SASKATOON – A group supporting the port of Churchill has raised $800,000 to finance its bid to take over the rail line feeding the town and the port operations in the northern Manitoba community.
Now comes the tricky part; negotiating the purchase of the rail lines from CN Rail and the port facilities and grain terminal at Churchill from Transport Canada.
“It’s a complicated negotiation, there’s no question about it,” said John Jardine, a Winnipeg business person and secretary-treasurer of the newly incorporated Gateway Northern Transportation Systems Ltd.
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If all goes smoothly, he said, the company hopes to be operating the port and a regional rail line in time for the 1997 shipping season.
“Our thinking is if CN can get its head around this concept of a regional railway, then the deal is doable in short order, by Christmas maybe, and operational by March,” he said. Transport Canada, meanwhile, has said it wants to sell its assets at Churchill by March.
Lots of talking ahead
But a CN Rail spokesperson said a lot of negotiating will have to be done before that happens.
“There are some significant areas of difference,” said public affairs officer Jim Feeny.
The Gateway group recently announced the formal closing of its public offering memorandum, under which eight private sector investors contributed seed money to carry the company through the next few months of negotiations.
Jardine said investors could easily raise another $200,000 if necessary, and added the company is interested in finding a native group or a farm group to invest in the project and join the board of directors.
The company wants to buy from CN the rail line running from Churchill south through The Pas to Hudson Bay, Sask., along with a number of branch lines extending as far south as Yorkton, Sask.
Jardine described the negotiations with CN as difficult, largely because CN doesn’t seem to have a definitive strategy on how to divest itself of the lines.
“Money is not necessarily a stumbling block,” he said. “It’s more the huge change that is going on in the whole industry.”
The privatization of CN, the loss of the Crow and other rail subsidies and the new rules governing rail line abandonment and other regulatory changes in the Canada Transportation Act have combined to produce an atmosphere of uncertainty.
Most of the uncertainty centres on the profitable branch lines that go down into the heart of grain-producing country.
“Tomorrow they would sell us from The Pas north,” said Jardine. “They’re struggling with the concept of coming from The Pas down to Yorkton.”
Feeny confirmed that CN is not really interested in turning over any lines south of The Pas.
“It is a concern to us … from the point of view that we have customers on those lines and we have agreement and understandings and contracts with,” he said. “To turn them over to a third party, it becomes very complicated.”
Buy abandoned lines
In its three-year rail rationalization plan released last month, CN said it will abandon some of the lines that the Gateway group would like to buy, including the Arborfield and Chelan subdivisions in northeastern Saskatchewan.
That tightens the timetable for reaching an agreement, said Jardine, although he added he doesn’t think that will affect the outcome one way or the other.
Feeny said CN wants to move quickly on those lines on an individual basis, and they won’t necessarily be sold as part of a package to Gateway or any other group.
