Canadian National Railway Co. warned Monday that it’s willing to abandon plans to acquire a Chicago-area rail carrier if too many strings are attached to the purchase. CN announced in September that it had struck a tentative deal to buy the strategic Elgin Joliet & Eastern Railway Co. for $300-million (U.S.), hoping to bypass train gridlock in Chicago’s core by rerouting traffic through EJ&E’s suburban tracks. But Hunter Harrison, CN’s chief executive officer, said the railway isn’t wearing blinders when it comes to the deal, which would clear the way to speed up shipments across its network, including from the Port of Prince Rupert in British Columbia to the Memphis hub.
No real harm at all, as CN can simply exercise its trackage rights on the EJ&E and run its trains on the J tracks anyway without an ownership position.
How do those rights affect the line in areas like improving/eliminating AGCs & maintaining track? Does the majority of those kind of expenses then fall on the EJ&E or would they come out of any fees charged to CN for the right to run pn the tracks plus improvement/maintenance?
Unless someone here has the Agreement before them questions about what improvements will be needed and how they will be paid for cannot be answered at this site.
Trackage Rights Agreements are each unique as a result of the many and varied circumstances which each operation entails. Speculation by we spectators is a waste of time but we may assume that CN has one or more options available.
I actually think it is better off for Chicago area railroading if CN doesn’t purchase the EJ&E. It would be a better line to have like the IHB and have several class ones own it. I’m sure CN isn’t the only railway who wants the EJ&E, if CN abandons the deal don’t be surprized to see UP or BNSF knocking on the door. It would be better to have more than one class one share ownership of the EJ&E. I think the EJ&E has the potential to have many more trains than what even CN is proposing right now. The EJ&E is a excellent solution to the Chicago area congestion, but I think it would be more fair to share the line. EJ&E has upgraded portions of the Western Subdivision to CTC over the past few years, so it has done some improvements to the line already, and it usually keeps the line in excellent shape with frequent maintenence.
One: is the CN trackage rights in EJ&E available in the public domain? Once we know what the rules for that operation is then we know if and how much CN can clobber the merger opposition. Could be 9this is only speculation that CN has to only provide enough capacity for their proposed operation.
NOPE - Not to be found in the local courthouse. The only folks that might get to look at it besides the railroads are STB, SEC and Justice Department folks under a confidentiality agreement.
If anybody is interested… The city of Aurora, IL will be holding a town-hall meeting at the Waubonsie (I hope I spelled that right) Gold Campus from 6-8pm on Wednesday July 23 in regards to the proposed purchase of the EJE by CN. Now that CN has claimed they might back out this could get interesting. No word on any special guests. I have to work so I will not be able to attend.
I have heard about that meeting Chris. Also, the City of Aurora has posted signs right at the public grade crossings of hte “J” and streets that intersect the tracks like Liberty Street, etc. and the signs say someting like “NO MORE FREIGHT TRAINS”…ETC. You’re right, this could get very interesting indeed.
The CN could shove all their traffic via the J for a few years and then buy the line. When the locals compalin about the “increase” in traffic the CN responds with what increase?
Naperville and Plainfield will also be present at the meeting. People in Plainfield can’t even stand what goes through there now, they even banned the use of whistles through Plainfield on the Western Sub, and they are also trying to ban whistles on the Illinois River Line. The IRL will need a lot of new gated crossings for that, many are still not gated.
Crest Hill has also shown some opposition for the deal, but I really can’t blame them. The trains are coming off a 10 MPH speed restriction and go very slow through one crossing right by a busy bus company, often stopping waiting to get over Bridge 198 which is a major single track bottleneck with even the 20 or so trains a day now. I think either CN should double track and fix the bridge or the city should really consider a overpass. Joliet hasn’t shown opposition but this deal could potentially create a lot of business growth opportunies in Joliet.
I don’t know if it was the greatest idea to say they aren’t tied to the deal because now towns are going to say “why does CN need to route the trains through our town when they have said they don’t need to”, and I’m sure towns, mayors and state representatives will be referring that to the STB frequently. I think CN saying that was a big mistake.