CN completes Mississippi rail line sale agreements

HOMEWOOD, Ill., May 13, 2009 – CN (TSX: CNR)(NYSE: CNI) today announced the completion of agreements to sell three Mississippi line segments to Grenada Railway, LLC and Natchez Railway, LLC both non-carrier affiliates of V&S Railway and A&K Railroad Materials. This deal transfers ownership of 252 miles of track and preserves rail service on the two longest of these rail lines for at least the next two years. The terms of the transaction were not disclosed.

“CN is pleased that this deal with Grenada Railway and Natchez Railway will allow these rail lines to remain in place serving Mississippi business,” said Jim Vena, CN's senior vice president, Southern Region. “CN will continue to offer interchange service to the new short lines, maintaining every customer's seamless access to the broader CN network.

“CN recognizes the importance of rail service to Mississippi and remains committed to the state. We continue to operate nearly 600 miles of mainline track serving scores of Mississippi businesses and carrying Amtrak passenger service,” concluded Vena.

Since 2003, CN has worked with the State of Mississippi in its economic development efforts to bring additional rail business to these routes. Those efforts have not created a substantial increase in rail traffic and volume on these routes has dropped to the point where it is no longer economically viable for CN to continue their operation.

This transaction involves the former CN Grenada subdivision, the Water Valley Branch Line and the former CN Natchez subdivision. The Grenada line runs roughly 175 miles from the Mississippi/Tennessee border to approximately two miles north of Canton, Miss. The 11-mile Water Valley Branch Line intersects the Grenada Line at W.V. Junction and extends to Coffeeville, Miss. The 66-mile Natchez branch runs from Brookhaven, Miss., to Natchez, Miss.

V&S Railway LLC operates successful short lines in Kansas and Colorado. 

Forward-Looking Statements
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