Exporter optimistic about future of Manitoba rail line

The head of a Regina-based pulse company says he’s optimistic rail service will be restored this fall to the Port of Churchill in northern Manitoba.

Murad Al Katib, president of AGT Food and Ingredients, said a deal to transfer ownership of the Hudson Bay Railway (HBR) and the Port of Churchill is close to being finalized.

Once that’s done, the line will be assessed to determine where repairs are needed, tenders will be awarded and critical repair work will be completed.

“We’ve got customary closing, due diligence and definitive agreements (to complete) so we’ll be working expeditiously — the Fairfax team — to make sure that we get that done. Repairs need to commence so we can get service restored to the communities,” Al Katib said.

“The goal is to get it (the rail line) assessed, award tenders and have (critical repair) … completed this fall …,” he added.

“There’s a desire to be able to ship grain out of there this fall but we’ll have to see if we can get our timelines aligned,” he added.

AGT is part of a new ownership group that’s hoping to acquire HBR, the Port of Churchill and related assets.

The Regina-based pulse processing and export company had annual revenues of $1.7 billion in 2017, according to the company’s financial statements.

Al-Katib would not say what the company’s ownership stake in the northern Manitoba railway and port will be.

“We haven’t disclosed that yet,” he said. “We’ll disclose that when everything is definitive.”

Others involved in the government-facilitated deal include Toronto-based investment company Fairfax Financial Holdings and Missinnipi Rail Partners, a consortium consisting of First Nations groups and other communities based in northern Manitoba and western Nunavut.

Fairfax has a $190 million stake in AGT.

It is also rumoured that the federal government will contribute to track repairs, although financial details of Ottawa’s involvement have yet to be disclosed.

Al Katib said AGT, which already has shortline railway holdings in Saskatchewan, was among the last commercial shippers to move grain the northern port.

AGT used the facility to ship a 30,000 tonne vessel of lentils to Turkey in 2016.

The following spring, a section of HBR track spanning more than 200 kilometres between Gillam, Man., and Churchill was deemed inoperable due to severe flooding damages.

The cost of repairs required to resume service has not been confirmed but a preliminary assessment conducted by an independent engineering firm said the HBR rail bed was washed away in 19 locations.

Visible damage was also observed on five rail bridges with another 30 bridges and 600 culverts requiring further assessment.

According to a agreement negotiated with the federal government, the current owner of the track, OmniTrax Canada, is contractually obligated to maintain and operate the northern railway route until 2029.

However, OmniTrax stated in 2017 that it was unwilling to pay for repairs and was instead looking to sell the assets.

In late 2017, Ottawa said it was launching legal action against OmniTrax for failure to honour the terms of the 2029 service contract.

For its part, AGT sees the resumption of rail service to Churchill as an “important part of a long-term grain transportation and logistics strategy” for the Western Canadian grain industry.

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