Two Saskatchewan rail line groups have a date in court with the Canadian Transportation Agency, probably in February.
The two groups, both based in southern Saskatchewan, are taking the CTA to Federal Court in a dispute over the agency’s determination of net salvage value (NSV) of rail lines the groups want to buy from Canadian Pacific Railway.
They say the case could set an important precedent for other prairie groups looking to buy rail lines.
“We’re appealing against the CTA’s methodology of calculating the NSV,” said Glenn Pederson, spokesperson for a group that wants to operate a short line on 66 kilometres of track between Estevan and Tribune.
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The other group, Wey-West Rail, wants to buy 112 km of track from Bengough to Weyburn.
Both lines hook up with a CPR main line between Moose Jaw and the U.S. border.
The cases are being heard together because the issues are the same.
In both cases, the legal challenge is financed by the local rural municipalities that would buy the lines in question.
The CTA has declined to comment on the case while it is before the courts.
The case dates back to 2007 when, after being unable to agree on a purchase price with CPR, the groups asked the CTA to determine the net salvage value of the track, which would then form the basis of the selling price.
The agency determined the value to be $2.93 million for Bengough and $2.26 million for Estevan.
Neither group was happy with the outcome and eventually decided to take the agency to court.
They both argue that the CTA failed to take two significant factors into account when determining the net salvage value.
* A railway is required to pay the local government $10,000 a mile for three years after transferring ownership. The groups say that should be deducted from the NSV; the CTA says not.
- Local bylaws require the payment of compensation for reclamation of land on the rail right-of-way. Again, the groups say that should be deducted and the CTA says not.
