By Jenna Cocullo, Local Journalism Initiative
The Municipality of Chatham-Kent has recouped all but $118,241 for owning the contentious “railway to nowhere.”
An audit, conducted last June, revealed that the 100-per-cent municipally owned WDC (Wallaceburg-Dresden-Chatham) Rail operated at a loss in 2018 and 2019, meaning they did not profit off their sale to an unknown numbered company.
In 2006, the municipality committed to purchasing CSX railway that ran from Wallaceburg through Dresden to Chatham.
In 2013, council authorized the creation of a numbered company, 2351839 Ontario Ltd. which operates as WDC, to purchase the rail land and assets for $3.65 million.
Chatham-Kent loaned $4.87 million to WDC for the purchase and operating expenses and later sold it in 2019 for $5.2 million.
Chatham Coun. Michael Bondy, a strong voice against the initial purchase of the railway, described the whole situation as an embarrassment and was happy to finally be relieved of the land.
“It brought no benefit ever to the municipality. Nothing ever happened to it and it was a waste of time and money,” he said. “It’s really not great news to lose money, but it is better than maintaining it.”
Steven Brown, director of Budget and Performance Services, said that a significant portion of WDC’s overall operating expenses was tax and interest on the loan, which they paid back to the municipality.
The purchaser, a numbered company that goes by 2719545 Ontario Inc., has chosen to remain confidential, keeping council in the dark of their plans. However, should they choose to sell, council has the right of first refusal.
Brown said he expects that Chatham-Kent will hear more about the company’s concrete plans over the next 18 months.
Stuart McFadden, director of Economic Development, said he is happy with the municipality’s decision to keep the rail assets in place instead of ripping them out.
“The municipality stepping in set the table for this sale,” he said. “If they wouldn’t have made that decision, they wouldn’t be able to sell it to who they did and now there’s a chance to have a train operating there again one day.”
Brown said with the sale down, the municipality’s numbered company will seize to exist.
