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Environmental Impact Statement should clear the way for final STB decision on EJ&E transaction

Posted on: Friday, 12 December 2008, 12:20 CST

Key mitigation issues addressed in final environmental impact statement;

CN continues to reach voluntary mitigation agreements with communities

WASHINGTON, DC, Dec. 12 /PRNewswire-FirstCall/ - CN (TSX: CNR)(NYSE: CNI) said that today's publication by the U.S. Environmental Protection Agency (EPA) in the Federal Register of a notice of availability of the Final Environmental Impact Statement (EIS) on CN's proposed acquisition of the major portion of the Elgin, Joliet & Eastern Railway Company (EJ&E) should clear the way for the Surface Transportation Board (STB) to promptly issue a final decision on the transaction.

On Dec. 5, the STB's Section of Environmental Analysis (SEA) issued the Final EIS on this transaction. EPA's publication of the notice of availability is the final step in the environmental review process under Council on Environmental Quality regulations.

"SEA has conducted a thorough, comprehensive environmental review of this transaction," said E. Hunter Harrison, president and chief executive officer of CN. "SEA has recommended significant mitigation for communities along the EJ&E line addressing a range of issues in the final EIS, including all of the measures contained in the comprehensive voluntary mitigation plan submitted by CN. Significantly, the final EIS acknowledges the benefits of the transaction to many Chicago neighborhoods and suburbs and reflects CN's view that the impacts on communities along the EJ&E can be mitigated in fair and reasonable ways."

By addressing all significant environmental impacts along the EJ&E line, based on the STB's established standards, CN's comprehensive voluntary mitigation program provides for improvements that address noise, safety, and crossing delays. CN estimates such mitigation will cost CN more than $60 million. Together with the $20 million CN has paid for the consultant working on the environmental review under SEA's direction, 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.

Since announcing this transaction more than a year ago, CN has reached out to communities and other stakeholder leaders to find effective ways to balance the specific needs of communities along the EJ&E line with the critical need for rail congestion relief in the Chicago region. CN has proactively engaged communities in voluntary mitigation efforts and has reached agreements with six communities, with discussions ongoing with several additional communities. CN has also reached an agreement with Amtrak on its continued access to and from Chicago's Union Station and is currently engaged in constructive discussions with Metra.

"CN's EJ&E transaction has been under thorough examination by the STB's environmental staff and its consultants, as well as communities and business groups," said Mr. Harrison. "In fact, it appears that no other rail control transaction has received such an extensive environmental review in the history of the STB."

Mr. Harrison added, "With the publication of the EIS, SEA has laid out all the key facts and the record for the STB is now complete. We believe this transaction will provide meaningful transportation, environmental, and economic benefits for the Chicago region and the nation. We seek the agency's approval before the end of this year so that the transaction can be allowed to close and its significant public interest benefits 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, www.cn.ca.

Forward-Looking Statements

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk, uncertainties and assumptions. Implicit in these statements, particularly in respect of growth opportunities, is the Company's assumption that such growth opportunities extend beyond business cycle considerations and, as such, are less affected by the current situation in the North American and global economies. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, reasonable at the time they were made, subject to greater uncertainty. The current situation in financial markets is adding a substantial amount of risk to the North American economy, which is currently experiencing recessionary conditions, and to the global economy, which is already slowing down. Under these circumstances, it is difficult to make a projection in respect of business prospects for the next 12 to 18 months. The Company cautions that its results could differ materially from those expressed or implied in such forward-looking statements. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments, compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labor disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CN's annual and interim reports and Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca

SOURCE CN

Source: PR Newswire

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