Union Pacific says CN interfering with its track rights
(The following appeared on the Daily Herald website on December 16.)
CHICAGO Union Pacific Corp. told U.S. regulators that Canadian National Railway Co. is interfering with its track rights on a Chicago-area railroad that the Canadian company wants approval to buy by the end of 2008.
Canadian National "has unlawfully exercised premature control of Elgin, Joliet & Eastern Railway Co. by interfering with the efforts to implement" a 2003 agreement to use the line, lawyers for Omaha, Nebraska-based Union Pacific wrote in a letter filed with the U.S. Surface Transportation Board.
The Union Pacific letter is a possible hitch in Canadian National's efforts to complete the EJ&E acquisition this year. Canadian National agreed to the $300 million purchase in September 2007 and has said that the seller, U.S. Steel Corp., might halt the transaction if it's not done by the end of 2008.
Union Pacific, the largest U.S. railroad, said in its letter that Canadian National, Canada's biggest, successfully "insisted that EJ&E cease efforts to carry out its agreement" with the U.S. company. Union Pacific wants the board to hold up any approval of Canadian National's acquisition until its rights to use the line are resolved.
Karen Phillips, vice president of U.S. public affairs for Montreal-based Canadian National, didn't immediately return a call seeking comment.
The U.S. regulator is evaluating the effect of the planned purchase, and issued a final environmental impact statement last week. Canadian National said on Dec. 12 that publication of that report in that day's Federal Register should clear the way for the board to "promptly issue" a decision on the transaction.
Some Chicago suburbs have said that they would be harmed by increased rail traffic as a result of the purchase and have sought to block the deal.
CHICAGO -- There's a new wrinkle in the saga of Canadian National Railway Company's plan to buy the Elgin, Joliet and Eastern rail line -- one opponents of the deal hope might derail it all together, the Fox Valley Villages Sun reports.
Union Pacific, the country's largest railroad, has accused CN of interfering with its track rights along the EJ&E, which runs through the western suburbs in a semicircle around Chicago.
In a petition filed with the federal Surface Transportation Board last week, Union Pacific charged CN with "unlawfully exercis(ing) premature control" of the EJ&E line, and has asked the STB to intervene.
At issue is a 2003 agreement between Union Pacific and the EJ&E, which gave UP trackage rights along portions of the EJ&E. Union Pacific is accusing Canadian National of exerting control over the EJ&E, preventing UP's use of that line.
"The evidence permits no reasonable conclusion other than EJ&E was acting under outside control from CN," Union Pacific writes.
This charge could have an impact on the planned $300 million sale of the EJ&E to Canadian National. For the past year, the Surface Transportation Board has been studying the potential impact of the transaction, and the final decision is now in the board's hands. Canadian National has been pushing for a decision before the end of the year because the purchase agreement with U.S. Steel, owner of the EJ&E, expires on Dec. 31.
Union Pacific has asked the STB to hold off on any decision until its rights to use the EJ&E line have been resolved.
Officials from Canadian National did not respond to Union Pacific's charges Monday.
(The preceding article by Andre Salles was published December 18, 2008, by the Fox Valley Villages Sun.)
