CN enters agreement with competition bureau on BC Rail Partnership

CN says it has reached a consent agreement with Canada’s Competition Bureau regarding its BC Rail Partnership and plans to close the $1-billion transaction by mid-July 2004.

The consent agreement, filed with the Competition Tribunal, builds on CN’s promise in fall of 2003 to share merger efficiencies with BC Rail shippers and assure them competitive transportation options through its Open Gateway Rate and Service Commitment.

Under that commitment, shippers will be able to choose CN to reach markets, or they can route traffic over BC Rail to connecting railways at the Vancouver gateway at lower rates.

CN has negotiated agreements with three connecting railroads at Vancouver – Canadian Pacific, Burlington Northern Santa Fe and Union Pacific – to ensure shippers routing options. The consent agreement will also maintain competitive rates and service for grain shippers in the Peace River region, says the company.

“CN is pleased to move ahead with this transaction and is ready to integrate the 1,500-mile BC Rail into our North American network spanning Canada and mid-America. We brought Illinois Central and Wisconsin Central into the CN family in a flawless fashion, and we expect nothing less in our integration of BC Rail," said E. Hunter Harrison, president and chief executive officer of CN.

The Competition Bureau began its review of the CN-BC Rail Partnership after CN and the British Columbia government announced Nov. 25, 2003, that CN would acquire all shares outstanding of BC Rail, and the right to operate over BC Rail’s roadbed under a long-term lease. Provincial legislation approving the partnership became law in December 2003. No further approvals are required before closing.