Search for new rail operator will be 'expedited'

Stakeholders plan to work fast to find another operator for the Sault to Hearst passenger rail service.

That from Tom Dodds, Sault Economic Development Corporation CEO.

"I think what we've concluded, in light of the fact Railmark has been unable to proceed with the operation of passenger service between Sault Ste. Marie and Hearst, what we're going to do is resume our search for a third party operator," Dodds said, speaking to SooToday late Thursday.

Dodds also serves as ACR regional stakeholder passenger service working group interim chair.

It was announced Thursday the service will cease July 15 because Railmark Canada, which had been operating the service since May 1, was unable to obtain a line of credit.

"The difference (this time) is it will be expedited, and frankly the working group has learned a lot over the course of the last 18 months in this process, so we hope with the commitment from CN (which owns the rail infrastructure), and our commitment, it'll be expedited quickly and we can get an appropriate operator in a very, very short period of time."

Another third party operator would have to meet the same set of preconditions as laid out in an arrangement announced March 31 between Transport Canada, CN and the working group.

"The same preconditions that applied to Railmark would apply to this organization as well," Dodds said. 

"I think what we'll make a point of doing, with any candidate company that we would discuss with both CN and the working group, is to ensure that they have the experience, expertise, financial capability and appropriate approvals and authorities to operate in Canada."

Preconditions included financial ability of a third party operator to run the service, as well as other items such as certification to run a rail service in Canada and insurance.

Railmark was able to get certification and insurance, but was unable to obtain a line of credit, according to CN and the working group.

Dodds, as interim chair of the stakeholders working group, recommended to city council, at its June 22 meeting, not to sign a final agreement with Railmark because of the company's continued inability to obtain a line of credit equivalent to three months of operating expenses.

The city of Sault Ste. Marie, under an agreement announced by Transport Canada March 31, was placed in charge of transferring $5.3 million in federal funding over three years to a third party operator for the Sault to Hearst line, until the rail service became self-sustaining.

It is not yet known if Dodds will be making another appearance before council with an update at its Monday meeting.

After the federal government announced in 2014 it would be discontinuing $2.2 million in annual funding to CN to run the Sault to Hearst passenger service, a group of stakeholders, including the city of Sault Ste. Marie, formed a group to lobby the federal government for bridge funding while seeking a third party operator to run the service.

After months of work and lobbying from the group and Sault MP Bryan Hayes, an agreement was announced March 31 which brought Railmark into the picture. 

Meanwhile, members from the Coalition for Algoma Passenger Trains (CAPT) are calling on stakeholders to attend Monday's city council meeting to show their support for the Sault to Hearst passenger service.

"We are all very disappointed in the situation with the Algoma passenger train," wrote Al Errington, CAPT co-chair, in an email to SooToday Thursday.

"It has been very difficult the last few weeks since Railmark took over operations with an unpredictable and inconsistent schedule."

"The very foundation of the value of trains is reliability, yet after June 18 we have not been sure from day to day whether the passenger train would operate and where it would operate to," Errington's email reads.

"If Railmark cannot operate the Algoma passenger train service reliably, CN should support finding an effective operator to replace Railmark. There are others interested in operating the Algoma passenger train," Errington wrote.

Cottagers and tourist outfitters rely on the service.

Communities along the Sault to Hearst line receive over $38 million in economic and employment benefits from the Algoma passenger train annually and the government's financial support generates approximately three times that amount in taxes, CAPT said.

An economic impact study from BDO showed the service provides between $8.7 million and $12.8 million annually in tax revenue to all levels of government, along with 30 to 40 direct jobs, 55 to 170 indirect jobs and 290 to 430 "induced" jobs.

Thursday's developments do not affect the Agawa Canyon tour train.

The tour train continues to be run by CN.

FILE PHOTO