Two Saskatchewan short-line railways are wondering what lies ahead after they lose their grain elevators this summer.
Southern Rails Co-operative and Red Coat Road and Rail face uncertain futures after July 31, when Sask-atchewan Wheat Pool closes all four facilities along the two lines.
Paul Beingessner used to manage Southern Rails and is now a board member.
He said the board will hold meetings to discuss the short line’s fate.
“Six months ago (the pool was) saying Avonlea was safe for five years and Briercrest for three,” he said. “We thought we would have time to deal with it gradually.”
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Instead, both will close by July. A third pool elevator on the line, at Truax, closed last month.
“Realistically, I think we’ve got a year to 18 months,” Beingessner said. “I don’t think our demise is imminent but it certainly is possible.”
To the south, the Red Coat line that runs from Assiniboia to Pangman had elevators at Ogema and Pangman.
The pool had already closed them, but re-opened the elevators in 1999 after Red Coat purchased the line from CP Rail.
Red Coat spokesperson Lonny McKague said the short line had a five-year commitment from the pool.
“We’re 18 months into that agreement,” he said. “It was working quite well. The elevators were full, if not plugged. We were hoping for them to stay.”
The pool decided in November to close the facilities as part of its effort to reduce operating costs.
Beingessner said one option for both railways is to load more producer cars.
In the Truax area, people are loading about 30 a year already.
“People have been reluctant in this area to load cars because there was always the fear that it would hasten the closure of the elevator,” he said of Avonlea and Briercrest.
McKague said the Red Coat line needs 200 cars a year to break even.
“We have the capacity of moving 500 to 600 cars a year, providing grain volumes are there,” he said.
About 45 producer cars were loaded last year, and probably that many already this year. They could sustain the line but local farmers have to get on board.
“We do have some money in the bank,” McKague said. “But we don’t have a lot of cash reserve to carry us through a long dry spell.”
McKague said another short-line operator has expressed interest in purchasing Red Coat, and that is another option for the board.
“The board of directors isn’t going to sell or close down the line without the shareholders having the final word,” he said.
