Calls CN's Baton Rouge to
New Orleans line divestiture
proposal "extraordinarily harmful" to future passenger service in
Louisiana
CALGARY, AB, June 28, 2021 /CNW/ - Canadian Pacific Railway
Limited (TSX: CP) (NYSE: CP) ("CP") announced today that
Amtrak, operator of intercity passenger rail service across
the United States, has submitted
comments urging the Surface Transportation Board ("STB") to
reject Canadian National's ("CN") use of a voting trust in
its proposed combination with Kansas City Southern ("KCS")
.
In its filing made today, Amtrak said CN's proposed divestiture
of the Baton Rouge to New Orleans line "creates a major new
impediment to giving the 2.2 million residents along the
New Orleans-to-Baton Rouge corridor the Amtrak service they
deserve and have long needed."
Amtrak also said, "CN's 'divestiture' proposal is the equivalent
of a homeowner selling their house but reserving the right to
continue to live in it."
"…There is nothing 'clean' about replacing a single freight rail
operator on the KCS Baton Rouge Line with two railroads, each with
the right to operate their own local trains. The resulting
duplication of train services and switching operations would make
all rail services less reliable, and unnecessarily consume track
capacity that could otherwise be utilized for restoration of
passenger rail service."
The filing continues, "As the Board has repeatedly and
consistently stated, conditions imposed on rail mergers must be
'operationally feasible' and produce 'net public benefits.' CN's
proposed 'divestiture' flunks both tests."
On most of its routes, Amtrak trains run on tracks operated by
the nation's largest freight railroads, including Amtrak trains on
CN routes from Chicago and through
Illinois to New Orleans that have a history of operating
challenges and poor on-time performance.
CN has suggested divesting the KCS Baton Rouge-New Orleans line
to a smaller freight operator or even that the line be purchased by
the state of Louisiana, which
would take on the expense of those complex operations.
With a CP combination with KCS, all of that complexity and
potential taxpayer risk is removed. CP is supportive of working
with all stakeholders to introduce intercity passenger rail service
between New Orleans and
Baton Rouge, an outcome with far
more capacity and operational flexibility, and less risk to
Louisiana taxpayers.
CP has consistently received an A rating from Amtrak in its
annual host railroad report card recognizing its industry-leading
on-time performance record. CP is the first Class I railroad
to complete 100 percent certification of its Amtrak schedules.
Public Comment Period for CN Voting Trust Ends
Today
In line with the public comment period, CP plans to
file comments today, explaining why the public interest costs of
CN's proposed voting trust outweigh the non-existent benefits. This
public comment period, and the STB's subsequent deliberations, will
determine the course of competition for U.S. railroading and North
American commerce for the next 150 years.
Now is the time for stakeholders to voice their concerns about
whether CN should be able to lock in its anti-competitive plan to
buy KCS via a voting trust. Stakeholders can express their concerns
directly to the STB by filing before midnight today.
Importantly, the STB has already approved CP's use of a voting
trust and affirmed KCS' waiver from the new rail merger rules it
adopted in 2001 because a CP-KCS combination is truly end-to-end,
pro-competitive, and the only viable Class 1 combination.
As previously announced, CP is continuing to pursue its
application process to acquire KCS so that the pro-competitive
CP-KCS combination can be reviewed by the STB and implemented
without undue delay, in the event KCS' agreement with CN is
terminated or CN is otherwise unable to acquire control of KCS.
For more information on the benefits of a CP-KCS combination and
the risks that a CN-KCS transaction would pose to the railway
industry and North America, visit
FutureForFreight.com.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This news release includes certain forward-looking statements
and forward looking information (collectively, FLI). FLI is
typically identified by words such as "anticipate", "expect",
"project", "estimate", "forecast", "plan", "intend", "target",
"believe", "likely" and similar words suggesting future outcomes or
statements regarding an outlook. All statements other than
statements of historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its
nature, FLI involves a variety of assumptions, which are based
upon factors that may be difficult to predict and that may involve
known and unknown risks and uncertainties and other factors which
may cause actual results, levels of activity and achievements to
differ materially from those expressed or implied by these FLI,
including, but not limited to, the following: changes in business
strategies and strategic opportunities; estimated future dividends;
financial strength and flexibility; debt and equity market
conditions, including the ability to access capital markets on
favourable terms or at all; cost of debt and equity capital;
potential changes in the CP share price; the ability of management
of CP, its subsidiaries and affiliates to execute key priorities;
general North American and global social, economic, political,
credit and business conditions; risks associated with agricultural
production such as weather conditions and insect populations;
the availability and price of energy commodities; the effects
of competition and pricing pressures, including competition from
other rail carriers, trucking companies and maritime shippers in
Canada and the U.S.; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped via CP; inflation; geopolitical instability; changes in
laws, regulations and government policies, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; changes in fuel prices; disruption
in fuel supplies; uncertainties of investigations, proceedings or
other types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of CP's budgeted capital
expenditures in carrying out CP's business plan; services and
infrastructure; the satisfaction by third parties of their
obligations to CP; currency and interest rate fluctuations;
exchange rates; effects of changes in market conditions and
discount rates on the financial position of pension plans and
investments; trade restrictions or other changes to international
trade arrangements; the effects of current and future multinational
trade agreements on the level of trade among Canada and the U.S.; climate change and the
market and regulatory responses to climate change; anticipated
in-service dates; success of hedging activities; operational
performance and reliability; regulatory and legislative decisions
and actions; public opinion; various events that could disrupt
operations, including severe weather, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; and the pandemic created by the outbreak of COVID-19
and resulting effects on CP's business, operating results, cash
flows and/or financial condition, as well as resulting effects on
economic conditions, the demand environment for logistics
requirements and energy prices, restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions, and
disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be
found in reports and filings by CP with Canadian and U.S.
securities regulators. Reference should be made to "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Statements" in CP's
annual and interim reports on Form 10-K and 10-Q. Due to the
interdependencies and correlation of these factors, as well as
other factors, the impact of any one assumption, risk or
uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
ABOUT CANADIAN PACIFIC
Canadian Pacific (TSX: CP) (NYSE: CP) is a transcontinental
railway in Canada and the United States with direct links to major
ports on the west and east coasts. CP provides North American
customers a competitive rail service with access to key markets in
every corner of the globe. CP is growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit www.cpr.ca to see the
rail advantages of CP. CP-IR
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SOURCE Canadian Pacific