WASHINGTON, D.C. -- Surface Transportation Board (Board) Chairman
Linda J. Morgan announced on January 3 that, after finding no
competitive or other problems during the first and second annual
rounds of general oversight in the "Canadian National-Illinois
Central" (CN-IC) railroad merger proceeding, the Board has issued a
decision discontinuing its formal oversight of the merger. In ending
the formal oversight process, the Board emphasized that it remains
available to address and enforce merger-related concerns arising out
of conditions imposed on the merger by the Board.
In a
decision issued in May 1999, the Board approved the merger of the CN
and IC railroads. In doing so, the Board established general
oversight for a period of up to 5 years so that the effectiveness of
the various Board-imposed conditions and the competitiveness of
CN-IC service and service provided jointly with The Kansas City
Southern Railway Company (KCS) under the Alliance Agreement with KCS
might be assessed. In the first oversight decision issued in
November 2000, the Board found that the integration of CN and IC had
been successful to that point and had not resulted in service
failures or produced any evidence or allegation of competitive
abuses by CN-IC or the parties to the CN-IC-KCS Alliance Agreement.
CN filed its second progress report with the Board in July
2001, indicating that the merger has been successful to date and
that: CN has added new transportation services and improved transit
times throughout its system; CN also has reported that rail-to-rail
competition is vigorous in the areas where its Alliance Agreement
with KCS is in effect; there have been no complaints regarding
access through the Chicago gateway by North Dakota grain shippers or
the pricing practices of Canadian lumber; and that, by selling its
50-percent interest in the Detroit River Tunnel and transferring its
operational control, CN has resolved any outstanding concerns
regarding the Tunnel.
In the second oversight decision
issued in November 2001, the Board preliminarily concluded that, in
view of the overall affirmative record, there is no apparent need to
continue formal oversight for the full 5-year term or, for that
matter, the next year (the third year). The Board therefore invited
public comments on whether its formal oversight process for the
CN-IC merger should cease. In its subsequent decision ending the
formal oversight process, the Board noted that formal oversight
during the first and second years revealed no significant problems
following implementation of the merger and that the only comment
filed in the second year was positive. While finding that the
general oversight proceeding should cease, the Board emphasized that
it has authority--independent of the formal oversight process--to
enforce or revise merger conditions, as warranted, on its own
initiative or upon the request of shippers or other parties.