WASHINGTON — Canadian National is making a bold claim it will pull more trucks off the highway than projected for the entire Canadian Pacific-Kansas City Southern merger if regulators force the divestiture of the KCS line connecting Springfield, Illinois and Kansas City.
CN told the Surface Transportation Board last month that it intended to file a so-called reactive application that would formally request the divestiture of the former KCS Gateway Western track connecting Springfield to Kansas City and East St. Louis, Illinois.
If federal regulators make divestiture a condition of the CP-KCS merger, CN says it will spend $250 million to upgrade the track and tie it to its former Illinois Central Gilman Subdivision to create a new single-line route from Kansas City to Michigan and East. Canada.
“CN expects the environmental review process to show that this condition alone in CN’s compliant application would produce more truck-to-rail diversions than the plaintiffs anticipate for their entire merger,” said CN on Friday in a regulatory filing.
CP and KCS say their proposed merger, which is currently under review by the STB, will divert 60,000 truck shipments to rail each year.
CN’s regulatory filing defended the railroad’s request that the STB conduct an environmental review of its divestiture proposal, which it will formally submit Feb. 28. current and projected traffic volumes on the route.
“CN’s conforming application will present a complete and detailed case in support of its application and will demonstrate that the divestiture of the Springfield line is an appropriate remedy to mitigate the damage the merger would otherwise cause to competitive options and the adequacy of the transportation,” CN said in its filing. .
Two communities along the old Western Gateway – Lockport and Manteno, Illinois – urged the STB to support the road divestiture to CN.
CP says CN’s proposal to divest the line is “baseless”. There is no precedent for forcing an online sale as a condition of an end-to-end merger that results in no loss of competition, CP wrote in a Jan. 28 filing. And there is no reason to include the potential divestiture in the environmental review of the CP-KCS merger, argues CP.
CP also indicates that the former Gateway Western rail line will be an integral part of the combined CP-KCS network.