Needs more than farmer support
Source: The Valley Leader - By Glen Hallick
Published: August 14th 2009
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About 90 people, mostly farmers from between
Rathwell and Nesbitt, were presented with an
opportunity at a August 6 meeting in Holland.
With the Canadian Pacific Railway (CPR) listing the 101 kilometers of track between the two points for closure, a meeting was organized to guage any interest in setting up a shortline railway company.
“We can’t afford to lose it,” Carman MLA Blaine Pedersen said of the rail line.
The meeting was facilitated by Pedersen and Bob Wheeler from the Manitoba Agriculture, Food and Rural Initiatives (MAFRI) office in Treherne.
ADDED TO LIST OF CLOSURES
Shortly after being elected in 2007, Pedersen spoke with Wheeler about the particular stretch of railway and its future. Especially since the previous year the CPR added the line to its list of closures. More recently Pedersen and Wheeler met again and the two decided to be pro-active.
For the Holland meeting they invited Boundary Trails Railway Company (BRTC) president Kevin Friesen, Paul Stow from Mission Terminals and lawyer Art Stacey of Rail West Management. The three spoke of their experiences in setting up short line railways.
“It’s been a long process and we’re pretty proud of what we did,” Friesen said.
The BTRC began moving grain in June and its president said there are significant savings thanks to the railway.
“Every time a rail car travel down the line, $1,000 stays in the local community,” Friesen told the audience.
He also outlined the five steps a fledgling shortline company needs to follow. The first was dealing with a willing seller.
“Don’t let the next two years, three years go by. Do it before the abandonment process is over,” the BRTC president said. He then urged farmers to garner community support for the idea.
“Beware of the coffee shop talk, don’t let it be negative.”
As the third step, Friesen said farmers must also work together.
“Competition between farmers is over.”
He suggested farmers with their own shortline railway could see $30,000 to $50,000 added to their bottom line by co-operating together.
The fourth was to get government support. He stated the BTRC was very pleased with the assistance from the province.
“Show them you are leaders,” Friesen advised.
The final step was to hire a lawyer and giving him people to work with.
“The young farmers in this room, you need to sign on,” Friesen urged.
The gathering next heard from Paul Stow.
“One of the things [Mission Terminals] saw was the consolidation of the grain industry,” he said. “We decided to form working patnerships with producers and producer groups.”
RELATIVELY NEW TO WEST
Stow said that although Mission Terminals is relatively new to doing business in western Canada, the company has been in operation for about 75 years on the Great Lakes and Quebec.
“We will guarantee [your grain] at the port provided that those car that unload are representative of your samples,” Stow said.
He added that Mission Terminals invested in BTRC and two Saskatchewan based shortlines.
With producers cars, Stow pointed out the main saving is the elevation a farmer pays - about $13.50 per tonne.
“There is no elevation charge when you ship a producer car, that is your main savings,” Stow said. He added producers could not only save $1,000 per car, but perhaps as much as $1,800.
“We have been involved in numerous short line intiatives and the ones that succeed are farmer driven and have farmer support.”
Art Stacey, who has been involved in setting up four short line railways, spoke next.
“What a successful short line needs is not so much a lawyer, but a committed group of farmer-owners who are going to ship cars along the track. It’s just that simple,” the lawyer from Thompson Dorfman and Sweatman said.
DECIDED A GENERATION AGO
“The mainline railways decided a generation ago that they just couldn’t afford to be coming and picking up every car in every little town on every branch line in western Canada,” Stacey explained.
“I think the primary reason for that is there are very significant overhead costs and very significant labour costs.”
“The business model of the mainlines these days is they want to run big, long trains east and west. They don’t want to run a single train north and south if they didn’t have to,” he continued.
Stacey said the mainlines are often supportive of shortlines and the CPR is easier to deal with than the Canadian National Railway (CNR). He stressed a shortline company can’t be left to one or two people doing most of the organizing.
“There needs to be a leadership group. Raising money is then eaiser,” he stated.
“I think you have a willing seller,” Stacey said of the CPR.
He believes the CPR estimates the cost of the Rathwell to Nesbitt line of 45.4 kilogram type of track to be about $6 million. Because of the weight of the track Stacey cautioned the CPR could rip up the line and relay it elsewhere.
“CP doesn’t see a viable shortline between Nesbitt and Rathwell.”
Then Stacey offerred up a more aggressive possibility.
“An approach that would see a group come together and try to acquire the line, as I understand it, from [Souris] to Winnipeg. That’s an exceptionally aggressive plan in my opinion.”
“Ironically the line from Rathwell east could be got for less than the line between Rathwell and Nesbitt,” Stacey added.
He explained the CPR could be thinking that way because of scarce amount of traffic between Rathwell and Nesbitt.
“CP only thinks of what’s the value of steel to it. It doesn’t attribute a single dime to the traffic because it doesn’t think it’s going to get the traffic. On the other hand, if it believes a viable shortline could operate into Winnipeg and bring in all the traffic that it brings in itself off that line, you might well be able to make a deal,” Stacey said.
A CPR spokesperson previously told the Valley Leader only 84 cars were sent west of Rathwell last year, 49 fewer than when the railway announced its intention to close the stretch in 2006.
Stacey advised a steering committee be set up to formulate with a plan - be it the intended 101 kms or something longer.
In an August 10 interview Blaine Pedersen said there were a few farmers who expressed an interest in forming a shortline company.
“It was one of those meetings where [people] wanted to go home and think about this,” the Carman MLA said.
Also, he pointed out the CPR is parking train cars east of Nesbitt and that might account for the small number using the stretch of track.
“Trains go up to Holland, maybe Cypress River,” Pedersen said.
While taking only a facilitator role, he strong suggested action be pursued quickly.
“We need to do this in the next couple of weeks, to decide if anything is going to come of it.”
In the meantime Pedersen will investigate the actual amount of cars being sent down the line.