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Group reaches deal for Churchill rail purchase, repair

Railway, port properties included, will be refurbished

After months of back-and-forth negotiations, the Hudson Bay Railway has been sold and repairs are underway.

A finalized deal has been reached between Omnitrax and a group of companies, named the Arctic Gateway Group Limited Partnership, to purchase the Hudson Bay Railway, the Hudson Bay Port Company and the Churchill Marine Tank Farm.

The purchasing group includes northern Manitoba-based groups Missinippi Rail and One North, Toronto-based investment firm Fairfax Financial Holdings and AGT Limited Partnership, a food and agriculture business based in Regina. The deal closed on Aug. 31, with repair work starting on Sept. 8.

One North consists of a group of First Nations and other communities in northern Manitoba and the Kivalliq region of Nunavut, including Flin Flon. The group approached communities in northern Manitoba in May, offering ownership stakes in the group. The City of Flin Flon voted to purchase three shares in One North, at an overall cost of three dollars, marking the first time in the community’s history that city administration had approved an agreement with a First Nations-led group.

Two companies, Brandon-based Cando Rail Services and Paradox Access Solutions from Acheson, Alta., have been enlisted to repair the line. Repair work has already begun on the line, with the companies involved pledging to have repairs finished in 60 days.

“We are proud to have been awarded the contract to repair the rail line and look forward to helping all of the communities impacted by the broken railway,” read a release from Paradox Access Solutions.

“It is our mission to help improve the quality of life for the people of northern Manitoba.”

“All efforts will be made to restore the rail service before winter 2018,” reads a federal government news release.

“In the meantime, the safety and security of residents remains Canada’s priority and current community support programs for food, fuel and economic development will remain in place until rail service resumes.”

Passenger and freight rail service to Churchill has been on hold since May 2017, when overland flooding damaged several areas of the rail line between Churchill and Gillam, even washing out the track’s foundations in some spots. The railway is the only land transport link for Churchill – since the shutdown, the community has only been reachable by air.

Over the past 16 months, Omnitrax refused to return the rail line to service or repair it, citing concerns with repair costs and saying the line would cost between $40 million and $60 million to fully fix. A July ruling by the Canadian Transportation Agency ruled that Omnitrax would have to either repair or fix the line.

The deal could not only allow a resuming of land transport to Churchill – it may also serve as a jumpstart for the now-dormant Port of Churchill. The port, which was acquired by Arctic Gateway Group in the deal, was formerly used to load and unload grain, cargo and bulk commodities and was historically used as a hub for international grain transport from the prairies.

The port was shut down, along with major freight rail operations, in 2016.

In a federal government news release, Arctic Gateway Group director Paul Rivett said plans to regenerate operations at the port are part of the group’s overall plans.

“Phase one of the project will be to repair the rail line, undertake safety and rehabilitation upgrades to the Port and the Railway assets. We will commence the repairs and do all we can to restore service expeditiously and safely,” he said. “We are racing against time. We will immediately begin our work to make the broader project also a reality.”

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