SURFACE TRANSPORTATION BOARD FINES CANADIAN NATIONAL FOR MISREPORTING STREET-CROSSING DELAYS IN CHICAGO AREA

[STBNews@xxxxxxxxxxx]

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>From the Surface Transportation Board, Washington, D.C.
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The Surface Transportation Board today fined Canadian National Railway
Company $250,000 for "knowingly violating Board orders" regarding the
reporting of street-crossing blockages in the Chicago area. The Board also
extended its oversight regarding the CN-EJ&E merger for an additional year.

         The fine is the first ordered by the Board since its inception in
         1996.

         The Board requires Canadian National to report every
         street-crossing blockage of 10 minutes or more as a condition of
         the Board's approval of its 2008 acquisition of the Elgin, Joliet
         and Eastern Railway Company. In its November and December 2009
         monthly reports, the railroad reported a total of 14 blockages
         caused by stopped trains. But an independent audit conducted on
         behalf of the Board by its third-party consultant, HDR Inc., found
         1,457 instances during that same period of crossings blocked for
         10 minutes or more by stopped or slowly moving trains.

         The Board held a hearing on April 28 to hear from both CN and the
         consultant.

         In today's decision, the Board found that the record "supports the
         conclusion that CN has knowingly violated the Board's orders that
         CN report, on monthly and quarterly bases, the date and
         descriptive information for each crossing blockage exceeding 10
         minutes in duration. CN's alleged 'good faith' interpretation that
         the reporting requirements regarded only stopped trains is
         contradicted by both the CN staff admissions and the plain text of
         the Approval Decision."

         The Board's decision
         ( http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/41302?OpenDocument )

          today to extend the original five-year oversight period to
         January 2015 will also require additional reporting from Canadian
         National and another audit to be conducted next year.

         Commissioner Charles D. Nottingham dissented from the decision to
         impose the fine.

         As part of the merger approval decision, the Board established
         numerous environmental and other conditions, including the
         establishment of a Web site, www.stbfinancedocket35087.com, to
         inform the public on oversight matters. The decision and
         conditions are also included in the decision Canadian National Ry.
         and Grand Trunk Corp.,-Control-EJ&E West Co., STB Finance Docket
         No. 35087. Documents are available at www.stb.dot.gov.


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