A decision by the federal transportation agency to reject an Edmonton-based railway’s application to run grain-filled trains on track owned by Canadian National Railway is being greeted with relief by the national rail company.
CN welcomed the decision by the Canadian Transportation Agency to deny Ferroequus Railway Agency open access to CN’s lines between Camrose and Prince Rupert, B.C., saying it would have allowed Ferroequus to enter the rail business, not by investing in its own network, but by “cherry-picking” CN traffic through regulatory means.
The CTA majority decision, released last week, said that Ferroequus had not proven that granting them the running rights “would eliminate or alleviate any lack of adequate and effective competition.”
Running rights allow one railway to operate using the tracks and facilities of another railway, and can be voluntary agreements between two companies or imposed by the CTA in the public’s interest.
The CTA said that it believed the business plan presented by Ferroequus, which owns no rolling stock but was planning to lease cars to ship up to 800,000 tonnes of grain a year, was “overly optimistic”.
Ferroequus president Tom Payne said he would review the ruling.
But the head of the association which represents many Canadian short-line railway operators in Canada applauded the decision, saying a favourable ruling could have jeopardized the viability of their businesses.
“Each of these small railways has made significant investments to buy and improve their assets, and have successfully attracted new business to rail,” said Bill Rowat, president and CEO of the Railway Association of Canada.
Most of the independently owned short-line railways now operating in Canada were created over the past six years as CN and Canadian Pacific Railway sold or leased branch or feeder lines to concentrate on long-haul, high-volume mainline freight train operations.
