Thursday, September 15, 2011

Newcastle Sub To Be Abandoned?

CN 2560 in Belledune, NB on May 1, 2008
CTV is reporting that CN is considering abandoning all or a portion of their northern line in New Brunswick and Quebec.This is the former NBEC / CFMG territory they purchased a scant 3 years ago in November 2008.

CN's Julie Senecal said that the line has not experienced any growth in traffic. No doubt the line is losing money for CN. The CTV report goes on to say that once Brunswick Mines shuts down in 2013 as planned, VIA Rail will be the largest customer on the line. CTV went on to say that if VIA were to shift to the CN main line, it would be "quicker and faster".

Now my opinions. First off, I have never understood why CN bought the line back from NBEC / CFMG in the first place. It was obvious that there was not going to be any growth on the line, with the pulp and paper mill closures, and nothing has emerged. It has been suggested that CN bought it to prevent any competitors from purchasing it. Perhaps.

VIA 6400 in Miramichi
CTV missed the obvious point that if VIA were to switch the Ocean to the CN main line between Edmundston and Moncton, VIA would not be serving the communities of northern New Brunswick and Quebec, major users of the Ocean... and don't forget that the whole Gaspe coast would be cut off and the Chaleur would be lost as well.

Personally, I think CN is making a case for government support of the line to retain VIA's route. I'm not against that, given the economics of the situation. CN is in business and is not going to keep supporting a money-losing line. Government should step in and help with the maintenance cost.

I'm still wondering why CN bought the line in the first place...

PS - it would be nice if CTV actually took a photo or video of the line in question. Their footage shows VIA in Halifax and apparently the Corridor, with a few shots of the CN Gordon Yard in Moncton. Do they still have any reporters in northern New Brunswick?  The shots in this blog entry were actually taken on that line! ;)

4 comments:

Cory Kamermans said...

Nick Moore could have been sent to Miramichi or even rogersville to report for CTV but i think this was a late breaking exclusive so they got rick grant to report it and he was able to get comments from the CN VP. However today they did send a video crew to take pictures but of course it was mostly just signage and the station and shots of downtown miramichi.

D--Gab said...

CN is still running the ultramar consists here in miramichi every now and again,if we lose the Ocean, we'll be one step closer to a ghost town... Unless they actuialy get our airport a 10,000 foot runway....

Luc Mallet said...

I have never understood as well why CN bought back the line. NBEC was always looking for ways to attract smaller shippers, something CN never had much interest in.

So what will happen when they have to close the NTR in the spring because of flooding along the St. John river? NBSR?

Peter Swire, CMA said...

In the rationalization of Class 1 carrier networks starting in the 1980's, railways first shed their branch lines. This was quickly followed by the severing of the secondary mainlines. In Ontario, this included the London - Stratford - Kitchener - Toronto line. In NB, this obviously was the former Intercolonial line. The sales of the latter line made sense to CN some 15 years ago.


Why did they buy it back one could ask? Perhaps, they wanted an insurance policy if there was an operational issue on the mainline. That would be rather expensive given its condition and the dependence on the bridge traffic. My sense is that they needed to buy back the line as a condition for CN's purchase of the other QRC lines.


In doing work for the Acadian Railway study, we did look at the conditions of the Bathurst to Moncton section. Realistically, about $ 60 million is required to bring the line up to the accepted mainline standards between the Miramichi bridge work as well as ballast, tie and rail upgrades. I am aware of the used ties that were purchased for the line about 5 years ago as a means to defray maintenance costs. From CN’s perspective, if they retained the line, there would also be need to add longer passing tracks should the volume develop.


Having said this, it is not in CN's commercial interest to retain this line.


Should the government bail out the line? That is a tricky issue. The Province clearly has no money. The federal government could consider it but it begs the question is the line in the national interest or purely a NB issue. Rather than looking at an investment in rail infrastructure, any payments could be used as a subsidy to shippers thus increasing the volume on the line or as a labour creating initiative.


As far as the Acadian Railway project is concerned, we would look at buying part of the line and providing CN with running rights over it. As part of the quid pro quo, there would need to be offsetting running rights elsewhere.

The Acadian Railway did have a number of conversations and meetings with QRC and NBEC prior to the announcement of CN's buyback. In essence, it would have seen the Acadian buying outright or doing a joint venture with the NBEC the line from Bathurst to Moncton.

I have been involved with parties in the North to see what can be done in terms of new volume. However, there is much work to be done to validate the shippers commitments to a new line as well as the approval necessary to construct and operate a line.