CN reaches voluntary mitigation agreements with Frankfort and Hoffman Estates, Illinois

Growing list of agreements demonstrates CN's commitment to deliver workable solutions to communities affected by EJ&E transaction

CHICAGO, Dec. 16, 2008 — CN (TSX: CNR)(NYSE: CNI) announced today agreements with the villages of Frankfort and Hoffman Estates, Ill., addressing the municipalities' issues with CN's proposed acquisition of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E). 

Under the agreements, CN would assist in the creation and maintenance of quiet zones, install safety fencing near schools and parks, implement noise mitigation, provide emergency response personnel training and emergency communication improvements, and address specific transportation issues unique to each municipality.

The agreements are 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.

“CN believes the growing list of mitigation agreements should send a clear message to everyone with an interest in our EJ&E transaction,” said Gordon Trafton, CN senior vice-president, Southern Region. “That message is that CN's commitment to mitigating the community impacts of the proposed rail line acquisition is real and CN is delivering tangible, workable solutions to communities along the EJ&E that would experience greater train volumes as a result of the transaction.

“We appreciate the cooperation of these communities in reaching agreements on mitigation plans, particularly given their strong concerns about the transaction. 

“With today's announcement, CN has now reached agreements with eight municipalities, with discussions ongoing with additional communities.  We have also reached an agreement with Amtrak on its continued access to and from Chicago's Union Station and are engaged in constructive discussions with Metra.”

CN estimates its comprehensive voluntary mitigation program will cost the company more than $60 million.  Together with the $20 million CN expects to pay for the consultant working on the regulator's environmental review of the transaction, this $80 million is an unprecedented expenditure on environmental issues for a transaction that involves a private sector investment of $300 million for the purchase and $100 million in proposed improvements to the line.

With the formal publication of the notice of availability of the Final Environmental Impact Statement on the transaction in the Federal Register Dec. 12, the record for the Surface Transportation Board (STB) is now complete. CN is urging the STB to issue a final, positive ruling on the transaction to allow it to close before the end of the year so that its significant transportation and economic benefits for Chicago and the nation can be realized.

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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