Short Lines Coming Back To Alberta?

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“Farmers can work together to market their own grain. It’s an old idea, but it worked before.”

AF contributor

Alberta had the first short line railway on the Prairies in the 1980s, but it ceased operation, leaving Saskatchewan to embrace the idea – it has eight short line railways with more to come this year.

But this year’s crop will be moving on another Alberta’s short line, if the Battle River Producer Car Group (BRPCG) has its way.CNwants to sell the 50-mile line that runs from Alliance to Kiron near Camrose. The rail giant proposed abandoning the line six years ago, even though it had been upgraded to 132-pound steel rail, the quality used on main lines in the 1980s. In response, local farmers formed a producer car group and have been shipping grain on the line for six years, loading more than 3,000 cars since. They say avoiding elevation charges on 90 tonnes of grain can save $1,200 – a decent return on a day’s work.

There are other advantages. Road bans are less of a concern and roads suffer less damage from heavy truck traffic. BRPCG president Ken Eshpeter says that even those who don’t use producer cars gain because competition forces local high-throughput elevators to offer trucking incentives.

The BRPCG members say they have learned a lot about marketing and shipping grain in the last six years. They didn’t plan to buy the line, but when CN put it up for sale this winter, they felt they had no alternative.

The BRPCG directors figure buying the rail line will enable them to offer their members an even better alternative to shipping through the elevator companies. They plan to take advantage of a composite grading program in which a whole trainload of grain is graded as a unit at the Prince Rupert terminal. They will also handle canola and malt barley trains.

Co-op spirit

“Farmers can work together to market their own grain,” says Eshpeter. “It’s an old idea, but it worked before.”

He says a rail line is the perfect community development project. “A user-friendly rail operator opens up a whole new wave of development in the five small towns along the line, and supports expansion of the two seed plants on the line.”

Truax, Saskatchewan, rail consultant Paul Beingessner agrees. “A railway benefits people along the line. On our line, we can bring in fertilizer or other things and we have a pulse processor as well as loading producer cars. It saves on trucking and contributes to the continued prosperity of the community.”

Another Saskatchewan rail company bought an old Pool elevator to improve loading. When U. S. corn was selling cheaper than barley, they were able to bring in corn and store it in the elevator for a local hog barn. The hog producer had lower-cost grain, and the railway and elevator gained revenue – a win-win situation.

Ogema, Saskatchewan has a rail car repair shop on a short line railway. The work is cyclical because railways tend to repair cars in large batches, but it’s skilled, well-paid work in a very small town. “Once the railway is gone, you lose a huge number of possibilities,” says Beingessner.

Province not keen

To keep those opportunities Saskatchewan has a program to support short-line rail development. It offers interest-free loans of a third of the track value and supports track upgrading. Just as important, government specialists help with business plans and in negotiations with the rail giants.

The Alberta government is much less enthusiastic. Doug Griffiths, MLA for Battle River-Wainwright and Verlyn Olsen MLA for Camrose-Wetaskiwin, see the value of the railway. “There’s a great case to be made for this initiative,” says Griffiths. “The fuel consumed in moving grain by train is one-tenth that used by B-trains, so CO2 and other pollutants are lower. It cuts road maintenance expenses for the province and, farmers can improve their bottom lines.”

Griffiths plans to meet with several ministers to discuss

helping the BRPCG. Although ministers’ offices confirmed plans to meet with him, they did not indicate any interest in the short line railway

concept. A spokesman for Luke Ouellette, Minister of Transportation, said the concept was “not on the radar.” Two years ago, he was asked in the legislature to support the BRPCG as an alternative to big trucks damaging Highway 13 when delivering grain to a high-throughput

elevator near Camrose. “The Province of Alberta is not in the railroad business,” Ouellete said. He assured the legislature that the province would “help private enterprise in that business with strategies to keep grain moving in the province,” and that funds were available for road repairs.

A spokesperson for Minister of Agriculture George Groeneveld said he is aware producers are working on a feasibility study and “encouraged the industry to seek innovative private sector solutions to their challenges.”

Short timeline

CN put the line up for tender in December and wants a bid by the end of April, although Griffiths suggests the timeline is longer as the company has many hoops to jump through before it can abandon the line.

At a recent meeting about 80 people endorsed the BRPCG tentative business plan and expressed a willingness to become shareholders. Putting a dollar value on the railway is one of the biggest challenges. A fair price is somewhere between the value of the railway to the communities and farmers in the area and its value to CN as scrap steel less the cost of clearing the railway right of way.

This is all complicated by an ongoing court case considering whether CN must return an abandoned railway to its original condition.CNmust also compensate affected MDs with $30,000 per mile of abandoned rail line.

“Maybe the line s only worth a dollar,” says Eshpeter. “Or maybe we have to find as much as $6 million. It’s a lot to figure in a few months.”

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