There was plenty of political backslapping this fall surrounding a federal-provincial commitment to invest $33 million in the Huron Central Railway.
But the railway’s president, Mario Brault, was preparing to do the heavy lifting next year to get his short-line track bed repaired for the long haul.
Although the straight-talking railway man was pleased for his employees, his customers and the communities between Sault Ste. Marie and Sudbury, he was still waiting for government agreements to be finalized and the money to start flowing before he could put the repair project out to tender this December.
“There’s no point trying to get major work done at this time of the year,’ said Brault, who is hoping to have a contractor lined up and materials ordered in time for a spring kickoff.
The long-overdue overhaul to replace rails, track, ballast and some bridge work is a four-year project. But it won’t impact rail operations and their two main shippers: Essar Steel Algoma in the Sault, and Domtar in Espanola.
“We definitely have to cope with poor track conditions right now and it’s not improving because there was some (political) announcement,” said Brault in a phone interview from his Montreal office.
“The actual work and capital program will start making a difference. We’re still able to operate (six days a week) but it’s very slow.”
Running speed on the 305-kilometre-long railroad is only 10 miles per hour. Brault would like to boost that to 25 miles per hour to operate more efficiently to be able to deliver just-in-time freight in the future.
The Huron Central Railway is also looking to Essar and Domtar for a long-term commitment to keep freight volumes up.
Dropping carloads from these shippers was a major sticking point last year that almost resulted in the closure of the line. The Huron Central’s parent company, Genesee & Wyoming, was preparing to drop service because of declining freight and the poor condition of the track.
The track is owned by Canadian Pacific Railway (CP) and was under a 20-year lease to Genesee & Wyoming signed in 1997. The Huron Central provides the locomotive power, operations management and track maintenance for CP’s customers.
Fortunately in 2009, the City of Sault Ste. Marie, Essar and Domtar reached a last-minute agreement with the railway to provide stop-gap money for track repairs and a freight commitment in return for a one-year temporary service agreement.
“We’re not looking for grandiose promises, but we’re looking for a minimum threshold from both shippers and they’re quite willing to come to the table with those volumes,” said Brault.
He would not comment on what those specific volumes are.
But drumming up new business for the Huron Central has been difficult. Canadian Pacific controls the sales and marketing on a line they considered marginal and were prepared to abandon.
Brault said a new agreement with CP is in the works.
“Under the new and improved Huron Central, we will have a bit more elbow room to do our own sales. But let’s not fool ourselves, there are not thousands of customers along this line.”
Many companies between the Sault and Sudbury prefer shipping by truck, although there may be bulk tonnes to be had from a new mine.
Ursa Major Minerals has started commercial production on their Shakespeare open pit nickel mine, just north of the Huron Central tracks at Webbwood. The mine, located 70 kilometres west of Sudbury, shipped 37,000 tonnes of ore in its first financial quarter this year to Xstrata Nickel’s Strathcona mill in Sudbury for processing.
Brault said gaining their business represents a definite opportunity for his company.
“We looked at it in the past, but the critical distance is not there to use rail. Trains are more efficient than trucks for slightly longer distances. But that doesn’t mean we can’t address this issue eventually once we’re in good shape and running.”
Bruce Strapp, the Sault’s outgoing CEO of economic development, said there is the potential to introduce more freight by hauling minerals from the U.S. Midwest into Ontario for processing.
Strapp said he has heard through discussions with various groups, that there are some ore deposits in Michigan being developed over the next couple of years.
Railways could be used to ship ore to Vale in Sudbury and other metallurgical sites in Northern Ontario, which all have strategies for custom milling.
The city has hired a consultant to investigate what future revenues may be available for that line. The recommendations have not yet been made public.
“Ultimately what’s not there is the wood industry. If that ever picks back up again there are some huge opportunities.”