Train engine being hoisted onto the cargo ship at the Churchill Port. Katie de Meulles photo.
The Port of Churchill is minus one prospective suitor for possible acquisition. The group, iChurchill and a First Nations consortium led by Glenn Hudson, Peguis First Nations Chief has withdrawn from bidding on the Port and the Hudson Bay Line.
“We are disappointed to have put so much time, effort and money into what would have been a timely solution for the people of Churchill and the economy of Western Canada, but we have apparently run up against politics,” said Louis Dufresne , CEO of iChurchill,
“We finally met last week with the government of Canada’s negotiator on the file, Mr. Wayne Wouters, and he made it clear that the government is willing to deal only with one specific company, a Toronto-based financial firm. We can’t understand why this is, given that our partnership meets all of the government’s stated criteria to support the restoration of rail service to Churchill.”
Churchill’s mayor Mike Spence and town council said iChurchill had previously announced that they were still negotiating with Omnitrax and the Canadian government to try and reach an agreement on the sale.
Now, iChurchill states that the federal government is catering to one exclusive buyer and will only offer financial assistance for track repairs to the Hudson Bay Railway for that group exclusively. Trains have not run to Churchill since last May and it appears that the hopes of starting the repairs this summer are fading again.
“Our team believes that these assets can be operated profitably,” said Dufresne. “My head cares about the commercial interests. But my heart is with the people of Churchill and the First Nations of Northern Manitoba. It’s been a year since a flood washed out their only land link to the rest of the country. I hope they can get their railway back online this year, but without a change in position on the part of the federal government, I’m not optimistic.”
We will have to wait and see what other potential buyers and investors arise in the near future.
Port of Churchill grain shipping operation on the Churchill River. Port of Churchill photo.
Just when you thought the Port of Churchill and accompanying Hudson Bay Line were in a negotiated sale…again…another potential suitor has arisen to acquire the assets and begin shipping from the port.
Executives from Herun Group Co. Ltd., a Chinese company with massive agricultural interests as well as a wealth of port-operating experience, visited Churchill a month ago to gather more information and inspect the port facility. The company is one of the largest firms in China and seemingly has the financial clout and long-term experience in the shipping industry to offer a long-term solution to keeping the port and train line open.
Concerns that the Port of Churchill would fall into foreign hands and their primary interests would be alleviated by an agreement with the Manitoba Metis Federation and thus have that group own 51 percent of the company. Herun has also agreed to pay the $20 million price to Omnitrax without relying on any additional support from the Canadian government according to Manitoba Metis Federation president David Chartrand.
“Herun made it very clear they’re prepared to come up with a substantial amount of cash,” he said.
Herun owns and operates 11 international ports and recently closed a deal to acquire a port in Brazil, the country China trades the most with. Since Herun also processes various grains and oilseeds, interest in Churchill’s port facility is paramount.
“To me, in order to make this situation work for the railroad and Port of Churchill, you really need to have a company that is in the business,” said Joe Ng, chairman of JNE Group of professional engineers based out of Hamilton, which arranged the tour.
Port of Churchill. Claude Daudet photo.
“Otherwise, new people come in and after two years they can’t utilize the rail and port and they bail out.”
Herun’s interest stems from the fact that it imports raw materials such as soybeans and canola for its China crushing facilities.
Missinippi Rail and One North, a consortium of First Nations and Toronto-based Fairfax Financial Holdings Inc. are also in partnership to purchase the facilities. Omnitrax and Ottawa have been in negotiations with each other since late last year.
However, Omnitrax Canada President, Merv Tweed, reported that the latter group has only signed a letter of intent and Omnitrax has received inquiries from several other Canadian companies. “We are continuing discussions with a number of interested parties,” Tweed said.
A most recent inquiry and potential buyer, another First Nations group named iChurchill, appeared this past week with a comprehensive proposal that includes utilizing Churchill’s port and rail line to ship wood and possibly oil in addition to grain.
Ng conceded Herun is not first in line with their new proposal. “We’ve come in late so we have to wait until other people finish talking. It’s no different than a lineup at a counter,” said Ng, the 2016 winner of Entrepreneur of the Year awarded by the Association of Chinese Canadian Entrepreneurs.
Any new deal with the prospective buyers would include the damaged rail lines, as well as some buildings and land and in other northern towns like Gillam. The estimated $46 million in track repairs would be covered by the company that ends up purchasing the facilities. The governments annual $5 million in maintenance payments currently paid to Omnitrax would continue with the new owner.
Even though Churchill has a pretty short shipping season, Herun is looking ahead to the future according to Ng. “As far as they’re concerned, the world’s turning warmer every year, and there might be longer and longer shipping seasons as years go by,” he said.
The Port of Churchill has been a symbol of uncertainty in Churchill. Katie de Meulles photo.
A Manitoba First Nations group has formed a partnership with an independent company to establish the reopening of the rail line to Churchill and potential operation of the grain port in Churchill.
Heard that before? Well, this time we might be in for the real thing.
A recent press release confirms that a consortium of Manitoba First Nations, led by Peguis First Nation Chief Glenn Hudson, will partner with iChurchill Inc., a private Canadian company, entering into an acquisition agreement with Denver-based Omnitrax, to take over control of the Port of Churchill and the Hudson Bay Railway.
“The port has got all of the grain handling equipment and simply said, the first thing we want to do is resume that commercial activity,” said Louis Dufresne, president of iChurchill Inc., in a phone interview Friday.
Northern residents of the town of Churchill along with Indigenous leaders say the railway and port are crucial to the existence of towns and all First Nations in northern Manitoba.
Last May, a year ago, the Hudson Bay rail line owned by Denver-based Omnitrax sustained flood damage from the spring melt of two late-season blizzards. The damage was estimated at nearly $60 million and Omnitrax balked at its contract to repair the damage and therefore reopen the train line to Churchill. Soon after, a native group under the name Missinippi Rail LP, a consortium of about 15 Manitoba First Nations, signed an informal agreement to purchase the port and rail line for $20 million. Further strengthening their offer and position, the group enhanced their buying power by joining with One North, a group representing First Nations and communities served by the Hudson Bay line.
Photo by Major MacLachlan (www.zambonista.com/hbr/) [Public domain], via Wikimedia Commons
With that deal seemingly dormant and not gaining any momentum, this new one is being praised by Manitoba Premier Brian Pallister.
“Hopeful always when I hear these announcements, but of course like the people of Churchill, I just really would like to see the rail line rebuilt and the port reopened with solid commitments with whoever is going to take charge of the ownership that they are committed for the longer term.”
Now, iChurchill Inc. is hoping to formalize and seal the agreement by mid-June in order to commence repairs and reopen the line in time for the fall polar bear season. These details have not been confirmed by Omnitrax as of yet,
Communities have been suffering for a year now with increased costs of transporting goods to the outlying towns in the north. The isolation has touched everyone’s lives in every community. With another end of this dilemma in sight, people have been given hope once again.
iChurchill Inc. is expected to release more information today regarding plans for repairing the rail line and potential reopening of the port at a Winnipeg press conference.
Any new agreement would need approval from the federal government. Federal Natural Resources Minister Jim Carr is expected to release a statement Friday.