CHICAGO, IL, June 27 /CNW Telbec/ - CN (TSX:CNR) (NYSE: CNI) said today a
four-party preliminary memorandum of understanding (PMOU) on the rail line
relocation required for the expansion of Gary/Chicago International Airport
(GCIA) should resolve a key concern that had been raised in opposition to CN's
proposed acquisition of the principal lines of the Elgin, Joliet & Eastern
Railway Company (EJ&E).
GCIA, EJ&E, CSX Corporation, and Norfolk Southern Corporation (NS) signed
the PMOU, which was announced earlier today. CN, while not a signatory to the
PMOU, is committed to honor its terms upon regulatory approval of its EJ&E
acquisition by the Surface Transportation Board (STB) and its assumption of
control of the EJ&E lines.
"CN welcomes this agreement and salutes key stakeholders for working
cooperatively to resolve engineering issues related to GCIA's expansion," said
E. Hunter Harrison, CN president and chief executive officer. "The end result
will also ensure a fluid, effective rail network in Northwest Indiana. This is
important to CN and to the region's economy.
"CN is particularly pleased that this agreement should mean the STB need
not invest additional time and resources in examining concerns that had been
raised by GCIA and others about the potential impact of our proposed purchase
of the EJ&E on the GCIA's operations and expansion plans. We hope that
resolving these issues, including concerns that the STB's Section of
Environmental Analysis had indicated it would review as part of its
environmental assessment, will help to expedite the STB's overall review of
our transaction," Harrison said.
The joint agreement as it affects CN's EJ&E transaction calls for:
- Relocating the EJ&E line;
- Building a bridge over the existing NS Gary Branch to assure EJ&E
continued access to primary customers, and
- Constructing a grade separation at Industrial Highway prior to
relocating EJ&E operations.
"The joint agreement will give Northwest Indiana the rail and air
transportation systems needed to support the region's economic vitality and to
better serve the businesses that can bring good-paying jobs to the area,"
"CN has a strong commitment to Northwest Indiana," Harrison said. "In
addition, today's progress supports CN's planned investment in Kirk Yard, as
part of its EJ&E acquisition. Our transaction could bring millions of dollars
of private investment and employment growth potential to Gary, so Kirk Yard
can once again thrive as a railcar-sorting hub."
Each year, CN spends roughly $20 million in Indiana and pays taxes of
nearly $2.4 million. CN has roughly 250 employees who live in the state with a
payroll of nearly $16 million.
CN plans to acquire the principal lines of the EJ&E for US$300 million
and to spend an additional US$100 million to upgrade the EJ&E and construct
new connections to improve the efficiency of its operations. The transaction
would significantly reduce rail congestion in the urban core of Chicago and
add much needed capacity to the U.S. rail network. CN is prepared to invest up
to US$40-million in various mitigation measures.
This news release contains forward-looking statements. CN cautions that,
by their nature, forward-looking statements involve risk, uncertainties and
assumptions. In addition to the other assumptions contained in this release,
the Company believes the U.S. economy may currently be in a mild recession but
that it will gradually recover in the second half of 2008 and that the global
economy will grow at a moderate pace throughout the year. The Company cautions
that these, as well as its other assumptions stated above, may not
materialize. The Company's results could differ materially from those
expressed or implied in such forward-looking statements. Important factors
that could cause such differences include, but are not limited to, industry
competition, legislative and/or regulatory developments, compliance with
environmental laws and regulations, various events which could disrupt
operations, including natural events such as severe weather, droughts, floods
and earthquakes, the effects of adverse general economic and business
conditions, inflation, currency fluctuations, changes in fuel prices, labor
disruptions, environmental claims, investigations or proceedings, other types
of claims and litigation, and other risks detailed from time to time in
reports filed by CN with securities regulators in Canada and the United
States. Reference should be made to CN's most recent Form 40-F filed with the
United States Securities and Exchange Commission, its Annual Information Form
filed with the Canadian securities regulators, its 2007 Annual Consolidated
Financial Statements and Notes thereto and Management's Discussion and
Analysis (MD&A), as well as its 2008 unaudited interim consolidated financial
statements and MD&A, for a summary of major risks.
CN assumes no obligation to update or revise forward-looking statements
to reflect future events, changes in circumstances, or changes in beliefs,
unless required by applicable laws. In the event CN does update any
forward-looking statement, no inference should be made that CN will make
additional updates with respect to that statement, related matters, or any
other forward-looking statement.
CN - Canadian National Railway Company and its operating railway
subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific
oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert,
B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key
metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth,
Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis,
St. Louis, and Jackson, Miss., with connections to all points in North
America. For more information on CN, visit the company's website at www.cn.ca.
For further information:
For further information: Jim Kvedaras (Media), Senior Manager, Public &
Government Affairs, CN, (708) 332-3508; Robert Noorigian (Investment
Community), Vice-President, Investor Relations, CN, (514) 399-0052