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Friday, June 04, 2010

Owen Sound, Ont., railway plan stalled for now

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Any prospect of bringing rail service back to Owen Sound, Ont., is still getting back on track well down the line, the Owen Sound Sun Times reports. While a north-south line linking Georgian Bay to Lake Ontario "remains the company's vision," progress by the Highland Companies toward that goal has been sidelined by processes sometimes beyond its control, Michael Daniher, the company's spokesman, said in an interview.

Highland reached an agreement to buy the Orangeville to Brampton railroad from the town of Orangeville two years ago but "the transaction hasn't closed," Daniher said. "The due diligence process is continuing."

Meanwhile, its interest in acquiring the former CP Rail corridor in Dufferin County which, in turn, could be linked to the former CP rail corridor that ends in Owen Sound and is owned by Grey County, got put on hold by a court case that pitted Dufferin County against Orangeville on a question of conflict of interest.

Warren Maycock, Orangeville's deputy-mayor and a member of Dufferin County council, said that the county received a legal opinion that the town shouldn't participate in any decisions about the rail corridor because of conflict of interest.

If Orangeville sells its rail line and the county allows Highland to lay rails and use the county-owned CP corridor, then Orangeville gets another $2 million from Highland, Maycock said. However, $750,000 of that would be owed to the county for the purchase 10 years ago of the Orangeville-Brampton line, he added.

The matter was decided in favor of the county when it first went to court. A subsequent appeal was heard in December and a ruling overturning the original decision came down about six weeks ago.

While the litigation was going on, discussions at the county over the rail corridor "were dormant," Maycock said. However, Dufferin's general government services committee, which Maycock now chairs, received an appraisal of the value of the corridor. The committee will take the report to the next county council meeting, scheduled for June 10.

"That, as a property matter, will be subject of closed discussions," Linda Dean, the chief administrative officer, said. Asked if there were municipalities in the county opposed to a return of rail service, Dean said: "We haven't had a vote on it yet so I wouldn't know that."

The Highland Companies -- "the operating and investment vehicle for a group of private investors based in Canada and the United States" according to the firm's website -- also owns 7,500 acres of land in Melancthon Township. It is hoping to get a license to extract aggregate from some 2,400 acres within that holding, Daniher said. The quarry operation, extracting high-quality Amabel dolostone, would a have a life measured in "decades," he said.

"Some of our critics have suggested that by stopping the restoration of the rail corridor, they could stop the application for a quarry. Well, that is not the case . . . While it would be economically and environmentally attractive to incorporate the rail option as part of the transportation mix . . . the plans for an application for a quarry would proceed regardless of what happens on the rail front," Daniher said.

Despite the interconnected web of interests, "each of its (Highland's) businesses stands on its own merits and no one activity depends on another," Daniher said.

Meanwhile, Orangeville has extended its agreement with Highland for the purchase of the town-owned rail line for another two years, Maycock said.

And while he would like to see the return of the rail service from Streetsville to Owen Sound "there's lots of time and lots of items that need to be resolved before anything happens" to get as far as Melancthon Township on the edge of Grey County, Maycock said.

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