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Canadian National Railway Co. and Canadian Pacific Railway now have an idea of how long it will take the Surface Transportation Board (STB) to review their regional acquisition/integration applications.

Yesterday, the STB accepted CN's application to control a major portion of the Elgin, Joliet & Eastern Railway Co. (EJ&E) and released a procedural schedule. The board also announced it will review the acquisition as a minor transaction and prepare a full Environmental Impact Statement (EIS) in light of projected traffic increases on certain line segments and potential impacts on various communities.

CN is seeking regulatory approval to acquire a major portion of the 198-mile EJ&E, which operates a mainline that encircles Chicago, and name the operations the EJ&EW West Co. In September, the Class I reached a deal with U.S. Steel Corp. to acquire most of the EJ&E for $300 million.

CN had hoped to obtain regulatory approval by spring 2008, but it likely will take much longer. The STB — which might ordinarily review a similar transaction's transportation merits and issue a final decision by April 2008 — won't make a decision until the environmental review process is completed, the board said. The length of time needed to prepare the EIS and complete an environmental review can't be predicted, but in past cases, an EIS process sometimes has taken 18 months to several years to complete, the STB said.

"The EIS process in past cases cited by the STB involved much larger and more complex transactions, as well as numerous communities," CN officials said in a response to the STB's decision. "CN believes that the environmental issues associated with the EJ&E transaction can be addressed thoroughly, given the STB's position and the interests of affected communities, to permit a STB decision on the 'J' transaction in 2008. CN appeciates the importance of the EIS and will work closely with the STB on this process."

The board will accept comments on the transaction until Jan. 28; responses and rebuttals to comments will be due March 13.

Meanwhile, the STB released a procedural schedule for CPR's application to control the Dakota, Minnesota & Eastern Railroad Corp. (DM&E) — a transaction the board already has deemed a major one.

The STB will accept comments on the application until March 4; responses and rebuttals to comments will be due April 18. The board plans to conduct a public hearing or hear arguments in June and issue a final decision by Sept. 30. The decision would take effect on Oct. 30.

In September, the railroads reached an agreement under which CPR would acquire the 2,500-mile DM&E and its subsidiaries — including the Iowa, Chicago & Eastern Railroad Corp. — for $1.5 billion. A month later, the parties completed the transaction, pending STB approval.