BURLINGTON Northern Santa Fe Corp and Canadian National Railway Co announced on July 20 that their respective boards had voted to terminate the ’combination agreement’ to create North American Railways Inc and form an 80500 km coast-to-coast network.
In a joint statement, CN President & CEO Paul Tellier and BNSF Chairman & CEO Robert Krebs said ’we have concluded that it is not in the interests of our shareholders to assume the risks involved in waiting up to two and a half years for a decision on our transaction by the regulator in the United States’.
The Surface Transportation Board had imposed a 15-month moratorium on mergers of large railways on March 17, which was upheld by the Court of Appeals for the District of Columbia Circuit on July 14 (RG 8.00 p457). BNSF and CN felt this would have prevented them from filling a common control application ’until mid-June 2001 at the earliest’, making any decision on the merger ’unlikely before late 2002’.
The two railways aim to achieve the improvements and efficiencies that drove the merger proposal ’to the extent that they can be realised by separate entities’.
The following day, Canadian National and Canadian Pacific Railway announced that they had signed two track-sharing agreements. A five-year deal gives CN access to CPR’s network in New York, New Jersey and Pennsylvania for the movement of forest products to distribution centres in New York City, Albany, Philadelphia and Scranton, Pennsylvania. CPR also will interchange CN traffic with US railways in Albany, Pennsylvania and Long Island.
The second three-year agreement gives CPR access to CN’s Toronto-Chicago main line, for a minimum of 14 merchandise and/or intermodal trains per week. The two railways already have track-sharing agreements in British Columbia, Winnipeg, Edmonton, Ottawa and Toronto. n
