Tuesday, February 24, 2009

CN appeals STB mandate on EJ&E overpass costs

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Canadian National has filed an appeal in U.S. federal court challenging a mandate issued by the Surface Transportation Board that it pay the majority of costs for two rail crossing upgrades on the Elgin, Joliet & Eastern Railway Co., which it acquired in January for $300 million.

Among the conditions posed by STB were a requirement for CN to cover 67% of rehabilitating the Ogden Avenue overpass in Aurora, Ill., and 78% of the Lynwood overpass, near the Indiana/Illinois border.

CN says it should only cover 5% to 10% of the overall cost, based on past precedent. "The STB has never mandated such a substantial rail contribution to grade separations as conditions of any past rail mergers," said CN Vice President Karen Phillips, who noted the mandated cost coverage of roughly $100 million for the two overpasses would increase CN’s budget for mitigation along the EJ&E significantly. CN has pledged more than $60 million in mitigation costs, along with $100 million for infrastructure improvements.

Aurora Mayor Tom Weisner, who also heads opposition group The Regional Answer to Canadian National (TRAC), criticized the railroad's court appeal Monday, claiming CN is responding because TRAC and other EJ&E merger opponents have fought against the deal.