,5046212.story
December 15, 2008
Canadian National's proposed purchase of the EJ&E rail line would boost the Chicago-area economy by $60 million a year, create hundreds of new jobs and ease freight gridlock. That's the conclusion of an independent economic study commissioned by Chicago Metropolis 2020. The study reinforces our belief that CN's purchase of the EJ&E would be a net boon to the region and should go forward. Now, freight traffic headed from one part of the country to another must navigate through Chicago's 2,800 miles of crisscrossing railroad tracks. This creates bottlenecks that cost time and money. CN's deal with the EJ&E would create a seamless freight connection around Chicago. CN would shift freight traffic away from its five rail lines that converge spoke-like in Chicago and to the EJ&E line, which arcs for 198 miles through Chicago's outer suburbs—from Waukegan to Joliet to Gary. CN has offered to pay $300 million to U.S. Steel for the EJ&E, $100 million to upgrade the line and another $40 million to help local communities deal with the traffic impact along the route.This deal has caused controversy from the moment it was announced 15 months ago. The larger region would see a substantial economic benefit, but some towns would deal with more trains. How it breaks down: 80 communities would have fewer trains, 34 would have more. Some of those 34 towns have mobilized opposition to the deal. Sen. Dick Durbin opposes it. So does President-elect Barack Obama. But Congress has no say in this deal. The federal Surface Transportation Board determines whether CN can buy the EJ&E. It could rule any day. In advance of that ruling, the board released an eagerly anticipated environmental impact study this month. It disappointed opponents of this deal.The environmental report said CN should pay 15 percent of the costs to build two overpasses or underpasses in Aurora and Lynwood and help 13 emergency service responders along the EJ&E line to cope with the impact of more train traffic in their towns.It noted that some communities along the EJ&E line will face "adverse effects" from more trains and encouraged CN to negotiate agreements with them to reduce the impact. CN has been doing that. It has announced agreements with Joliet, Crest Hill, Mundelein and Chicago Heights in Illinois and Dyer and Schererville in Indiana. It is negotiating other deals. CN also has reached a deal to maintain a portion of track used by Amtrak. The environmental study pointed out that CN could have avoided any federal review by simply negotiating a freight contract with EJ&E, rather than buying the line outright. In that case, more trains would already be running on the EJ&E, and towns along the line would be getting nothing to help them cope. Because CN wants to buy and upgrade the line, communities will get some assistance from the railroad. That's only fair. CN should pay a portion of the cost and the transportation board was right to make that a condition of approval.Now the board should give CN the green light to close this deal. It will ease the notorious bottleneck that slows freight to a near standstill here and boost the economy. It will be good for the Chicago region.
This is a pretty strong endorsement which appeared as the lead editorial Monday. I hadn't seen it here yet, so here it it.
Comments?
To me the following are the most telling words of that article:
"...The environmental study pointed out that CN could have avoided any federal review by simply negotiating a freight contract with EJ&E, rather than buying the line outright. In that case, more trains would already be running on the EJ&E, and towns along the line would be getting nothing to help them cope. Because CN wants to buy and upgrade the line, communities will get some assistance from the railroad..."
This gives CN the chance to be as good a neighbor as possible which it sounds like they're doing. I hope the deal goes through swiftly.
Dan
I hope the deal doesn't go through because CN is already trying to throw UP off the EJ&E, which would effectively severely impact UP's ability to move coal to power plants in Indiana. Here's a link to UP's accusation against CN. http://www.marketwatch.com/news/story/Canadian-National-Accused-Unlawful-Behavior/story.aspx?guid=%7BD164AC2B-1E56-49E0-B7C3-F275E23B1897%7D
When CN first announce the purchase, they said they would honor all existing trackage rights agreements. What do you know, they are already trying to cut off other users and they don't even own the line yet.
If CN is able to kick UP and BNSF trains off the EJ&E, the so called benefits from the merger could be lost. The CN lines inside the EJ&E loop would decrease in traffic, but the BNSF and UP lines inside the EJ&E loop would increase in traffic
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