Proposed rail merger jumps environmental hurdle, but some members of Congress push delay
The proposed rail merger between Canadian Pacific and Kansas City Southern railways passed a major milestone when its Final Environmental Review, released Jan. 27, found no major environmental objections to upholding the merger.
But on Feb. 17, members of Congress urged the Surface Transportation Board, which must still give the final go-ahead, to delay its decision until the board completes a Chicago region impact assessment.
U.S. Sens. Dick Durbin and Tammy Duckworth and Reps. Raja Krishnamoorthi and Delia Ramirez said the board’s environmental review was insufficient because it was based on projected freight rail traffic growth provided by Canadian Pacific. Canadian and Kansas City Southern agreed to merge in 2021 in a $31 billion deal.
The Surface Transportation Board’s Office of Environmental Analysis issued its final Environmental Impact Statement, finding that “most of the potential adverse impact of the Proposed Acquisition, including impacts on grade crossing delay and emergency vehicles, would be negligible, minor and/or temporary.”
The STB must still give a final approval for the merger to take place. Canadian Pacific agreed to purchase Kansas City Southern in a deal worth $31 billion after CP said it would discount $3.8 billion of KCS debt. The final decision was supposed to be announced by this summer.
Agriculture interests strongly support the merger, which would be an “end-to-end" merger because the two railroads have virtually no overlapping routes. If approved, the merger would create the fifth-largest integrated rail network.
The EIS underwent a public comment period and made changes based on comments received. The review looked at consequences of the merger if it goes through, such as increased traffic at certain rail crossings, the potential risks of derailments and spills, and changes in emissions.
During the comment period, several urban suburbs opposed the merger, arguing that miles-long trains will increase traffic congestion and snarl traffic in certain areas. The agency did recommend seeking federal funding for pedestrian overpasses or underpasses.
David Murray can be reached at [email protected].
