CN pact with City of Gary, Ind., marks milestone in EJ&E transaction mitigation

CN agreements now cover all major Indiana communities affected by transaction and almost 50 per cent of population along EJ&E in Illinois and Indiana

CHICAGO, April 13, 2009 — CN (TSX: CNR)(NYSE: CNI) announced today a voluntary mitigation agreement with the City of Gary, Ind., addressing the municipality's concerns with CN's acquisition of the principal lines of the former Elgin, Joliet & Eastern Railway Company (EJ&E). CN completed the acquisition on Jan. 31, 2009, and has begun running trains over the line.

Under the agreement with Gary, CN will provide funding for quiet zones, noise mitigation, emergency response training and economic development, among other items.

Gordon Trafton, CN senior vice-president, Strategic Acquisitions and Integration, said: “Our agreement with the City of Gary marks a milestone in CN's acquisition and integration of the EJ&E for three reasons. First, Gary – the largest city in northwestern Indiana – is very important to CN, because it's home to the EJ&E's Kirk Yard, a terminal that we intend to upgrade and make into a pivotal freight car classification hub on CN's network.

“Second, with the Gary VMA we have agreements with all of the principal northwestern Indiana communities that will see increased train traffic as a result of the EJ&E acquisition. And third, we now have mitigation agreements with a total of 15 Illinois and Indiana communities that have close to 50 per cent of the population living along the EJ&E in both states.

“This achievement demonstrates that CN is doing what we said we would do – we have continually said we planned to reach mutually satisfactory mitigation agreements with cities, towns and villages that would be affected by the transaction, and we're doing it. ”

CN is moving forward with the implementation of mitigation measures contained in its voluntary agreements with other communities, as well as mitigation measures required by the Surface Transportation Board.

CN expects that full integration of the CN and EJ&E networks will be accomplished within three years. As CN completes the integration and planned infrastructure improvements, it is committed to communicate changes in a timely manner to all 33 communities affected by the acquisition.

More information on the transaction, including a map of the areas served by the EJ&E and CN, is available on CN's website.

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