Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business [email protected].
The search is on for a new operator to take over a Sault Ste. Marie-to-Heart passenger train service after Canadian National Railway (CN) announced it will cease operations on July 15.
The repeated inability of Railmark Canada and its president-CEO R. Allen Brown to obtain financing led CN, the track’s owner, to finally terminate the service.
The same issue cropped up in June, forcing CN to step in and take back a popular sister service on the same line, the Agawa Canyon Tour Train excursion, from the hands of Railmark after a satisfactory agreement couldn’t be reached.
For the Sault Ste. Marie Economic Development Corporation (EDC) and a regional stakeholders group, it’s back to the drawing board with a full-out scramble to find a replacement operator during the height of the summer tourism season.
Sault Ste. Marie EDC CEO Tom Dodds said they’ll be meeting shortly with CN and Transport Canada – the providers of a $5-million/three-year rail subsidy – to decide on an immediate course of action and put out a “highly expedited” request for proposals process – for the second time in less than a year – to find a replacement operator.
“Our objective is to get a reputable operator on that line as fast as we can.”
He couldn’t put an approximate date when a replacement carrier will be in place.
Railmark Holdings was CN’s hand-picked choice in March to run the service after a request for proposals process was initiated last fall. CN had repeatedly made it clear it was not interested in running a passenger or excursion service.
But the Wixom, Mich. company, who bill themselves as specialists in railroad operations, track maintenance, freight logistics and railcar repair, has turned out to be a less than turn-key operator.
Despite Brown’s faith in his own ability to run both the passenger service and tour train, Dodds said his confidence in the Michigan businessman began to wane in recent weeks when he was unable to obtain a line of credit from any lending institution.
An earlier financing agreement Brown had arranged with lenders collapsed April 20, forcing him to start from scratch.
“We wanted to know that this guy had a line of credit or some working capital,” said Dodds. “There was no evidence of that.”
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By: Ian Ross