CN and Village of Mundelein, Ill., reach agreement on mitigation plan for EJE transaction

CHICAGO, Dec. 9, 2008 — CN (TSX: CNR)(NYSE: CNI) and the Village of Mundelein, Ill., located northwest of Chicago, today jointly announced a voluntary mitigation agreement addressing the municipality's concerns regarding CN's proposed acquisition of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E). 

Under the agreement, CN will assist in the maintenance of quiet zones, and take various steps to increase the fluidity of train movements through Mundelein, as well as improve safety, communications, emergency preparedness, and Metra access.

The agreement is contingent upon regulatory approval of CN's proposed acquisition of the EJ&E. The transaction is being reviewed by the Surface Transportation Board (STB), which is encouraging voluntary mitigation agreements between CN and communities.

Gordon Trafton, CN senior vice-president, Southern Region, said: “CN is grateful for the cooperation it received from the Village of Mundelein in negotiating a realistic, effective mitigation agreement. The agreement not only addresses the municipality's concerns about train operation changes contemplated by our acquisition of the EJ&E, but also establishes a framework for a continuing dialogue on any future grade-crossing issues arising from the transaction.”

Mundelein Mayor Ken Kessler said: “The Village thought it imperative that on behalf of its residents and interest of the community that we engage in a dialogue with CN to address our concerns regarding the EJ&E transaction. We believe our efforts have been fruitful, producing an agreement with a range of mitigation initiatives that will safeguard our community's interests.”

Trafton said: “Today's agreement with Mundelein adds to those we have reached with Joliet, Crest Hill and Chicago Heights, Illinois, and Dyer, Indiana. We are continuing talks with several other municipalities on the EJ&E line in hopes of reaching similar voluntary mitigation agreements in the near future.”

CN is committed to meet all of the STB's established mitigation standards under a comprehensive mitigation program that would cost about $60 million, in addition to the $100 million CN has earmarked for infrastructure improvements on the EJ&E.

With the STB's issuance Dec. 5 of the final Environmental Impact Statement on the proposed acquisition of the EJ&E, CN remains hopeful that the Board will authorize the transaction soon and allow its benefits to be realized. CN's EJ&E transaction will provide clear transportation, economic and environmental benefits to the Chicago region and the nation.

CN and U. S. Steel, the indirect owner of the EJ&E, announced on Sept. 26, 2007, an agreement under which CN would acquire most of the EJ&E for $300 million, subject to regulatory approval by the STB. More information on the transaction, including a map of the areas served by the EJ&E and CN, is available by clicking on the EJ&E Acquisition icon on CN's website.

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