Rail line a gamble

Mar 4 • Feature Story, Viewpoint5 Comments on Rail line a gamble

Snow obscures the old CSX rail line in Chatham as it heads towards the Black Bridge. The 26-mile stretch of track from Chatham to just north of Wallaceburg has four potential buyers, but so far no one has signed a cheque.

Snow obscures the old CSX rail line in Chatham as it heads towards the Black Bridge.

You’ve got to know when to hold ‘em

Know when to fold ‘em

Know when to walk away

Know when to run

With apologies to Kenny Rogers, Chatham-Kent council could have been playing that song in the background as it made the controversial decision to buy the 26-mile stretch of railway between Chatham and Wallaceburg last week.

Council voted not to heed the recommendation of CAO Don Shropshire to let its option lapse and instead pay $3.6 million as apparently favoured by Economic Development Director Michael Burton, the lead on Chinese C-K investment.

Chatham Mazda from Chatham Voice on Vimeo.

The major reason behind the move was to keep economic development options open, the biggest fish in that barrel being the Chinese fertilizer plant touted by Mayor Randy Hope for several years.

C-K officials have been working on the rail project since CSX declared the line redundant almost a decade ago. Staff did an outstanding job in successfully reducing the purchase price from more than $6 million through various appeals and legal manoeuvring.

The eight-to-six vote on council showed how conflicted the issue has become, with council veering between fiscal responsibility (the no increase budget just passed) and the need to invest in economic development.

Council’s action shows the mayor is not comfortable going to the Chinese and asking them to move now on the fertilizer plant but is unwilling or unable to admit the deal won’t get done.

Proponents say the keeping the line open means opportunity to land $1.7 billion in investment and hundreds of jobs.

The problem is we’ve heard the mayor’s comments before. He has a weak track record on high-profile initiatives such as the Korean investment he chased before he’d even taken office, the 12-storey Tower of Boutin which sits like an unfinished mausoleum in the heart of downtown Chatham, the 700 jobs promised in his election campaign and the like.

Having said that, the only thing we know for sure is that if we don’t ante up, we can’t win the game.

In the worst-case scenario, the municipality could sell the rails and gravel, reducing the cost to $2 million. We’re already in for $2 million in legal and other costs.

We might as well see the dealer’s final card.

Comments

comments

5 Responses to Rail line a gamble

  1. Ray Rogers says:

    Best thing to do with this line is rip up the rails and develop a trail.

  2. Larry Vellinga says:

    Jim, Everyone says we will recoup $1.2 million if we tear it up and sell for scrap. That's only the scrap value. Is someone riding in on a white horse to take it up for free? Speaking from experience, in most cases you barely break even when you consider equipment and labour costs to do the task. And the scrap in our case contains a lot of copper, aluminum and nickel which pays quite a premium to track steel.

  3. No we need to take the money from council and the mayor if it doesn't work. Bet if it was their own money they would think differently!!! We still want total transparency Mayor Hope!

  4. Michael Powell says:

    But we made it on the monopoly board….Nice job Randy

  5. Larry, council was told by administration that at least one company has already offered to remove the rails and pay the municipality $250 per ton for the steel. That company would cover the cost to remove the rails.
    So, worst case, the municipality gets $250 per ton, which equates to about $2.1 miliion, according to staff.
    Council also heard that 90%-95% of the rail is deemed reusable, upping the potential resale price for the track.

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