Canadian National Railway challenges federal regulators over train overpasses in Chicago area
(The following article by Richard Wronski was posted on the Chicago Tribune website on February 24.)
CHICAGO -- The Canadian National Railway challenged the authority of federal regulators to make the railroad pay an estimated $70 million for two overpasses, in Aurora and in Lynwood.
The overpasses would help offset traffic delays as the railroad moves more freight trains through the suburbs.
CN asked a federal appeals court in Washington on Monday to review the decision by the U.S. Surface Transportation Board, which the railroad called arbitrary and capricious.
Opponents of CN have filed their own court challenge of the December decision that allowed CN to buy the Elgin, Joliet & Eastern Railway. Opponents contend the decision was based on a flawed environmental impact analysis.
CN plans to start its trains on the EJ&E next week.
The transportation board wants the Montreal-based railroad to pay 67 percent of the cost of building an overpass on Ogden Avenue in Aurora and 78.5 percent of the cost of an overpass on Lincoln Highway in Lynwood. Railroads have paid 5 to 10 percent of such costs, CN said.
CN said adding the cost of the two overpasses means it would have to spend at least $151 million. That is more than half the $300 million it is paying for the EJ&E, the railroad said in a statement.
U.S. Senator Dick Durbin says Canadian National Railway should have to meet a key condition placed on it before its hotly debated acquisition of a nearly 200-mile railway line encircling Chicago.
CN this week asked a federal court to overturn a requirement from the Surface Transportation Board that CN pay around 70 percent of the costs of building overpasses or underpasses at two crossings.
Montreal-based CN says railroads have historically paid only up to 10 percent.
But Durbin's office says the Illinois Democrat is urging regulators to defend their decision. Many residents along the Elgin, Joliet & Eastern Railway line fear increased CN rail traffic will disrupt their lives.
Despite their opposition, the $300 million sale closed Jan. 31.
(The preceding Associated Press article appeared on the Web site www.forbes.com on February 25, 2009.)
