Another short-line rail project is in the works in southern Saskatchewan
Gravelbourg Hodgeville Railway Inc. wants to buy the 86.5 kilometre stretch of Canadian Pacific Railway track running east from Hodgeville to Mossbank, where it hooks up with the CP Expanse subdivision and heads north to Moose Jaw.
The company is just starting discussions with CPR, according to Shelley Hirstwood, economic development officer for the town of Gravelbourg.
“The big issue right now is the clock is ticking,” she said.
“We have until May 1 to agree on a purchase price, then until July 1 to finalize financing and take possession.”
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She said May 1 might seem like a long ways away, but with so many issues to discuss, it’s really just around the corner.
GHR’s membership includes representatives from the towns of Gravelbourg and Hodgeville, five rural municipalities and four or five producers.
Louis Stringer, a retired lawyer and chair of GHR Inc., said he’s optimistic the group will be successful in its efforts to buy the line.
He said everyone he talks to about the project seems to be supportive.
“Just yesterday I spoke to a big local corporate farmer who is interested in the line for producer car loading,” he said.
“If we get a few big farmers involved, that will help drive interest among smaller producers.”
He said the group also has support from South West Terminal near Gull Lake, and Mission Terminal, which operates a 120,000-tonne capacity facility at Thunder Bay and handles 45 percent of producer cars shipped by prairie farmers.
He expects the selling price of the line to be $2.5 to $4.5 million, based on net salvage value, although that remains to be negotiated with CPR.
He said the company hopes to start by shipping 550 producer cars annually and then increase from there.
If everything goes according to plan, the line will be running as a short line in late 2011 or early 2012, said Stringer.
A spokesperson for CPR could not be reached for comment.
Hirstwood said GHR is looking for any kind of funding it can scrape together, including selling Class B shares for $2,000 apiece and making use of a provincial government program that offers interest-free loans for one-third of the value of the purchase price, with no principal repayments due for three years.
There are four producer-owned short-line railways south of the Trans-Canada Highway, with another one under negotiation between CPR and the RM of Souris Valley.
If that, and the GBH project, are successful, it will make six short lines in southern Saskatchewan.
“It’s going to be a busy couple of months,” said Stringer.
“I’ll be sticking close to my desk.”
