Tuesday, May 22, 2018

iChurchill pulls out of Hudson Bay Rail negotiations

Written by 

A consortium that expressed interest in purchasing the flood-damaged Hudson Bay Railway (HBR), the Port of Churchill and associated assets, has halted negotiations and cites the government of Canada's "unwillingness to engage in meaningful dialogue."

"We are disappointed to have put so much time, effort and money into what would have been a timely solution for the people of Churchill and the economy of western Canada, but we have apparently run up against politics," said iChurchill CEO Louis Dufresne. "We finally met last week with the government of Canada's negotiator on the file, Wayne Wouters, and he made it clear that the government is willing to deal only with one specific company, a Toronto-based financial firm. We can't understand why this is, given that our partnership meets all of the government's stated criteria to support the restoration of rail service to Churchill."

iChurchill, which was a relative new option to purchase the rail line and port assets, expressed concern that the "federal government appears set on working with only one specific company on this file." The company references statements by the government's representative in a recent meeting were reasonably understood by iChurchill to imply that the government of Canada would make a financial contribution to repairing the railway, but that such a contribution is only available to the financial firm at this time.

HBR owner, OmniTRAX Inc., entered into a Memorandum of Understanding in December 2016 with Missinippi Rail and One North on a potential sale of the Hudson Bay Rail line for a reported CA$20 million (US$16.18 million). In November 2017, a Toronto-based holding company, Fairfax Financial Holdings, had expressed interest in a partnership with Missinippi Rail and One North to buy the northern Manitoba rail and port infrastructure. The line has been out of service since late May 2017 when it was damaged by a flood event.

"The government appears to be picking sides in a commercial transaction regarding privately-held assets," iChurchill said in a statement.

iChurchill says it is well placed to undertake the repairs to the flood-damaged rail line during the summer of 2018 and to restore rail service as quickly as possible. The company also says it has incurred costs directly associated with initiating the repair process, even though the work cannot begin until the assets have legally changed hands.

"Our team believes that these assets can be operated profitably. My head cares about the commercial interests. But my heart is with the people of Churchill and the First Nations of northern Manitoba. It's been a year since a flood washed out their only land link to the rest of the country. I hope they can get their railway back on-line this year, but without a change in position on the part of the federal government, I'm not optimistic," said Dufresne.