Port of Sydney Seeks Public Funding for $460K Rail Study

The Port of Sydney Development Corporation will seek $460,000 in public funding for a study to “confirm the costs of upgrades to the rail line” from Truro to Sydney.

Final two locomotives on Sydney Subdivision of CBNS Railway near West Bay Road (Photo by Caleb Wentzell.)

In what we can only hope was a last hurrah for the Port’s interim board (Mayor Cecil Clarke, Deputy Mayor Eldon MacDonald, Councilor Clarence Prince, Councilor Jim MacLeod, former CAO Michael Merritt — remember him?), it authorized Port CEO Marlene Usher to approach Invest Nova Scotia (INS) for part of that funding. I know this because it happened during the interim board’s 1 March 2017 meeting, minutes from which have magically appeared on the Port website:

Rail Study: Marlene Usher informed the Board of the need for a comprehensive study to confirm the costs of upgrades to the rail line*. According to Ms. Usher, opportunities arising are often hindered because of not having such information. She acknowledged to the board of [sic] having received a recommendation from Deputy Minister Paul LeFleche [sic], to submit the $460k study to Invest Nova Scotia, and costs be shared with First Nations, the Port, and ACOA. Ms. Usher also advised of having received a verbal support from First Nations to do so.

A discussion ensued on what organization would be best to submit the funding application, which then led to the following:

Motion: made by Mayor Cecil Clarke, 2nd by Councillor Jim MacLeod, to approve Marlene Usher’s submission of an application to Invest Nova Scotia on behalf of the Port of Sydney Development Corporation to fund a comprehensive study on the costs to upgrade the rail line based on sharing the costs with First Nations, ACOA and the Port of Sydney Development Corp. Motion was passed.

Usher told me in an email that the study will cover the Hopewell and Sydney Subdivisions of the Cape Breton and Central Nova Railway (CBNS), operated by US-based Genesee & Wyoming (G&W).

Usher said the study is “required prior to any decision on investment in the rail line, containers and or any other project that would contemplate the use of rail.”

 

 

Genesee & Wyoming

Interestingly, although G&W has already been paid $120,000 by the Port for “participation” in a “rail strategy,” it will not be expected to contribute to the costs of this study. Instead, the Port will look to a variety of public sources — the province, the feds and First Nations — to fund a study that, it seems pretty clear, is intended to serve the container terminal project; a project always advertised as a “private sector” development.

Of course, G&W has never evinced the remotest interest in upgrading the Sydney Subdivision — by the US-based operator’s own admission, it didn’t even bother to find out what kind of shape the line was in before buying it. In a presentation to the Ministers’ Rail Advisory Commission (MRAC) in October 2014, G&W senior vice president Josée Danis indicated that G&W “had not reviewed the profitability or physical condition of [the Sydney Subdivision] at the time of the purchase as this line was part of a larger package.”

G&W apparently buys railways the way some people buy secondhand clothes — by the pound. And that’s certainly the way it intends to sell of the St. Peter’s Junction to Sydney section:

Further, Ms. Danis stressed the company’s interest in realizing the net salvage value from the removal of the rail.

 

CANARAIL

There’s also the small matter of the existing government-funded study into the costs of upgrading the Sydney Subdivision. One of three studies commissioned by the Ministers’ Rail Advisory Commission in 2015, it was undertaken by CANARAIL Consultants. Provincial spokesperson Marla MacInnis told me the CANARAIL study cost $116,000, with funding split between the province, ACOA (40%) and the CBRM ($5,000).

There was a great deal of publicity about its release and its contents — CANARAIL determined it would cost $31.4 million over five years to bring the railway up to scratch. Look, however, at this summary of CANARAIL’s report:

Okay, so maybe there is a need for a more detailed study of the upgrade costs but the question then becomes, what was the point of this $116,000 original study? What is the value in a figure like $31.4 million if the estimates for four of its six components are unreliable?

 

Council?

Where is the CBRM Council in this matter? I would imagine the state of the rail line is a matter of interest to all councilors (not just those on the Port board) as is the decision to seek out public funding for a rail study.

In preparation of the appointment of the permanent Port board, the PSDC’s Articles of Association were modified to relieve the board of responsibility for the container terminal project. That responsibility was returned to the CBRM. At the time, the Mayor said the move was in response to Council’s demand for more control over the Port project.

In light of that, it seems more than passing strange that the decision to undertake a rail study should be made by the interim Port board during its final days of existence.

 

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