29 August 2010

Tentative Deal Reached for Railway

The Glenboro water tower on Canadian Pacific's Glenboro subdivision - Date unknown Brian Switzer.

Rathwell Manitoba - Things are looking up for the River Hills Railway.
 
"We got a tentative deal with CP Rail. Now we're just in the process of designing the share offering we're going to use to raise the funds for it," River Hills president Harold Purkess said.
 
With Canadian Pacific Railway looking to close its Glenboro subdivision from Rathwell to Nesbitt, a group of farmers have been hard at work raising the capital to purchase the 100 kilometre stretch from the CPR.
 
Negotiations Began In 2009
 
Negotiations started in September 2009 and with the tentative deal now reached, Purkess said River Hills has until 28 Feb 2011 to make a $700,000 non-refundable deposit on the line. That represents 10 percent of the purchase price. The share offering, he added, will begin once harvest is finished by the end of October.
 
"Farmers are all too busy now to come to meetings and worry about stuff like this."
 
During the summer a series of meetings were scheduled for some of the communities along the stretch of rail.
 
Raising Money
 
The River Hills president said the amount of success the shortline will have in raising the money for the deposit will determine the ability to continue with the deal.
 
"So before we put that much money at risk, we got to be really confident to raise enough money and put the whole deal together."
 
Purkess added should the deposit be made both sides will have until 31 May 2011 to finalize the agreement. And he said interest so far has been very positive.
 
Although there are two Patterson elevators operating along the Rathwell to Nesbitt line at Cypress River and Holland, Purkess said there will be several producer loading stations. He said with farmers loading their own cars and not paying fees to an elevator company will translate into a savings, "in excess of $1,500 per car."
 
Purkess said the facilities will also provide shelter from bad weather when farmers are loading the cars.
 
Creating A Shortline
 
Last year Carman MLA Blaine Pedersen and Manitoba Agriculture, Food, and Rural Initiatives community development specialist Bob Wheeler set about organizing a meeting to float the idea of creating a shortline railway similar to the Boundary Trails Railway Company. That meeting was in Holland on 6 Aug 2009 with close to 100 people participating.
 
They heard advice from BTRC president Kevin Friesen lawyer, shortline railway expert Art Stacey of Rail West Management, and Paul Stow of Mission Terminals. Although invited, the CPR didn't send a representative.
 
However a CPR spokesperson said the number of railcars needed to go west of Rathwell to pick up grain was declining, from 133 cars in 2006 to 84 by 2008. Cars from Rathwell were taken to Winnipeg while from Nesbitt they were sent to the CPR's mainline near Brandon.
 
Purkess said the CPR will continue to do just that should River Hills acquire their line.
 
"CP will deliver the cars to Rathwell or Nesbitt. We have to pick them up there at the interchange point and deliver them to the loading sites along the line. Once they're loaded we have to deliver them back to either Rathwell or Nesbitt, which ever end of the line they designate as the interchange point."
 
The River Hills president said the company received $25,000 from the provincial government to help develop its feasibility study and business plan. And he said province and the federal government are receptive to idea of helping the shortline get off the ground.
 
Glen Hallick.