Omnitrax Can’t Fix Rail Line Alone

Hudson Bay Line washout

One of the Hudson Bay Line’s washouts between Gillam and Churchill. Omnitrax photo.

Omnitrax does not have the resources to repair the Hudson Bay Railway and is urging the Canadian Government to get involved to help get the trains running again according to Merv Tweed, President of the company’s Canada management team.

“We’ve said publicly that we believe the province and the federal government have to be involved in this. It is a natural disaster,” Omnitrax Canada president Mervin Tweed said Friday.

Omnitrax is claiming there are at least 24 track sections between Gillam and Churchill, Manitoba that were severely damaged during the spring thaw and floods. Given the complexity of accessing the tracks and the permafrost base they lay on, the company is forecasting spring 2018 as the earliest time the repairs will be completed.

Hudson Bay Rail line Churchill

Flooding has caused some of the Hudson Bay Rail line to be underwater. Omnitrax photo.

Omnitrax has conducted aerial photo surveillance revealing long stretches of water submerged tracks, culverts displaced and suspended tracks above the ground with water running under them. This type of damage will be difficult to repair with expediency and forethought for future flood damage.

The Canadian government has not committed to any help before knowing what the costs will be.

“I mean, they’re being cautious. It’s hard to do something until you know — like us — what it’s going to cost,” said Tweed.

Merv Tweed Omnitrax

Omnitrax-Canada President Merv Tweed says government needs to be involved in repairing the rail line. CBC photo.

The Hudson Bay Railway is a lifeline between Churchill and the south. Trains typically bring up everything from fresh groceries to propane gas for heating homes. as well as building materials and anything else needed by residents and businesses. Without this service the economy and lifestyle in Churchill will be drastically affected.

The assessment, including 300 kilometers of tracks, 28 bridges and 600 culverts is beginning this week will take four weeks to analyze the tracks and two more to provide a comprehensive report detailing the process of repairing the line.

Tweed estimates the cost will be far larger than what Omnitrax can afford for the project.

“We don’t believe we have the resources to rebuild what needs to be done,” said Tweed. “Every time we go out we find something else.”

A difficult job ahead for engineers includes walking along the tracks and checking the stability of the line as well as taking soil samples in order to determine ground conditions under the tracks.

“Just getting to that site is going to be a real challenge,” Tweed said.

The tundra north of Gillam is saturated and many areas are covered with water slow to be absorbed by the permafrost – covered ground.

In the meantime, while the track is unusable north of Gillam, a  plan to utilize both the Port of Churchill and the town’s airport is being assessed and put in place to cover the shipping deficiency.

Tweed stated that some port, owned by Omnitrax,  employees have returned to work in preparation for aiding with additional shipments.

“We were optimistic about a pretty good rail season until the water hit,” Tweed said.

Rival Northern Group Vying to Purchase Churchill Port

Port of Churchill Churchill, Manitoba

The Port of Churchill and Hudson Bay Railway are still up for sale by Omnitrax. Claude Daudet photo.

With negotiations between Omnitrax Canada and the Missinippi Rail Consortium, now down to just the Mathias First Nation, moving at the speed of a train on the last 100 miles to Churchill, another strong alliance has stepped up and expressed interest in acquiring the port and Hudson Bay Railway. Omnitrax does have a  memorandum of understanding to negotiate the sale of its assets with MRC though the negotiations have recently stalled.

The new alliance called One North has apparently gathered widespread representation from various First Nations of northern Manitoba and incorporated municipalities residing up and down the rail line. The Kivaliq region in Nunavut has also reportedly joined forces with the group as well.

“This is an unprecedented coalition of communities — indigenous and non-indigenous. There is a historical significance here. Never in the history of northern Manitoba have all these communities come together like this in a shared vision.” stated Christian Sinclair, chief of Opaskwayak Cree Nation, and one of the key organizers of One North.

So far around 20 communities have joined forces with One North, including The Pas   and the City of Thompson, two key, large communities on the rail line as well as all the First Nation communities served by the Hudson Bay Railway including Fox Lake, War Lake and York Factory. Many of these groups have rescinded their support letters from a year ago backing the Missinippi Rail Consortium run by Chief Arlen Dumas of Mathias Colomb First Nation and redirected them to One North Coalition.

The group has come together to not only purchase the assets of Omnitrax Canada and run the rail line and Port of Churchill but also facilitate a long term broader plan for the north and its people.

Churchill mayor Mike Spence has co-led the effort with Sinclair..

“We have a real issue here. We need to rectify it. We are putting together a model that will sustain these communities for a long, long time.” Spence said.

Omnitrax Canada place the port, rail line and assets up for sale in December 2015.  Omnitrax president Merv Tweed at that time announced the company wanted to sell its Manitoba assets and was confident the company would have a deal in place before the end of 2015. That didn’t happen.

Dumas and Omnitrax entered into negotiations in January 2016 and although initial meetings seemed to imply a done deal, nothing has seemed to progress further.

When July came around, Omnitrax shocked the community of Churchill by laying off nearly 100 port workers and abruptly closed the doors to the port and cancelled the entire shipping season. No deal with with Dumas and his group was finalized.

Dumas and Omnitrax officials claim that talks are progressing well and that a deal is imminent though no recent news has surfaced on the deal. Omnitrax officials have not been available for comment on negotiations. When reached, Dumas had no awareness of One North’s interests. He did give away a little of his hand by stating; “Well, ask them to give me a call if they want to buy the assets and the interest off us.”

Sinclair admits One North is still trying to get an audience with Omnitrax. They currently have no official standing with the company and have only assembled a team with some technical expertise including Paul Power, an international railway specialist who was a founding director of the Keewatin Railway Company, and Marv Tiller, the original CEO of the North West Company who has had a long career assisting First Nations in successful economic development projects.

“We think Omnitrax does not want to talk to us because they want to get a management contract from the buyer, Missinippi Rail Consortium, so they can make $10 to $15 million advising and managing and have someone else take on the risk as well as cash out on all the government money that has been sunk into the line.” stated Power.

One North has made it clear to the government the direction they are wanting to go in and have met with Cliff Cullen, Manitoba’s minister of growth, enterprise and trade as well as Natural Resources Minister Jim Carr and the Manitoba caucus in Ottawa. Modest funding has been received from the $4.6-million Churchill and Region Economic Development Fund, established in September by the federal government though the group has been primarily self-funded to date.

“The federal government is fully aware of where we want to go,” Mayor Spence said. “They have indicated to us that they like the model, they like where we are going. It plays into what the government wants to do to develop a new strategic plan.”

Omitrax Hit With Arson in The Pas

The Pas arson

Railroad ties owned by Omnitrax in the Pas were destroyed by arson. RCMP photo.

A $5,000 reward is being offered by Omnitrax Canada for information that helps locate an arsonist that destroyed about $1 million worth of railroad ties that were to be used this summer on the Hudson Bay rail – line.

Fire lit up the sky around 5:30 a.m. in The Pas Monday morning from the Hudson Bay Railway yard. With relations strained between local residents and Omnitrax due to their recent abandonment of the Port of Churchill, communities all along the Hudson Bay rail-line are running high on emotions.

Omnitrax will offer the bounty to someone who can supply information leading to both an arrest and conviction of the person or people responsible for the fire. Fortunately, no people were injured during the blaze.

“We are very troubled by this terrible act,” Omnitrax Canada president Merv Tweed said in a release.

The company has set up a tip line at 204-947-0033. The local RCMP number is 204-627-6204.

Churchill Port Sale Agreement Sealed

Port of Churchill Churchill, Manitoba

The Port of Churchill sale expected to go through soon. Port of Churchill photo.

Current Port of Churchill owners OmniTrax Canada and a group of northern Manitoba First Nations, known as the Missinippi Rail Consortium, have finally agreed to seal the deal that will hopefully get the facility running again.

This agreement will allow the First Nations Consortium to begin lining up customers and vendors ahead of the 2017 grain season so to insure a smooth transition in bringing the port back up to par.

In a press release statement from omnitrax the company stated, “This step was taken after a year of due diligence and the signal from the consortium that it intends to move forward,” Omnitax has owned and operated the port and rail line since 1997.

“We are grateful that OmniTrax Canada believes in our process and our people and is willing to get started now,” said Chief Arlen Dumas of the Mathias Colomb First Nation, which has led the consortium.

“Ensuring First Nations ownership in these assets is a vital part of ensuring long-term viability in the north. Now we need the government of Canada to complete their review so that this process can be concluded as soon as possible.”

“It is a pleasure working with Chief Dumas. The chief’s leadership, consideration and thoughtfulness have allowed us to ensure a great home for these assets with the Manitoba northern First Nations,” said Merv Tweed, OmniTRAX Canada president.

“He has taken bold steps to prove his commitment to the transaction and we are eager to see it come to fruition in the coming months.”

port-claude-daudet

This past July OmniTrax announced that the port was closing much to the surprise of Churchill townspeople and government officials. Layoff notices followed almost immediately to the roughly one in 10 Churchill residents employed at the port and the accusations began to fly. Municipal leaders, politicians and organizations representing agricultural producers all spoke out against the shut down and called for the reopening of the port. It didn’t happen but perhaps the local ownership will prove to be the answer to the problem.

Port of Churchill up for Sale

Port of Churchill,MB

The Port of Churchill, MB. Photo: Steve Selden

The Port of Churchill and the Hudson Bay Railway are being put up for sale by Denver based Omnitrax owned by the Broe Group. Both the Hudson Bay line from the Pas to Churchill and the port are being sold together as a package deal.

Prior to 1997 the Government of Canada owned the Port but then divested many of their crown holdings and sold the facility to US based Omnitrax. Because the Canadian National Railway had also been privatized, the line between Churchill and the Pas was also sold to the company.

While the sale announcement has been kept low key the news is now out and potential suitors have yet to come forward.

After anticipating a surge in shipping from the port, years of average growth and a decline this year in the grain shipping out of Churchill have lead management to search for new product avenues. Recent attempts to initiate oil shipments from the sub – Arctic port were quashed by public outcry amid fears of potential environmental destruction in the case of a spill. Protesters fear an oil spill in the Hudson Bay would cause irreversible damage to the fragile northern ecosystem that, among other wildlife, is home to the mighty polar bear.

It will be very interesting to see who steps forward as a potential buyer and what plans are put forth for the port and the Hudson Bay Line. The challenge is huge.

“Obviously, after a tough year in the industry we’ve looked at a lot of things and concluded that either the railway and the port needs more support or perhaps another owner or operator could take it on and see what they could do,” say Merv Tweed, president of OmniTrax Canada. “It is obviously a big challenge, but we feel we’ve put the port and railroad in decent shape over the last couple of years. We’ve brought in a lot of efficiencies, but it is a challenge.”

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