CN and Town of Dyer, Ind., reach agreement on mitigation plan for EJ&E transaction

Pact is CN's third mitigation agreement with a Chicago-area municipality

CHICAGO, Dec. 5, 2008 — CN (TSX: CNR)(NYSE: CNI) announced today an agreement with the Town of Dyer, Ind., located 30 miles southeast of downtown Chicago, that resolves the municipality's issues with 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 creation of quiet zones, and take various steps to improve train operations, safety, communications, and emergency preparedness in Dyer.

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 CN and communities to reach voluntary mitigation agreements.

Gordon Trafton, CN senior vice-president, Southern Region, said: “CN appreciates the Town of Dyer's efforts in negotiating this mitigation agreement, which we believe will manage the community impact of the EJ&E transaction in the best interests of the municipality and CN.

“This is CN's third mitigation agreement with a community along the EJ&E, following pacts signed with the cities of Joliet and Crest Hill, Illinois. We will continue talks with other municipalities on the EJ&E line in hopes of reaching similar voluntary mitigation agreements with them.”

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 $100 million CN has earmarked for infrastructure improvements on the EJ&E.

With the STB preparing to issue the final environmental impact statement on the proposed acquisition of the EJ&E, CN remains optimistic that the Board will issue a positive decision within a time frame that will allow the transaction to close and 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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