A proposal call to select a shortline operator will go out at the end of October with an assessment likely made by late January, said City of Sault Ste. Marie Chief Administrative Officer Joe Fratesi, who is chairing a special railroad working group of industry and community stakeholders.
"We have no guarantee that Huron Central will stay on past August of next year and we do, however, have an obligation to let (the railway) put its best foot forward on a long-term operation before we entertain other proposals."
Fratesi said this competitive bid process may be pre-empted if a good offer comes forward from the Huron Central. "If they come up with a (good) arrangement, they likely could be seen as a preferred carrier."
The city, Essar Steel Algoma, Domtar bought themselves a one-year reprieve last summer after striking a $15.9-million deal with the Montreal-based rail company to underwrite their operating costs until the agreement expires Aug. 15, 2010. The railway came within hours of dropping freight service to Sault Ste. Marie and Espanola. The two companies have also committed an undisclosed volume of freight.
Key to the deal is the flow of $33 million in government infrastructure money to repair badly deteriorating track that has slowed transit times for freight and undermines Sault Ste. Marie's efforts to attract container cargo traffic. Under government funding rules, Fratesi said there's no way all that money could be spent by March 2011, the date when these kinds of infrastructure stimulus projects must be completed. So only $12 million will be parceled out next spring for either the Huron Central or another railway operator to use. The rest of $21 million will be spent over the next few years in a second round of infrastructure funding.
The Northern Ontario Heritage Fund is providing an immediate boost of $1.5 million to help repair ties, rails and bridges on the track. FedNor has promised to match that money.
Fratesi said for the rail line to succeed, it's incumbent on North Shore communities to do their part to generate additional rail freight business.
"The fact that communities between the Sault and Sudbury realized the possibility of losing their rail line has woken up a sleeping giant for them to go out and promote new business (opportunities)."
Fratesi said there are new developments along the North Shore being talked about and those mayors and economic development officials must promote the use of rail to ensure its success and keep excess transport trucks from rumbling through their towns.
Canadian Pacific Railway, the owners of the line, said last summer they had no intention of taking over operations and were prepared to file for abandonment. Fratesi said during a September meeting in the Sault, CP officials were "impressed with what we were able to do and said that we have done everything that they could have expected us to do to turn their thinking around."
He added CP must be part of the framing of the proposal call because no carrier is going to come forward without its commitment to be part of a solution. To help with the proposal call, Fratesi said the city has also retained two lawyers who are experts in salvaging shortline railroads across Ontario.