After a brief and unsatisfactory run with a Michigan rail company, the search is on again to find a new operator to revive the Algoma Central passenger rail (ACR) service between Sault Ste. Marie and Hearst.
A stakeholders group working to save the northeastern Ontario service issued a request for proposals (RFP) in mid-August with invitations sent out to 25 railway-related firms across North America.
The deadline for proponents to make submissions was Sept. 9.
However, a new operator isn’t expected to be in place until very late in the year, well after the tourism season has been put to bed.
“Realistically if we do get someone in the final quarter of this year, it will be in December,” said Tom Dodds, CEO of the Sault Ste.Marie Economic Development Corporation and the head of the ACR Passenger Service Stakeholders Working Group.
The Working Group is a committee representing municipalities, First Nation communities, travel associations, cottage and land owners, lodge operators, and railway enthusiasts working to save the service, which was abruptly cancelled in July by Canadian National Railway (CN), owners of the 470-kilometre-long line.
Once the submissions are in, the group will spent the next three weeks reviewing the submissions with CN before announcing the successful operator likely in early October.
“It’s in everybody’s interest that we do it sooner rather than later,” said Dodds. “To quote the mayor (Christian Provenzano), we’re going to be prudent, not hasty.”
CN’s selection last March of Railmark Holdings of Wixom, Mich. to run both the passenger service and the iconic Agawa Canyon Tour Train excursion on the same line turned out to be an exercise in frustration.
Railmark’s inability to obtain private financing and reach a satisfactory agreement with CN prompted the rail carrier to take back the Agawa Canyon train for the remainder of the year in June and terminate the passenger service in mid-July.
Transport Canada was reluctant to flow a critical operating subsidy to Railmark, offering only to release it through the City of Sault Ste. Marie, while passenger train users and business operators openly complained of Railmark’s refusal to service the entire length of the line.
With an untapped federal subsidy still on the table and sufficient agitation generated by stakeholders about Railmark’s substandard performance, Dodds expects they’ll have a bigger pool of proponents to draw from.
"Over the course of this exercise we've had expressions of various levels of interest from a variety of U.S. and Canadian (operators) about this particular railway. It is a bigger list and the level of interest is substantial greater. We started from scratch last time. Now the interest is greater.”
And unlike the first go-around, Dodds said the Working Group will have greater input in selecting a new operator, but ultimately CN has final approval.
“We will do our due diligence, of course, and in a more disciplined way than done previously.”
Since 1977, various railway operators have historically relied on a government funding to sustain the service which was put in jeopardy when Transport Canada advised CN in November 2013 that it was revoking the annual $2.2-million subsidy, ruling the service was no only eligible under a remote rail program.
After a regional outcry by train commuters, the subsidy was restored for one year in early 2014, followed by a new $5 million funding package over three years announced in April.
The new operator will have to meet the various regulatory requirements, including obtaining a Canadian rail operating certificate, be fully insured for $100 million, have sufficient operating capital, and meet the needs of CN, Transport Canada, and the Working Group stakeholders.
Dodds said it’s entirely conceivable that the new operator could snag both the passenger service and the Agawa Canyon excursion, but the latter service would be the subject of confidential talks between the proponent and CN.
In the long term, for the passenger service to survive, Dodds said there must be a larger discussion on creating a greater “value proposition” in serve the regular rail commuters, but also create more upscale premium world-class tourism products that will boost ridership, which numbered 7,300 in 2014.
