Illinois congressional delegation supports communities’ objection to CP-KCS merger

An aerial photograph of a rail yard.

Illinois congressional leaders are backing Chicago suburbs in their objections to the proposed merger between railways Canadian Pacific and Kansas City Southern.

In a Monday letter addressed to Surface Transportation Board Chairman Marty Oberman, a U.S. House and Senate delegation representing the state expressed concern that the merger between CP (NYSE: CP) and KCS as currently proposed would result in “significant impacts on noise, emergency response time, commuter rail operations, the environment and pedestrian safety.”

Blocked crossings, Metra rail commuter delays and an increase in freight traffic on tracks between downtown Chicago and O’Hare International Airport also are concerns, the delegation said. The letter was signed by Senate Majority Whip Dick Durbin, Sen. Tammy Duckworth, and Reps. Raja Krishnamoorthi and Marie Newman — all Democrats from Illinois.

The congressional leaders said local opposition to the merger has grown, with more than 11 Illinois communities filing comments to STB about how the addition of eight to 11 freight trains running their communities per day could impact traffic and safety. They also highlighted the involvement of eight western Chicago communities, who have formed the Coalition to Stop CPKC and filed comments to the board, in opposing the merger.

Separately, the Coalition to Stop CPKC has given its support to a proposal by CP rival CN (NYSE: CNI) to take over KCS’ Springfield line in Missouri and Illinois. CN is arguing the board should consider the railway’s request as a condition for STB’s approval of the merger since the Springfield line runs parallel to CP’s line in that region. CN also said it would invest $250 million into that line. CP opposes CN’s request.

“We urge you to fully consider the community concerns as you evaluate the merger and to provide strong, comprehensive mitigation and oversight measures, if necessary, to address the merger’s impacts,” the letter stated. “In addition, we encourage the STB to come to Illinois to hear directly from impacted communities as you consider this merger. Input from local communities will help contextualize and supplement the STB’s forthcoming environmental impact statement, which we are eager to review.”

Shareholders of CP (NYSE: CP) and KCS approved the $31 billion deal in December and the merger now sits before STB for review. CP has said it hopes for the agency’s approval by early 2023.

In response to recent filings from stakeholders and the other Class I railroads, STB said Monday it will conduct a three-day hearing in late September over the CP-KCS merger.

The Chicago region can be prone to freight rail traffic backups because the city is a major interchange point between the eastern and western U.S. The region also is densely populated, which translates into limited opportunities to build out infrastructure. Severe winter weather also has been known to snarl freight rail traffic.

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