OmniTrax will consider offer to buy the 400 kilometre Hudson Bay Railway and Canada’s only deep water Arctic port
First Nations groups in northern Manitoba are interested in buying the Hudson Bay Railway and the Port of Churchill from OmniTrax Canada.
OmniTrax officials confirmed Dec. 18 that the company has accepted a letter of intent from an undisclosed number of northern Manitoba First Nations.
The company announced last month it was seeking a buyer for the railway and port assets.
OmniTrax and the First Nations will now enter a 45-day period to consider terms of the deal and perform due diligence before establishing a formal purchase agreement.
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
“Basically, a letter of intent has been signed by OmniTrax Canada and a group of northern First Nations communities,” Omnitrax president Merv Tweed said.
“We’ve set a time limit of 45 days for explorations and sharing of information and we hope this will culminate within those 45 days into a sale.”
Tweed did not say how many First Nations groups had signed the letter or how many were likely to be involved in the sale.
“I can tell you that it’s a growing number and that we’re not set on the final total at this point,” he said.
“We have 45 days to work out the details, and we’re hoping that at the end of the day, it will culminate in what I see as a historic moment and the sale of the railway to the people in the communities of northern Manitoba.”
Tweed said the Manitoba and federal governments have been informed of OmniTrax’s plans to reach a deal with First Nations buyers.
It is likely that both levels of government will play a role in facilitating the sale, should a deal be reached, he added.
The Hudson Bay Railway covers more than 400 kilometres from The Pas, Man., to the Port of Churchill on the shores of Hudson Bay.
The port is Canada’s only deep water Arctic port. Its assets include a grain export terminal that ships 500,000 tonnes of western Canadian grain during a normal shipping season.
Churchill’s shipping season normally runs from late July or early August through to late October or early November.
Grain volumes through the port were well below average in 2015 with total handlings estimated at less than 200,000 tonnes.
Tweed had earlier said reduced grain volumes in 2015 and high operating costs were the main factors behind the company’s decision to sell.
“After a period of time, we’ve come to realize that Hudson Bay Rail not only (serves Churchill) for grain … but it also serves a lot of communities along the rail line and … the costs of doing that just become unreal at times,” he said.
“We’ve built a lot of efficiencies into our operations and we’ve made a lot of changes for the positive, but we just think that it’s time that someone else maybe takes a chance and takes a look at it.”
