As Canadian National Railway tries to get a federal appeals court to force the Surface Transportation Board to rule soon on its Chicago-area plans, the U.S. Department of Transportation has joined in by asking the board to hurry up.
DOT's general counsel, D.J. Gribbin, said in an Oct. 27 STB filing that the department "encourages the board to reach a decision" by Dec. 31.
The STB holds independent status for its economic regulation of railroads, unlike the safety-focused Federal Railroad Administration that is a direct part of the administration under the transportation secretary.
CN has agreed to buy from United States Steel a short line railroad that goes around Chicago in a westward semi-circle. CN has signed to pay $300 million for Elgin, Joliet and Eastern Railway, plans to put $100 million into upgrades so the large railroad can shift its freight off tracks that snag in Chicago's downtown, and pay millions more to help mitigate the impact of this plan on suburbs along EJ&E tracks.
The hitch, CN says, is that if the deal does not close by Dec. 31, U.S. Steel could let it expire, threatening the whole plan. However, the STB is locked into a full-scale environmental review of numerous suburban impacts that might not be done in time, and it rebuffed CN last month when the carrier pushed the board to resolve things sooner.
DOT's Gribbin cited some doubt about whether a later STB ruling would actually cause the deal to collapse, since another part of the agreement between CN and U.S. Steel "potentially allows for delays caused by the regulatory process."
Still, he said, going past Dec. 31 by perhaps just a few weeks could open the deal to legal challenge of the contract terms, and "the public interest would suffer if the consolidation failed simply because of the difference of a few weeks' time."
DOT has found, Gribbin said, that CN's Chicago plan holds "substantial public benefits" of improving area rail efficiency and safety by getting some trains off congested center-city tracks, and expanding capacity on what is now an under-used EJ&E route.
"The risk to the pending transaction is admittedly uncertain," DOT's top counsel wrote, "but it appears that that risk can be avoided entirely with only a slightly more ambitious schedule in place" at the STB.