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9/6/2002



Rail News: Rail Industry Trends

De-regulation, not 'regulated poaching,' key to CN's competitive success, Tellier says


If Alberta's government were to adopt legislation based on Alberta Department of Transportation’s push for broader running-rights regulation, the pendulum would swing toward open access, potentially forcing Canadian National Railway Co. to open its track and customer base to rail competitors at regulated rates.


That's the domino effect CN President and Chief Executive Officer Paul Tellier outlined for regulators Sept. 5 during a speech before Calgary, Alberta's Chamber of Commerce.


"Westerners would not put up with this kind of regulated poaching in the oil industry," he said, according to a prepared statement. "But some in the agricultural community are willing to entertain the idea for transportation. Why? Because they have a long-standing grudge against railways."


Tellier believes the West has become competitive in the global marketplace largely because it has one of the world's best rail systems — a result of 15 years of rail de-regulation.


"In the 21st century, competition is not just a matter of whether a community is served by two railways, or a railway and a highway. Competition is global," he said. "And when shippers and their railways compete globally, there is no need to change the regulatory system to ensure competition locally."


Rail access agreements must be driven by commercial pacts with negotiated rates reflecting fixed costs, variable costs and a host railway's lost opportunities — not rates imposed by bureaucrats, said Tellier.


He believes de-regulation has been key to CN’s ability to offer competitive rates and services to a range of Alberta industries, including oil sands sulphur, petroleum coke by-products, coal and petrochemicals.


De-regulation is essential to CN’s growth plans, including the potential development of oil sands south of Fort McMurray, Alberta, said Tellier.


"CN would be interested in helping improve rail service to Fort McMurray" (in cooperation with short line partners Lakeland and Waterways Railway, and Athabasca Northern Railway), he said.


Contact Progressive Railroading editorial staff.

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