Friday, January 22, 2010

Big plans for Manitoba rail line

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A group of farmers from Rathwell, Man., Canada, and the surrounding area are hoping to purchase a shortline railway to keep their grain shipments on track, the Central Plains Herald Leader reports. Harold Purkess, a retired farmer from Holland, who is interim president of River Hills Railroad Inc., said the organization is made up of a group of farmers and interested individuals who are investing in the project and preserving their rail line.

He said he heard from Carman MLA Blaine Pedersen that Canadian Pacific Railway might be discontinuing its 100-kilometre (62-mile) rail line between Rathwell and Nesbitt, which runs parallel to Highway 2. The farmers decided they would rather purchase it than let it fall into disuse.

"Originally, it started early last August," said Purkess. "It was brought to our attention by our local MLA that a rail line was going to be put up for abandonment. Our local MAFRI (Manitoba Agriculture, Food and Rural Initiatives) rep Bob Wheeler, from the agriculture office in Treherne, and Blaine Pedersen, our MLA, organized a meeting in Holland in early August to bring us all up to date at a public meeting ....

"Then, (Darin) Bouchard, (a farmer) from Cypress River, and myself decided we would come forward and start to get a committee together to see if we couldn't buy this chunk of line and turn it into a shortline railroad. Both of us, we have taken the interest, because we feel it is an incredibly valuable asset to our community to have this rail line stay here."

He said each farmer that ships a carload of grain on the line could save a minimum C$1,000, rather than paying the charges to transport their grain through the local elevator. The group of 90 shareholders plans to use the shortline rail mainly for their grain shipments, but may also be able to use it for other commodities depending on what business opportunities arise. Purkess said there might also be a future use for sending canola if a bio-diesel plant opens.

They have invested roughly $300,000 in total for the project so far, with part of that going to complete a feasibility study on the project in October 2009 that showed the project looked to be a favorable investment. The farmers plan to make an offer for a down payment to purchase the short-line rail from CP Rail.

"We hope to have something (an offer) in place to give to CP Rail by mid-January," said Purkess.

CP Rail spokesman Kevin Hrysak said rail lines are assessed over a three-year period to determine whether they are still viable for the company to operate or should be abandoned, at which point CP will offer a section of track for sale, under the federal government's Canadian Transportation Act.

"There are no plans to abandon it at the moment or put the line up for sale," he said of the Rathwell track on Jan. 12. "It is an expression of interest from this group who made a play for that piece of track approached CP."

Hrysak said he was not able to give any details of the negotiation between the two parties as it is confidential.

"It is kind of outside the process, but we are entertaining the offer," he said. "I know that we are negotiating with them, but nothing has been decided on that now."

Hrysak said normally at this stage, CP would only sell the line for continuation of rail operations. He noted there does not appear to be any growth between Rathwell and Nesbitt, and instead CP is able to offer the rail service from Nesbitt to Souris and from Rathwell to Winnipeg.

 

"Because Nesbitt and Rathwell are between two high-producing elevators and we have access points," explained Hrysak. "A lot of stuff is either going east or west out of each of those locations and nothing in between the two. That was the reason for putting it on the three-year plan (for discontinuance)."

Hrysak said when a short-line rail is put up for sale, both the land and track is offered up for purchase.

"It will be up to the purchaser to maintain and operate, as well," said Hrysak.

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