Tuesday, September 05, 2017

Canadian government “formally demanded” repair to Hudson Bay rail line

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One of the 31 washouts caused by high water on the Hudson Bay Rail Line. One of the 31 washouts caused by high water on the Hudson Bay Rail Line. OmniTRAX

The government of Canada has "formally demanded" that the Hudson Bay Railway Company honor a 2008 agreement and repair tracks between Amery and Churchill, Manitoba.

The line between Amery and Churchill has not been operable since May 23 when high water made the track impassable. OmniTRAX, which owns HBR, conducted a full damage assessment and said the 200-year flood event will require between CA$20 million (US$16.18 million) and CA$60 million (US$48.55 million) to repair.

The Canadian government says it recognizes the important role the rail line plays in connecting communities in northern Manitoba and notes its top priorities are ensuring that goods and supplies are delivered through restored Hudson Bay rail line service to Churchill.

"The government shares the concerns of the citizens of Churchill and northern Manitoba, where the loss of the rail link has had significant impacts on businesses and families. We remain committed to the people of northern Manitoba and are currently exploring ways in which we can speed up the repairs of the rail line, while keeping in mind the immediate needs of the communities," said Canada's Minister for National Resources Jim Carr.

During a press conference detailing the damage in mid July, Peter Touesnard, chief commercial officer at OmniTRAX, recognized the importance of the rail line to the community, but said the high cost of required repairs were a concern.

"We want to be supportive, we recognize the importance [of the line], but we simply do not have the money," said Touesnard.

Canada believes OmniTRAX Inc. has a legal obligation to repair the rail line and its tracks. Canada says the its 2008 contribution agreement with Hudson Bay Railway requires the company "to operate, maintain and repair the entire Hudson Bay Railway Line in a diligent and timely manner until March 31, 2029."

The government also noted its willingness to look at all options, including exploring the possibility of working with a new owner toward the repair of the rail line and enforcing its rights under its agreement to seek repayment of the CA$18.8 million (US$15.21 million) contributed to the Hudson Bay Railway Line in 2008.

"To this end, senior government officials are engaging to find a solution on rail track repairs, ensuring a continuation of rail service for Churchill and surrounding communities," the government said in a release.

In what could be seen as a move to force OmniTRAX to repair of the line, Churchill Mayor Michael Spence issued a public notice Sept. 1 explaining that Manitoba Premier Brian Pallister made a provincial commitment of CA$500 million (US$404.55 million) over 10 years to the community of Churchill, but stipulated the funds were not to be used to repair the rail line and were dependent on the federal Canadian government solving the "rail and port situation."