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Sault Ste. Marie mobilizes to save short-line railway

A delegation of community and industry leaders are traveling to Montreal this week to make a last-ditch effort to keep a vital rail link open in northeastern Ontario. Joe Fratesi, the City of Sault Ste.
Huron Central's announcement that it was stopping its Sault-Sudbury service has politicians and companies scrambling to find a way to keep freight moving.

A delegation of community and industry leaders are traveling to Montreal this week to make a last-ditch effort to keep a vital rail link open in northeastern Ontario.

Joe Fratesi, the City of Sault Ste. Marie's CAO remained “hopeful” a face-to-face meeting with Huron Central Railway president Mario Brault on Wednesday will buy some valuable time to keep the railroad aboard for the long haul, or at least grant the city enough time to help find an alternative rail carrier.

Fratesi said there will be no hard sales pitch to Brault other than, “What will it take to keep them involved for a period of a year? Hopefully they'll be part of a long-term solution.”

City and area business leaders are under some tight deadlines. In June, the Huron Central's announcement that it was withdrawing rail service to the Sault by Aug. 15 and to Espanola in late October had politicians, government bureaucrats and companies scrambling to find a way to keep freight moving on the 305-kilometre Sault-to-Sudbury line.

The railroad blames declining tonnage, mainly from Essar Steel Algoma, and the track's general state of disrepair. Upgrades are pegged at $33 million.
Fratesi will be accompanied by Essar Steel Algoma CEO Armando Plastino and Bill Therriault of the city's multi-modal steering committee. Domtar senior executives will meet them in Montreal.

The trip comes on the heels of a stakeholder meeting in the Sault, July 14, to come up with a game plan to keep the line open.

Having a rail link to steel customers in southern Ontario is critical to Essar's growth plans in the Sault. Tonnage issues will be addressed with Brault, said Fratesi.

“Essar will make whatever commitments it can in view of current economic times and certainly make commitments to rail long-term,” said Fratesi. “Maybe Mario needs to hear that in a more formal way.”

The steel company's former president/CEO Denis Turcotte said the pull-out by the railroad is “a setback for Essar and the North,” but referred further comment to Plastino.

Plastino was not available for comment. Huron Central operates the Sault-Sudbury line for Canadian Pacific Railway, but CP stated it has no intentions of taking back operations and would likely file for closure.

Canadian National Railway, which also services the Sault from the north, “offered no comment about the subject at this time” through a spokesperson when asked if the company had interest in acquiring the line.

Though devastating to Essar's long-range production plans, the closure of that rail link could threaten the viability of the Domtar paper plant in Espanola, as well as economic development prospects for communities along the North Shore of Lake Huron.

The absence of a rail carrier would all but scuttle the Sault's vision to develop a multi-modal transportation hub to handle international container freight.

It would also put hundreds of steel-laden transport trucks on the road, something Elliot Lake Mayor Rick Hamilton isn't keen on.

“My citizens have to drive on that highway to get here and the last thing I want to see is another thousand trucks with steel coils and finished paper products causing additional hazards.”

Ottawa and Queen's Park have been slow to funnel infrastructure repair dollars to Ontario's 14 short-line railways.

“Senior levels of government, I think, have been awakened to realize that there's a cost to keep it going but a much bigger cost not to have it,” said Fratesi.

Last week, Premier Dalton McGuinty told reporters during a visit to the Sault that projects like the Huron Central Railway would qualify for future government infrastructure funding. He did not give specifics on any timelines to access money.

Sault Ste. Marie MPP David Orazietti did not answer repeated requests for an interview with Northern Ontario Business.

Other provinces have fashioned public-private funding assistance for short lines.

In New Brunswick, a three-way $36 million infrastructure arrangement to keep the New Brunswick Southern Railway running was announced July 7.

The Railway Association of Canada has proposed a partnership between Ottawa, Queen's Park and short-lline operators to each invest $29 million toward improving rail infrastructure for Ontario's 14 short-line railroads.

“Ontario is in the process of working something out and maybe this just moved it along a little quicker,” said Fratesi.

If an arrangement with the Huron Central can't be worked out, Fratesi said there are other interested short-line operators, from within and outside Ontario, waiting on the sidelines.

“We don't want to be talking to other people until we're fully satisfied that the operator we have now isn't going to be here.”

Some NDP politicians and unions favour the government-owned Ontario Northland Railway taking over the track.

Fratesi said he has spoken with ONR president Steve Carmichael but such an expansion would require a provincial mandate to do so.

Another fall-back plan is to create a consortium of industry and municipalities to operate the line. But Fratesi said those options won't be explored unless they have exhausted all avenues with the Huron Central.