Local taxpayers are paying $3,000 each week that Chatham-Kent council refuses to sell assets of WDC Rail and Coun. Michael Bondy doesn’t understand why.
“What we’re doing is spending the equivalent of my annual property taxes each and every week on this. We might as well take the money out and burn it for all the good we’re getting for it,” he said. “No one outside of council and staff think it’s a good idea to hold onto this.”
By a 10-6 vote, council rejected Bondy’s motion last week to sell assets of the 42-kilometer long railway running between Wallaceburg, Dresden and Chatham.
Council formed WDC Rail to hold the assets of the line, which it bought from CSX Transportation. CXS notified the municipality that it was discontinuing rail service in 2006 and council acquired the line for $3.6 million in 2013.
C-K economic development officials have cited the line as a key factor in its pursuit of a world-class size fertilizer plant to be established in North Kent by a Chinese firm.
Bondy said interest on the loan to purchase the line and maintenance costs amount to $150,000 per year.
“We’ve been trying to sell this as a railway line for years,” he said. “No one wants it just as no one is going to build the fantasy fertilizer plant. Just because we made a bad deal doesn’t mean we shouldn’t get out of it.”
He said the track’s rail lines are in good shape and there will be some market for gravel and ties.
“Whatever we get from the sale will decrease the loan and our interest. It just makes economic sense.”
Bondy said he isn’t opposed to Chinese investment but believes the focus on one major deal may be hurting the municipality’s chances in the long run.
“It’s as if there’s a belief that we need a big, shiny project to justify the time and expense of the trips to China,” he said. “I’d love to see the billions from this project just show up but we’re kidding ourselves. Let’s put our effort where it will do some good.”
Mayor Randy Hope has pegged the size of the fertilizer plant investment at more than $1.2 billion with tax revenue in the $2 to $3 million annual range.
Bondy said the fertilizer plant idea has always been a long shot.
“We need to convince the province to take 1,000 acres of prime agricultural land out of production, talk five adjacent farmers to all selling us our land and then battle with all of their neighbours who will likely go to the province to object. This is an OMB (Ontario Municipal Board) nightmare waiting to happen. If we get that far we have carbon tax issues to deal with,” he said.
If the fertilizer plant was such a good idea, Bondy said private railway operators would be more than eager to be involved.
“If there is money to be made, railways will be there,” he said. “The fact that no private industry is interested tells me a lot.”
North Kent councillor Joe Faas, who voted against the motion, said he opposed it because selling the railway is an irreversible option.
“Once it’s gone, it’s gone,” he said. “There will be no chance of re-establishing a line.”
He said the municipality needs to “keep our options open. I’d like it if we had agreements tomorrow but this is potentially such a big deal we need some patience.”
He said in addition to the rumoured fertilizer plant, other businesses could make use of the track. “Once we have a large, viable user more will follow.”
Bondy said he won’t be bringing the motion forward again until next year.
“In order to have council reconsider the motion, I’d need a two thirds majority and considering that the vote wasn’t close, there isn’t any point. I’m not happy to have to bring it back next year but unless a miracle happens, I’ll have to do that.”
Voting in favour of selling the railway assets were councillors David VanDamme, Steve Pinsonneault, Doug Sulman, Frank Vercouteren and Trevor Thompson.
Those opposing to selling were councillors Mark Authier, Bryon Fluker, Karen Herman, Joe Faas, Carmen McGregor, Darrin Canniff, Brock McGregor, Bob Myers, Derek Robertson and Mayor Randy Hope.
Councillor Jeff Wesley declared a conflict and Leon Leclair was absent.
What type of fertilizer will be produced ? Hopefully not petroleum based chemicals that will futher contaminate and pollute the earth while the rest of the world is trying to get rid of these carciogens.
You have customers who want to use rail but the WDC Rail has yet to find an operator. London Agricultural Commodities in Tupperville (LAC) has expanded their rail sidings only to have them sit unused and would use rail as soon as it becomes available.
Southwest AG in Eberts had recently (within 10-12 years) received cars of Fertilizer.
South West AG’s Wallaceburg facility (formerly Hazzards) was the last user of rail service receiving blocks of Cars from CSX as late as October 2013 – the last train picked up cars at their facility in Wallaceburg.
Serkka Farms just by Highway 40 also has a rail siding- have they been approached for potential rail service as they are on the WDC Rail owned section of the former CSX and own a siding.
There were other facilities in Wallaceburg using rail service in 2006 which still own rail sidings and would be great places to attract industrial tenants.
If you want to continue to attract industrial customers one has to make an investment in continued rail service and Chatham-Kent would be wise to re-start operations – revenues from existing rail customers would reduce the taxpayer burden and attract jobs and an increased taxpayer base for all of Chatham-Kent. The longer it sits idle, the more costly it will become. Unfortunately, the rail line is not immediately profitable – but what is the loss of taxpayer base if these agricultural facilities shut down and move where there is rail?
And if you do land a large industrial customer – such as the Fertilizer plant – or a Shell refinery – or similarly sized facility – you’ll have a very profitable and valuable rail line, not to mention jobs.
I’d think twice before discarding the rail line.
I also forgot to mention there is an industrial park in Dresden with a rail spur – lots of immediate potential there – the canners were known to use rail when good service was offered by rail providers. All of this is on the WDC Rail owned line.