Canada’s only Arctic port with railway access will likely resume shipping grain by 2019, says an official representing one of port’s the new owners.
Murad Al-Katib, president of AGT Food and Ingredients, said repairs to the Hudson Bay Railway in northern Manitoba and the Port of Churchill are already underway.
However, it remains to be seen if those repairs will be completed before the onset of winter.
“Crews have already been deployed,” Al-Katib told The Western Producer in a Sept. 6 interview.
“We’ve hired Cando Rail and a company called Paradox Access Solutions to implement a repair and remediation solution and to get the (railway) washouts repaired as soon as possible.
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“But we are going to be racing against Mother Nature for this season, so I can’t predict the outcome yet. It will depend on what the fall and winter season (brings) in northern Manitoba.”
AGT is part of a new ownership group known as the Arctic Gateway Group Limited Partnership, which recently acquired the port, the Hudson Bay Railway and a marine tank farm from Denver-based OmniTrax Inc.
Other parties included in the new ownership group include First Nations investors, northern Manitoba communities and Fairfax Financial Holdings Inc., a Toronto-based investment company that had net earnings of $1.7 billion in 2017.
Ottawa is also invested in the deal, although government sources have declined to say how much Canadian taxpayers will pay to see the inoperable railway line repaired and the port re-opened.
Last week, the Globe and Mail cited a partner in the HBR deal as saying that Ottawa will provide “long-term financial aid,” although no dollar figures were released.
Government officials at Western Economic Diversification Canada declined to be interviewed last week.
Al-Katib said it remains to be seen how quickly grain shipments will resume at Churchill.
Over the long-term however, AGT sees the railway and the port as another viable export route that could take pressure off Canada’s other export terminals and enhance the country’s grain supply chain by offering alternative delivery and shipping opportunities for primary producers and grain handling companies.
“The grain season this year may or may not be an opportunity; we have to see how repairs go,” Al-Katib said.
“We’ll be really focusing on the fall of 2019.”
The Hudson Bay Railway has been inoperable since early 2017 when flooding washed out several sections of the track in an area between Gillam, Man., and Churchill.
OmniTrax said last year that it would pay for the repairs, but the company’s refusal to repair the line prompted Ottawa to launch legal actions against it.
A recent determination by the Canadian Transportation Agency says OmniTrax breached its level of service obligations by failing to resume service on the line within a reasonable period of time.
Both OmniTrax and its Canadian subsidiaries have been silent on repairs, the legal proceedings and the sale.
Previous estimates suggested that repairs to the damaged line would be $40 to $60 million.
Al Katib said the new ownership group has not released an estimate on repair costs.
Details of the federal government’s involvement are expected to be released in the future.
In the meantime, the new owners of the railway line and the port will be working as expeditiously as possible to restore service and repair the line, which serves as the only overland link between Churchill and the rest of Canada.
When the repairs are completed, the port and railway will handle a wide range of other dry bulk commodities, said Al-Katib.
“Our focus on this port will be for it to be a multi-commodity port,” he said.
“We’ll be looking at fertilizer. We’ll be looking at potash. We’ll be looking at things like cement and any other dry products that come in for Western Canada.”
In addition to becoming owners of the port and the railway, AGT and Fairfax will also operate the facilities under a 99-year operating agreement.
AGT, through its Mobil Grain group, will run the trains and manage logistics on the line.
Churchill mayor Michael Spence said news of the deal could not have come soon enough for the residents and businesses of Churchill.
The cost of living in Churchill has increased significantly since the line closed more than a year ago, and hundreds of people have moved away.
In some cases, the cost of groceries and other household items increased by 30 or 40 percent, he said.
At one point, the price of regular unleaded gasoline ballooned to more than $2.50 per litre, up from approximately $1.70 a litre before the railway’s closure.
“It was really tough on the community,” said Spence.
“In the school for instance … we went from about 220 students to about 160.
“There’s a bit of work to do. It’s going to take some time (to recover) … but the community is very excited. We’re feeling good again …Â (about) the future of our community.”
