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5/5/2006



Rail News: Rail Industry Trends

Canadian government to retain ownership of grain hoppers



The Canadian government will remain a freight-car fleet owner. Yesterday, the Ministry of Transport, Infrastructure and Communities announced it will not pursue a permanent agreement to lease the government’s grain hopper fleet to the Farmer Rail Car Coalition (FRCC) and will retain ownership to “maximize benefits for farmers and taxpayers,” according to the agency.

In November 2005, the ministry reached an agreement-in-principle with the FRCC to lease the 12,100-car fleet for five years, then transfer ownership to the coalition. However, the parties failed to finalize a pact.

The House of Commons recently introduced Canada Transportation Act amendments that would enable the Canadian Transportation Agency to adjust maintenance costs in railroads’ grain revenue caps. The adjustment would apply to all hopper cars used in regulated grain service.

“The savings will allow farmers to see more profits in their business,” said Minister of Transport, Infrastructure and Communities Lawrence Cannon in a prepared statement.

Canadian National and Canadian Pacific railways use the hoppers at no cost to move grain from the western prairies to the ports of Vancouver and Prince Rupert, British Columbia, and Churchill, Manitoba. The Class Is retain day-to-day control of the cars and allocate hoppers to grain shippers.

The government receives annual alternate-use revenue from the railroads when the cars are not used in regulated grain service and for demurrage fees. Ministry officials plan to negotiate a new operating agreement and develop a new car refurbishment program with CN and CPR.


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