I haven’t heard any news lately about Canadian national’s attemp to buy the Elgin Joliet & Eastern. Does anyone know if the merger has happened, or if the CN has given up on the chase. Are they still fighting for it? Will CN still give up if a deal is not struck by a certain time?
There IS a deadline, but it’s been imposed by the company that owns EJ&E, NOT by CN. CN has been running into NIMBY hurdles and has been asking for more time, but the owners of EJ&E are refusing to budge.
That is not quite correct from my understanding. The CN asked the STB to fast track the merger and they declined. CN has set a date of January 2009 for an up or down decision. Communities had until some time in September to voice their concerns. Here is New Lenox the Mayor actually said people would die at the railroad crossings while trains blocked the roads. He declined comment when I asked why that wasn’t happening on the Metra Rock Island line right through the center of town. I am pretty sure that the arguements the communities used are pretty standard and none of them addressed the real issues of traffic density and other road and rail issues. Most of it was ths standard nimby stuff about noise and pollutuion so I don’t think it will carry much weight. A local congress woman is planning state legislation forbidding rail traffic increases or mergers or some such nonsense. Of course, it was election season so who really knows. With the economy the way it is CN may not want to go ahead any way but that is pure speculation. The bottom line is there has been no decision yet. I believe the STB report is due out in late December or early January.
See the article in the current - December 2008 - issue of Trains, on most of pgs. 10 -11, entitled “CN-EJ&E Deal Hits Unlikely Snag - With EJ&E’s current owner refusing to extend a sale deadline, once-inevitable merger may fall apart”. The artilce is by Michael W. Blaszak - a Chicago-area attorney who is pretty well wired into the local railroad community, esp. at the official levels. He pretty clearly states that the show-stopper is U.S Steel’s unwillingness to extend the deal - esp. for CN to obtain STB approval - beyond its present December 31, 2008 expiration date.
- Pul North.
I find USX stance to be specious at best. If you want to sell something why would you tell the potential buyer he had a deadline or you were going to keep it? I think it had more to do with fiscal year accounting if I were to guess why the deadline. I wouldn’t be surprised in the current economic climate with steel way down the money would come in handy no matter when it sold. Naturally both parties have come to an agreement and want to move on. I do think it will be approved and possibly consumated before the end of the day on 12/31.
Perhaps, sticking to USX’s deadline is because they have another interested buyer?
I believe this is all very convenient. STB will issue a decision after the deadline. USX declines to extend the deadline. Therefore, the STB decision will not matter as the deal is already off of the table.
Now, why would USX not extend the offer? Perhaps they have second thoughts about the sale. Perhaps they believe the line is now more valuable than the $300million. Perhaps they are concerned about the service to and from the Gary Works plant (EJE runs a daily train of loaded steel coils from USX to Van Loon for interchange with NS…it is a daily move and is very punctual). Perhaps there is very large political pressure for them not to extend the deadline (I could see a quid pro quo, or perhaps a negetive quid pro quo in the works…do you really want to sell this line?..do you really want increased regulation in the form of OSHA inspectors, EPA inspectors, etc). Lake County politics are just about as notorious as Chicago.
I dont think this deal will get done. Too many problems in Joliet with congestion and dragonflies.
ed
I also think the deal will fall through and everything will stay as is. However, I’m still getting my EJ&E photos now in case if something does happen. The EIS will be completed sometime between December 1st to January 31st. However, that’s not when the sale will be finalized. It would take 30 days to make the sale go through so the decision would come between December 31st and the end of February. Basically if the EIS isn’t completed by December 1st the deal will probably not happen.
Basically, it is the suburbs on the entire EJ&E Western Subdivision from Mundelien to Plainfield. Joliet, Crest Hill and CN came to a agreement where if the merge went through, whistles would be banned and the local emergency services would have a way of knowing when the train is going through a crossing so they can avoid it. Frankfort and New Lenox on the Eastern Subdivision are also strongly against the merger. Barrington has done pretty much anything they can to get all of the other towns on the line to oppose the deal, and much to CN’s displeasure it has worked.
If all these communities (that were built where they are BECAUSE of the railroad) are so concerned for safety, and IF the owners really want to sell the “J”, perhaps the owners could put a (temporary)10mph speed restriction on all trains passing through these yuppie burbs, claiming that the railroad is only answering the safety concerns. After all, if these burbs want to play hardball…
The worst part where I live in New Lenox is that the railroad was double tracked for most of its existance and runs through farm fileds. Granted that is were the village envisions fields of McMansions and 100,000 person growth over the next decade but there is abslutely nothing there now it would interfere with if and when those houses ever get built. Every year the village goes for a fire and police protection tax increase citing this potetial growth and wanting the current residents to pay for the services so the new homeowners don’t have to. Now what person in their right mind is saying they want the village to increase 500% in size and pay for the roads and services to create massive congestion. I am also amazed that if the EJ&E has the potential for massive wrecks, pollution, noise, inconvenince, etc. why the Rock Island line through both towns is not seen in the same light.
In another thread on this a couple of months ago, someone suggested that if this acquisition falls through, then CN should enter into a simple trackage rights or haulage rights agreement with the EJ&E for CN to run its trains over the appropriate portion of the EJ&E’s lines.
[EDIT-2: It was “Eolafa (a.k.a. Jim)”, in the July 22 - 24, 2008 thread titled “Re: CN says its not tied to Chicago deal”, at: http://cs.trains.com/trccs/forums/p/132959/1493908.aspx#1493908 - PDN.]
No (or only a little) STB review*, because who knows how many trains will run, and how often ?
(* - Note that I concede that I’m not an expert on this point, and there was some debate about it on the other thread. But I understand that generally such rights agreements provoke little review unless they amount to a complete discontinuance of service, or another fundamental change. A shift to a more efficient route is merely day-to-day business.)
[EDIT-1: From the Trains Railroad Reference - ABCs of Railroading - “Trackage and Haulage Rights” article by Michael W. Blaszak, Published: Monday, May 01, 2006, as found at: http://www.trains.com/trn/default.aspx?c=a&id=273
“Trackage rights agreements, meanwhile, are regulated by the Surface Transportation Board and thus are matters of public record.”
“Railroads like the [haulage rights] concept because, under a series of federal and court decisions, haulage has been held to be a commercial arrangement outside the STB’s trackage rights jurisdiction.” (emphasis added -
Good thinking but there is a fly in the ointment. The EJ&E can only handle the trains if the track is restored to a two track mainline. I suspect that CN intended to invest quite a bit in the EJ&E after the $300 million purchase to make it an up to date bridge route. They may even have had other railroads lined up for additional traffic to bypass Chicago helping to offset the cost. Now this is speculation on my part but it would make sense for some unit trains heading east or west to be blocked in say Elkhart or Council Bluffs and roll right around Chicago saving considerable time.
CN could always work with the EJ&E to make upgrades to the track. Maybe CN could pay for part of the double tracking while U.S Steel pay for the other part. I can see a IHB type operation formed on the EJ&E in the future with CN, BNSF and UP trains. There’s nothing the towns can do if EJ&E retains ownership of the line and they grant CN trackage rights. I think the deal would’ve gone through if CN increased traffic before the announcement of the merger was made like they did on the WC. Barrington probably wouldn’t have even noticed the change in traffic…
Yes - I recall seeing someplace that CN planned on another $100 million for improvements, but I can’t find that or a refernence to it right now. The Trains article says that 19 miles of second main track would be “constructed” [don’t know if that is the same as “restored”, or in a new location ?]. Further, the Trains article says that CN allocated $40 million for grade separations and other mitigaiton measures.
- Paul North.
If CN is only buying MOST of the EJ&E, then will they still repaint the locomotives, since they don’t own the whole system as they do with the W, and IC? After all, USX still needs some railroad to serve their plant, and judging on my interpretation of the article, it won’t be CN.