9 February 2011

Last Train Out of Town

Rathwell Manitoba - With the fate of a significant portion of the rail line along Highway 2 in southern Manitoba about to be settled, I thought it a good time to question the relevance of what has been a part of our communities and our way of life for over 100 years.
 
The value of this asset is both known and unknown. Canadian Pacific has placed a dollar value on it based on their use as an international Class 1 carrier. The ratio of producer investment, debt, and government cash to acquire it as a shortline is unknown.
 
Considering other precedents it is safe to say the ultimate price borne by farmers will be substantially less than the amount CP is demanding. Already with the provincial tax incentives currently offered the true cost of the line has been potentially reduced by nearly $2 million.
 
Savings of $1,000 or more per producer car should be expected and are indeed being realized by those going this route.
 
If a conservative number of 500 cars move on the plus 60 miles of line a year (five unit trains), then that would be $500,000 more in the region every year than if the line was gone. With savings like that the line will have paid for itself in 20 years even with operating costs factored in. As well, an extra half million dollars in the region would have far reaching effects not only for producers.
 
Shipping by Truck Inefficient
 
If the line is lost, we do not know today what the future cost of that will be. We do know tomorrow will be different than today. We also know shipping by truck is markedly inefficient when compared to rail or barge.
 
In spite of all the change in the last 200 years rail remains the most efficient mode of land transportation by a wide margin. Price increases in fuel and other inputs are inevitable and will amplify this inefficiency.
 
The response to this will be either to adapt, provided the tools required are available, or to ask for help provided those in need are heard.
 
Retaining this rail line creates options for the region. As well, it encourages competition. Finally it places control into the hands of those working the land.
 
These all translate into the ability to make money and determine the future. These benefits are realized widely even if the line is not used by all simply by being there.
 
Not only is it savings, but the shortline is also the jobs running trains, loading cars, or fixing track. It is an opportunity for business transacted in town and traffic down Railway Avenue that used to be there.
 
If we demand the services and conveniences of a vibrant community such as a school, hospital, or hotel, it cannot be done by outsourcing our jobs and industry and ultimately also our money and people. The railway is a key piece of infrastructure required for developing industry and commerce locally.
 
Losing the line will cause unseen collateral damage. The viability of the farms and communities the line serves is directly related to the efforts made today to make strategic investments for both today and tomorrow.
 
Establishment of a shortline venture is a risk, a secured risk. Money put up is backed by the steel already put down. To lose everything steel would have to be worth nothing and useless for anything. The price of the line is its net salvage value, the price of the steel with the cost to tear it up already factored in. If this venture does not work the shortline can do what CP will do and cash out by salvaging the line. There is a margin of safety to the risk.
 
Decide the Fate
 
The board of directors of River Hills Railroad have researched, commissioned studies, incorporated, held meetings, raised funds, negotiated deals, received tax credits, and overall done what they could to save this line and illustrate its potential.
 
The time has now come for producers, businesses, community members, and government to decide the fate of what has been integral to these communities for over 100 years and only recently rendered irrelevant.
 
I believe this line is critical not as it is, but as it can be. This is the largest undertaking the region has seen in generations. The privilege of having a loading site in town is something that can be built back with the cost of facilities being a small fraction compared to the cost of the line. These facilities catering to the needs of the producers will undoubtedly follow once the future of the line becomes clear.
 
Rebuilding this line will be impossible once gone. It would cost 10 times to rebuild what already exists and can be bought today.
 
Having another gravel scar bisect the towns and farms of this province we call home is a certain reality unless something is done. This is a once in a lifetime opportunity unfolding along Highway 2.
 
In a month, once gone, it will be gone for good.
 
Len Green - Member of River Hills Railroad board of directors.