Churchill, railway deal falls through

A tentative deal to sell the Hudson Bay Railway and the Port of Churchill in northern Manitoba has fallen through, according to the railway’s current owner.

In a July 3 news release, HBR officials said a previously announced deal to sell the railway and the port to an ownership group led by Fairfax Financial has fallen apart.

The railway and the ownership group have been unable to find common ground on key issues, HBR said.

“Over the past several months we have been working with the consortium to finalize the sale of the HBR,” the company news release stated.

“Despite our best efforts to find common ground on certain key issues, it now appears that this transaction has fallen apart and that a sale … to this group may not be possible.”

HBR, a subsidiary of Denver-based OmniTrax, said the failure to reach a deal is “unexpected and very unfortunate.”

The company will “continue to pursue any and all opportunities to sell the HBR and related assets … as expeditiously as possible,” it added.

Company officials said they recently initiated a process aimed at repairing the damaged line, which runs from The Pas, Man., to the Port of Churchill.

HBR launched a request for proposals process through its engineering firm, AECOM.

However, railway officials repeated earlier claims suggesting that HBR is not in a position to fund the repairs by itself.

Early estimates suggest repair work on a portion of the line north Gillam, Man., could cost $40 to $60 million.

The company added that recent developments may jeopardize the opening of the rail line this season.

“As we have previously stated, we are not in a position to fund the entirety of the repairs to the HBR in the absence of a sale agreement,” HBR said.

“(We) will provide further updates on the sale process as events warrant. “

Mackenzie Radan, press secretary for Natural Resources Minister Jim Carr, said Ottawa understands the importance of the rail line to the people of northern Manitoba and shares their concerns.

“The government of Canada has always been ready and willing to be a major partner in this project, and we will find a way forward that will deliver a solution. Conversations are ongoing,” Radan said in a July 4 email.

The Hudson Bay Railway has been closed since May 2017 when severe flooding damaged the track and cut off rail access to several northern Manitoba communities.

In September 2017, the federal government appointed Wayne Wouters as Ottawa’s chief negotiator, charged with identifying a new ownership group and restoring service on the rail line.

Last month, Ottawa announced that Wouters had facilitated a deal-in-principle to sell the railway and port to a group led by Fairfax Financial Holdings, AGT Food and Ingredients, Missinippi Rail Ltd. Partnership and OneNorth.

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