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11/1/2001



Rail News: Rail Industry Trends

Short line opts to test Western Canadian open-access waters one more time


Ferroequus Railway Co. Oct. 31 decided to give Western Canadian open access another try. The short line again submitted an application to Canadian Transportation Agency (CTA) seeking grain-hauling running rights over Canadian National Railway Co. track from Lloydminster, Saskatchewan, to Prince Rupert, British Columbia, and Camrose, Alberta, to Prince Rupert.


Ferroequus earlier this year sought CTA approval for running rights on nearly 1,350 miles of CN track from North Battleford, Saskatchewan, to Prince Rupert. CTA denied that application in May.


Ferroequus — which currently owns no track or grain-hauling assets — is a founding member of Association of Regional Railways (ARRC), formed Sept. 27 to seek changes to Canada's Transportation Act that would make it easier for regionals and short lines to access other railroads' track.


Other ARRC members are BC Rail Ltd. and OmniTRAX Inc.'s Hudson Bay Railway Co. and The Carleton Trail Railway.


Hudson Bay Railway earlier this year also applied for running rights to CN's 1,500 track miles in Saskatchewan and Manitoba, but CTA May 3 ruled that it wouldn't interpret Section 138 of the transportation act in a way that would enable the short line to haul grain and solicit customers along CN's track.


CN opposed both Ferroequus' and Hudson Bay Railway's applications, and, in counter moves carried out earlier this year, re-instituted an abandonment moratorium on its western Canadian grain-dependent branch lines, and proposed a road relief and shipper tax credit to the Canadian government, designed to lower shipper rates and divert 100 million tons of freight annually from trucks to rail.


CN also Oct. 19 reached an agreement with Prairie Alliance for the Future (PAFF), a non-profit organization spearheaded by Brotherhood of Maintenance of Way Employes that plans to create a cooperative of rail workers, unions, farmers and rural communities to operate 1,000 miles of CN grain lines in Manitoba and Saskatchewan. The long-term lease agreement would close Dec. 1 with PAFF beginning operations Jan. 3 on an Mantario/Conquest, Saskatchewan network.


PAFF would operate a low-cost grain network based on leased rail lines and hired-by-the-mile locomotives to move grain from local communities to CN’s mainline — a way for the Class I to stop operating the lines without causing damage to the communities that rely on the railroad.


Meanwhile, OmniTRAX officials are mulling over their open-access options and pushing the company's CanRail West Inc. initiative, designed to provide competing rail service to western Canadian grain shippers by accessing CN's and Canadian Pacific Railway's lines — either through Hudson Bay or Carleton Trail Railway, or both.


OmniTRAX — and ARRC — officials also will be closely watching the fate of Ferroequus's application, which CN likely will again oppose on the grounds that running rights agreements should be commercially negotiated between parties.


"If this application is successful, it will benefit an important part of the western economy and bring much needed competition to the railway industry," said ARRC President Bob Ballantyne in a prepared statement. "Commodity producers, and short lines and regionals will be waiting for the agency's decision with great interest."











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