Canada's two big railways to share track

MONTREAL (July 21) - The day after it called off a merger with the BNSF Railroad, the Canadian National Railway Co. announced two agreements today with the Canadian Pacific Railway Co to share track in Canada and the United States, Reuters reported.

Under a five-year pact between Canada's dominant railway companies, Montreal-based CN -- which called off a $19 billion deal to merge with Burlington Northern Santa Fe Corp. Thursday -- will gain access to CPR's Northeastern U.S. network in New York, New Jersey and Pennsylvania.

CPR will move CN's forest-products traffic to distribution centers in New York City, Albany, New York, Philadelphia and Scranton, Pennsylvania. CPR also will interchange CN traffic with major U.S. railroads in the Albany area and in Pennsylvania, as well as with the New York & Atlantic Railroad at Long Island, New York The agreement may be expanded to other commodities.

Under a second three-year deal, CPR, with head offices in Calgary, will gain access to CN's Toronto-Chicago main line. CPR will route a minimum of 14 merchandise and intermodal trains per week over CN's line to Chicago from Canpa Junction in west Toronto, or Komoka, west of London, Ontario.

"These agreements will significantly improve infrastructure utilization and provide railway customers with new, efficient routing options and extended market reach in key north-south and east-west trade corridors,'' CN president Paul M. Tellier said in a statement. On Thursday, CN called off its union with Burlington Northern because of a U.S. moratorium on big rail mergers, which would have delayed the process by more than two years.

The two railways said they are also exploring other joint ventures.

CN shares were at C$43.80, down 60 Canadian cents, on Friday morning on the Toronto Stock Exchange. CP shares were at C$38.55, up 30 Canadian cents. ($1-$1.47 Canadian)

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