C-K getting some interest in operation of CSX line

0
927

0815csxweb

Municipal officials say there are companies who may be interested in running trains on the rail line Chatham-Kent will take over in just six weeks.

But even if an operator is found, the line will in all likelihood be shut down, at least for a time, when the municipality takes over the line Oct. 4.

At that time, Chatham-Kent takes ownership of 26 miles of CSX track from Chatham to just north of Wallaceburg, a deal that has been in the works for seven years.

Stuart McFadden, deputy director of economic development for the municipality, said five companies – Jackson Seeds, Farmers of North America, Lansing Trading Group, South West Agriculture Group and London Agriculture Commodities – rely on this line to ship product. If the line shuts permanently, he said as many as 60 jobs are at stake.

As well, local farmers could feel the revenue pinch, as their shipping costs to get their crops to market would likely rise.

As it stands, the line will be idled when the municipality takes possession in October, McFadden said, even if a new operator were found tomorrow.

“Even if we were to find someone, for them to get prepared and continue operations in such a short time period, it would be very difficult,” he said.

McFadden confirmed at least two short-line rail operators in the province have called the municipality to get more information.

The mandate from council is to find an operator at little or no cost to taxpayers.

As reported earlier this month in The Chatham Voice, one possible operator is Cando, a company the municipality had produce a business plan to operate the line. Last month, Cando handed it back to Chatham-Kent officials, saying it could do the job for $1 million a year. The cost would include insurance, routine maintenance on tracks and crossings, but not lifecycle expenses on major infrastructure, such as bridges.

Council had concerns over potential high bridge maintenance costs on the rail line.

“We’re looking at any and all options,” McFadden said. “We don’t want to give up on the people that are on the line. We’re trying to come up with a solution and do what makes sense.”

The municipality actually agreed to purchase the rail line in 2007, but for the past six years has been negotiating a purchase price with CSX. The federal government stepped in at one point and plopped a price tag on the line three times higher than what CSX was asking.

To help keep the cost in check, Chatham-Kent made a deal with Canadian Pacific, which will pay the municipality $3.2 million for the salvage right for the steel rails and railway ties.

CP will rip up the line if no operator can be found in a timely manner. The municipality estimates it has about a year to find an operator before CP takes action.

CP, according to municipal officials, is willing to lease or sell the line to an operator, if one can be found.

Comments

comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here