Monday, September 11, 2017

Canada names negotiator, readies to step in to fix (or sell) HBR line to Churchill

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Canada names negotiator, readies to step in to fix (or sell) HBR line to Churchill OmniTRAX

Reiterating the importance of rail to the region, the government of Canada named a negotiator and said it is willing to explore interim funding options or potential sale of the Hudson Bay Rail Line in order to see service restored.

Canada Minister of Natural Resources Jim Carr issued a release late last week confirming "Canada's commitment to the residents of northern Manitoba and to the restoration of rail service to Churchill, Manitoba."

Wayne Wouters, who is currently strategic and policy advisor with McCarthy T├ętrault LLP, has been named as the government's chief negotiator to represent Canada's interests. Wouters will play a role in the ongoing discussions with OmniTrax Inc., interested buyers, community leaders, and the Province of Manitoba.

The line between Amery and Churchill has been inoperable since May 23 due to a 200-year flood event that requires between CA$20 million (US$16.18 million) and CA$60 million (US$48.55 million) in repairs. Last week, the government of Canada "formally demanded" that the Hudson Bay Railway Company, which is owned by OmniTRAX, honor a 2008 agreement and repair the tracks.

"The government is deeply concerned that OmniTRAX Inc. has not yet commenced repairs and that further delay may jeopardize the ability to complete repairs before winter," the release stated.

The government noted that it will look into transferring ownership of the line (and work with the new owner to restore rail service) should OmniTRAX not be able to make the needed repairs and providing that the following are met:

  • The assets are transferred at a reasonable price taking into account OmniTRAX Inc's obligations.
  • The new owner has support from First Nations and other communities along the route.
  • The new owner has a viable business plan to operate the rail line safely, reliably and cost-effectively.
  • The government will also engage with the Province of Manitoba as a partner in supporting service restoration and go-forward operations.

Canada is also willing to explore interim funding to enable restoration of rail service, should there be material progress on the conditions outline above.

"The government of Canada remains committed to the people of Churchill and Northern Manitoba and is ready to do its part to restore rail service. Time is of the essence here and quick action from all partners is needed now," said Minister Carr.