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12/3/2012 10:00:00 AM
Canadian Pacific: The latest on a PRB extension, police association pact and Regina intermodal facility
Canadian Pacific announced today it will take a fourth-quarter pre-tax, non-cash charge of about $180 million — or $107 million after taxes — on the railroad's option to build a line into the Powder River Basin (PRB).
When CP acquired the Dakota, Minnesota & Eastern Railroad Corp. in 2007, it also obtained an option to build a 260-mile track extension into PRB coal mines. Components of the fourth-quarter charge include the option, engineering design costs, land and capitalized interest.
The Class I plans to indefinitely defer the extension into PRB mines, "based on continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012," CP officials said in a prepared statement.
CP also announced on Friday that it reached a tentative five-year agreement with the Canadian Pacific Police Association (CPPA), which represents about 60 police service employees. The pact will be presented to CPPA members for a ratification vote.
"I am pleased we were able to reach agreement with our railway police, the third tentative agreement or ratified contract in a matter of weeks," said CP President and Chief Executive Officer E. Hunter Harrison.
On Nov. 15, the railroad reached a tentative five-year agreement with the International Brotherhood of Electrical Workers, and on Nov. 8, United Steelworkers members ratified a five-year contract.
Meanwhile, the province of Saskatchewan introduced a bill last week that would transfer control of the Global Transportation Hub's (GTH) development and operations from municipal to provincial jurisdiction, perhaps by summer 2013.
Since development of the hub began three years ago in Regina, the city has worked together with the province to advance the project.
GTH includes a new 300-acre CP intermodal facility that's scheduled to launch operations by year's end. The facility will increase capacity for container lifts from 40,000 to 250,000 annually, provincial officials said in a prepared statement.
"The new legislation will help transition the GTH into a full inland port operation to grow Saskatchewan's warehousing, transportation and logistics sectors," said Bill Boyd, a minister responsible for the GTH.