A small specialty railway company has made a play for Ontario Northland Railway (ONR).
TGR Rail Canada, based in Toronto, offers specialty services to other rail lines in the province, mostly in southwestern Ontario.
It has submitted a preliminary bid for the ONR's track and assets, and submitted its underwriting. Its purchase capacity is in excess of $150 million, said president Kevin Street.
“We see ourselves as an underdog but we want to come in very strong. We see this as a huge opportunity and once there, and improvements are made, this will be the best thing ever.”
Its bid includes job preservation, keeping the head office and its car refurbishment facilities in North Bay, and a commitment to maintain passenger service.
Street said about 30 companies have expressed an interest in the railway or parts of it so far, and there is much speculation about huge job losses.
“Most people looking at it are just looking at small pieces. We see this as an opportunity to provide a regional rail service, which is a little bit up from a short line, and the best way to do it is to run it pretty close to its present form,” he said.
Street speculated that the current Northlander passenger run from Cochrane to Toronto may not be viable, but running it from North Bay to Toronto would be, if replaced by a new specialty service.
In Englehart, where one of the town's major employers is the ONR, Street said there would be “no point in sending people packing.” And there is no way, “a new guy like us coming in, would start ripping up track and firing people.”
TGR would also continue with freight services.
“Every freight customer that gets service today gets service the next day if we were successful in taking it over,” he said. “Following a six-month, break-in period, the customers would get a chance to design their own service as to how they like to get it. They will get a chance to get the best customer service that they can expect.”
Larger rail carriers, such as Canadian National (CN), don't require a refurbishing shop or head office in North Bay, Street said. They also don't require sales and administration people and won't cater to smaller customers.
“For companies that are large, it's not feasible for them, if running a 200-car train, to stop and set up a few cars for a mom and pop operation. That's why CN sold its short lines,” Street said. “But it still makes a big difference to mom and pop to still get service, even if they are doing one or two cars a week. That is where we come in and where we guarantee it. We are going to be a better solution than the big guy.”
The company said even agricultural customers, such as farmers, can find savings over the course of a year shipping by rail and receiving supplies by rail.
TGR's workforce ranges from five to 80 employees, depending on what services it is offering at any given time, such as covering vacations for other railways or operating special trains.
“If you look at who is running the company, there is a lot of railway experience there,” he said.
The company became involved in short lines when CN began divesting them across Canada in the early to mid-1990s. In 2002, TGR offered specialty rail products and steam excursions and then branched out to specialty services.
It sees opportunity and growth in Northern Ontario, especially in the long term. In the next 10 to 15 years, there will be potential with the Ring of Fire deposit in the James Bay region.
“It used to be that all the opportunity was in southern Ontario but that certainly isn't the case any more,” Street said. “A lot of things are coming on line in Timmins, Kirkland Lake and Cochrane and even northwestern Quebec. All the areas served by the ONR are the places to be now. The big opportunities are coming in the North.”
The company's strength would be in customer service and “getting the cars there and getting them on time.”
The Ontario government announced the divestment of the Ontario Northland Transportation Commission in March, which employs about 950 people. Infrastructure Ontario is handling the divestment, but has not yet made the process public for ONTC's rail line, bus lines and telecommunications assets.
Street said the company is waiting for the government to do its due diligence and arrive at a proper valuation of its assets.
“The big apprehension over this is natural, of course, but the people to take this the furthest and make the best-case scenario come true are small operators like ourselves.”
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