Discussions could begin later this month between the Farmer Rail Car Coalition and the Saskatchewan government about future ownership of the province’s hopper cars.
The coalition anticipated buying the 950 cars in its 2002 business plan, said president Sinclair Harrison, but had to put the idea aside. The federal government asked the coalition not to negotiate with the province while it was discussing the purchase of Ottawa’s 12,000 cars.
“One was going to complicate the other,” Harrison said Jan. 4.
But the FRCC and Ottawa reached a deal in late November and just before Christmas, the coalition briefed transportation minister Eldon Lautermilch.
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The Saskatchewan minister said he expected negotiations to move ahead quickly.
“It’s fair to say that we haven’t made any kind of a final decision,” he said.
However, the province is interested in anything that decreases farmers’ costs, he added.
The government bought 1,000 covered hopper cars in 1981 at a cost of about $55 million. About 50 have been destroyed since then.
“I see no philosophical reason to keep them,” Lautermilch said of those still in service.
The cars are being upgraded at facilities at Ogema and Rocanville, Sask.
Harrison said that might push the value of each car higher. The coalition is buying the federal cars on a lease-to-purchase arrangement.
Harrison said the province has supported the coalition since it began work 10 years ago and he expects that to be a factor in the negotiations.
“We have no source of revenue, starting up. We expect (the province) to be fair and reasonable.”
Lautermilch said cabinet will have to be comfortable with whatever financing arrangements are made. He said there are at least 25 years of service left in the cars.
An agreement could be made quickly, since the discussions involve a willing buyer and a willing seller.
“We don’t have any desire to be in the grain car business,” the minister added.
