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CN reaches 20th voluntary mitigation agreement

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February 14, 2001 CN reached a voluntary mitigation agreement related to its acquisition of the principal lines of the former Elgin, Joliet and Eastern Railway Company (EJ&E) with the Village of Lake Zurich, Ill., located 37 miles northwest of downtown Chicago. With this agreement, CN has VMAs with 20 municipalities that are home to two-thirds of the population living along the EJ&E in Illinois and Indiana.

CN’s latest VMA will
provide funding for a range of environmental measures, including rail noise
mitigation, maintenance of an existing quiet zone, emergency response training,
safety initiatives, and improved communication. CN completed its EJ&E
acquisition on Jan. 31, 2009, and, while traffic volumes overall remain down
owing to general economic conditions, CN has rerouted a limited number of its
trains over the line.

Jim Vena, senior
vice-president, Southern Region, said: "CN has made substantial strides in
dealing with the effects of the EJ&E transaction on communities along the
line, as well as in integrating the railroad into our North American network.
We have been committed to developing constructive working relationships with
communities on the EJ&E, and we have been particularly pleased that so many
EJ&E municipalities have been willing to undertake productive VMA
negotiations with CN. The current number of VMAs – 20 out of 33 communities
along the EJ&E – and a series of other measures underscore our commitment
to work with municipalities to minimize the transaction’s impacts on EJ&E
communities and to ensure safe operations."

Such measures include:

– A substantial reduction in
the number and duration of vehicular delays caused by trains stopped at EJ&E
grade crossings for 10 minutes or more;

– Creation of a section on
CN’s website with information about EJ&E construction projects and routine
maintenance activities that may affect vehicular traffic;

– Community liaison
meetings to follow through with voluntary mitigation agreements and regulatory
requirements. These meetings have generated positive partnerships with affected
communities and solid feedback to the company;

– Operation Lifesaver
presentations at schools to educate children and teenagers about the
importance of rail safety and dangers of rail trespass;

– Comprehensive emergency
responder training programs offered by CN at its own expense to all communities
along the EJ&E, including tank car specialist training at Pueblo, Colo.
With this training, the Chicago area possesses as high a concentration of
highly-qualified experts as any region on the CN system;

– Application of new safety
equipment on the EJ&E to monitor rail wheel and bearing conditions, as well
as rail lubricators to reduce train noise, and

– Advanced planning for the
construction over the next few years of key connections that will enhance the
fluidity of train movements along the former EJ&E and CN’s network in the
greater Chicago area.

CN has been very
transparent in its implementation of this transaction. In compliance with the
Surface Transportation Board’s (STB) Dec. 24, 2008, decision approving the EJ&E
transaction, CN files monthly operational and quarterly environmental reports
at the Board with updates on the status of implementation of the environmental
mitigation measures imposed by the agency.

CN has also been actively
engaged in a dialogue with EJ&E customers on integration issues and flawlessly
cut-over the railway to its computerized operating system that extends the
benefits of CN’s Precision Railroading model to EJ&E shippers and

"CN has been working
productively with the communities having VMAs with the company to address a broad
range of issues, particularly safety," Vena said. "And we continue to
work with communities along the EJ&E that do not have agreements with CN to
ensure we implement the safety and environmental conditions required by the
STB. We will strive to work cooperatively with all the EJ&E communities and
to smoothly implement this transaction, which will enhance transportation efficiency
and generate regional environmental benefits."

CN expects that full
integration of the CN and EJ&E networks will be accomplished within three

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