OTTAWA – Government promises to reform grain transportation rules within the next few years means the railways soon will be able to prune their grain-dependent Prairie branch lines by hundreds of miles, a CP Rail official said last week.
Axel Conradi, general manager for grain movement at the railway, told a Commons committee that abandoning high-cost branch lines is a key requirement for railways.
“Railways must urgently rationalize over-capacity in the grain-dependent branch line network…,” he told MPs studying St. Lawrence Seaway issues June 16.
In a later interview, Conradi said he expects the government to simplify the rules for rail line abandonment to make the process easier.
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It would mean CP could apply to get rid of up to 1,200 km (750 miles) of grain-dependent lines, one quarter of its Prairie network, he said.
Conradi predicted the CNR could have a similar agenda.
“I think all the players – the government, the grain companies, farmers – realize that we have to get our costs down and make the system more efficient,” he said. ” Reducing the number of high cost branch lines is an important part of that. I think we will see that change within the next year or two.”
Denies suspicions
But Conradi denied what he said is a suspicion in some Prairie farm circles that the CPR would like to abandon everything but the money-making main line.
“Nothing could be further from the truth,” he said. “We see a pared back system but one in which we still have a substantial branch line network.”
Conradi also said the railways will have to win work rules concessions from their employees if they are to remain competitive.
Meanwhile, the Commons committee heard evidence that the railways are making headway in reducing costs.
The National Transportation Agency, which just completed a review of grain hauling costs as the basis for updating grain freight rate levels, told MPs the unit costs of moving grain are falling.
Part of it is the addition of the Roger’s Pass tunnel and more efficient grain handling facilities. There has also been a reduction in railway employee numbers, created by massive job losses in recent years.
Neil Thurston of the NTA said between 1984 and 1992, the cost of moving a tonne of grain one mile fell from $3.27 to $2.97.
