Wednesday, August 26, 2009

Local producers buy Canadian shortline

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A group of local grain producers is playing a live game of monopoly, local newspapers report. However, it is taking the "Chance card" from the game by taking matters into its own hands. The members of the group will be the first Alberta independent co-op owners after coming up with the winning bid to purchase a rail line from Camrose to Alliance.

"We received the news on Aug. 17 that our bid to purchase the line has been accepted," said Reg Enright of Rosalind, spokesman for the newly formed Battle River Railway New Generation Co-op. "We will purchase the 51.5 miles of track and about 700 acres of land for $4.8 million."

The rail line has been in use by local farmers since 2003 as an alternative to shipping their own grain to the coast.

"This line has heavy 132-pound steel, which is as heavy as the main regular track lines," he said. "We outbid K and S Materials from Salt Lake City, the largest rail steel salvage company in North America. They wanted to salvage the track, but we were able to keep it operating. The steel is worth more than our bid, but we wanted it to ship grain and expand the volume to include shipping other goods.

"We want to expand the amount of business that we have on the line," he said. "We had 650 cars filled this year. This year the crops are down so it might be tough to match that next year, but we want to include other businesses and ship goods to keep it busy. During the peak time in 1994, according to the Canadian Grain Commission, 2,000 cars were shipped. We certainly have room to expand and grow."

The new railway co-op hopes to sell shares in the track by mid-September.

"We are going to open it up to both farmers and non-farmers. A producer meeting will occur in the fall to provide more details on how people can buy a piece of the rail line."

A major upgrade in the tracks was completed in 1988, so the track is still in good shape. Cars currently stop in Kelsey, Rosalind, Heisler, Forestburg, Galahad and Alliance, where grain producers fill them for shipment to Vancouver. There, they are loaded on to ships for shipment around the world. Most towns on the line have hoppers to fill and use prior to the arrival of the rail cars.

"Rail producer cars are a really important option so we don't have to rely on inland terminals," Enright said. "Owning the line means producers will have two days to load rather than one and will still be able to realize the $1,000 savings in elevation charges. It adds up over the years."

The old producer group using the line had 175 members, and more than 100 steady users.

"Right now we don't have $4.8 million, but selling shares will generate income," he said. "We want to make this an investment opportunity for a variety of people. We have share options from A to F. The tracks run through two counties and six towns, so the possibilities are there for us to grow a lot. Saskatchewan has 11 independent lines that work. We will have the first one in this province."

The membership group is expected to take full possession on Jan. 15, 2010.

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