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4/5/2001



Rail News: Rail Industry Trends

CN's western Canada grain-line proposals won't create competition or improve service, says OmniTRAX


Following Canadian National Railway Co.’s March 29 announcement that it plans to re-institute an abandonment moratorium on western Canada grain-dependent branch lines, OmniTRAX Inc. March 30 addressed the Class I’s efforts to thwart the short-line holding company’s open-access attempts.
OmniTRAX officials believe the branch-line abandonment moratorium won’t improve service on those lines, but is CN’s attempt to divert attention from OmniTRAX’s proposals."CN is correct in asserting that’s it time to look at a different approach to preserving the branch line network in western Canada," said OmniTRAX Chief Operating Officer Gary Rennick in a prepared statement. "However, their suggestions do nothing to address the fundamental requirement of creating competition in the system. Without an independent short-line operator providing competitive alternatives, the lines will remain at the whim of CN."
CN’s road relief and shipper tax credit proposal to the Canadian government — designed to lower shipper rates and divert 100 million tons of freight annually from trucks to rail — is nothing more than a subsidization of CN’s business model at the expense of the Canadian taxpayer, said Rennick, adding that the fuel tax rebate could contravene World Trade Organization and NAFTA provisions, and unlikely would receive favorable review.
"These CN-driven initiatives will do nothing to improve service to rural communities, producers and local industries as indicated by their track record over the past 15 years," said Rennick.
OmniTRAX plans to continue pursuing its CanRail West Inc. initiative to create a short line that would obtain running rights — pending Canadian Transportation Agency (CTA) approval — to CN’s and Canadian Pacific Railway’s western Canada grain lines.
The company also is seeking CTA approval to enable its Hudson Bay Railway Co. to obtain running rights on CN’s 1,500 grain-dependent track miles in Saskatchewan and Manitoba.


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