The sale of the rail line across northern Manitoba is igniting fuses in that province as accusations of bad faith are leveled against
the governments and a national railway.
Following last month’s application by Gateway North Transportation Systems Ltd. to the Canadian Transportation Agency for an investigation into the sale of the Churchill rail line, the consortium has now filed a lawsuit against the parties. The sale was carried out by Canadian National and the federal and provincial governments.
Gateway charges that the rail company and the governments invited it to develop a plan to operate the line at a profit and make a proposal to purchase the line and the port facility. But the plan was then taken to open tender. Gateway suggests its proprietary information, provided to the sellers, was confidential and yet it was included in the tender package given to the successful bidder, the U.S. company Omnitax.
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CN, the federal government and the government of Manitoba all refused comment on the case, saying it is now before the courts.
The Winnipeg-based Gateway also alleges the sellers failed to provide the company with all of the necessary tendering information provided to other bidders and that CN failed to follow CTA rules in selling the line.
Gateway is seeking reimbursement for nearly $1 million in expenses, plus damages and legal costs.
“We tried to work this out with them but they are not willing to work with us on it. We feel we were railroaded by the railroad and the governments and now we’ll be going to court to get what we feel is owed to us,” said Gordon Peters, chair of Gateway.
The rail line stretches across Manitoba’s north from near the western border, where it serves several mines, to the port and grain terminal at Churchill on Hudson Bay.
