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11/28/2005



Rail News: Rail Industry Trends

Canadian government to lease 12,000 grain hoppers to farmer coalition



Last week, Transport Canada announced it agreed to lease 12,000 grain hoppers to the Farmer Rail Car Coalition for five years and sign-off on a permanent transfer after the lease expires. The transfer price would be $205 million, comprising $65 million in lease payments during the five years, a $35 million credit for car overhauls performed by the coalition and a final $105 million payment to be spread over an eight-year period.

Transport Canada plans to finalize the lease-purchase agreement next year after the coalition obtains car-use contracts from Canadian National Railway Co. and Canadian Pacific Railway. In 2002, the coalition — which includes members from western grain producers, agricultural associations and rural government organizations — submitted a proposal to the Canadian government seeking to acquire the hoppers.

“This lease-purchase arrangement effectively balances the interests of producers with those of the industry and taxpayers,” said Canadian Transport Minister Jean Lapierre in a prepared statement.


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