U.S. lawmakers urge board to defer railroad merger decision

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WASHINGTON (Reuters) – U.S. lawmakers on Friday asked the Surface Transportation Board to defer a decision on a proposed Canadian Pacific (NYSE:CP) merger with Kansas City Southern (NYSE:KSU) until the board completes an Chicago region impact assessment.

U.S. Senators Dick Durbin and Tammy Duckworth and Representatives 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.

Canadian Pacific declined to comment. The board did not immediately respond to a request for comment.

The merger would combine into a single rail system to be known as Canadian Pacific Kansas City including 20,350 miles of track, including approximately 8,600 miles in the United States, and would extend from Canada, the board said.

The Democratic lawmakers said the board did not include modeling from Chicago region commuter railroad Metra whose tracks CP operates on. The lawmakers said Canadian Pacific “projects that the merger would increase freight traffic in Chicago area communities from three freight trains per day to 11, but Metra projects the merger could result in an increase to 18 trains per day.”

The board issued its Final Environmental Impact Statement on Jan. 27. The board said it would consider the transportation merits of the proposed acquisition, and the environmental record, as part of its final decision.

The lawmakers said “moving forward with a decision on the merger without further analysis risks overlooking serious adverse impacts on these communities, including congestion and passenger train delays, grade-crossing delays that impact auto traffic and emergency services, and dangerous conditions for the public.”