Workin’ on the Railroad

When governments and public bodies are proud of the deals they’ve brokered or the progress they’ve made on sticky issues or the money they’re allocating for studies and reports, they climb onto the roof of the tallest building they can find and sing their triumphs to an admiring world.

When they’re less impressed with themselves, they announce their accomplishments in press releases on Fridays before three-day holiday weekends.

Guess which category the latest developments in the Cape Breton rail saga fall into?

 

Preservation deal

At 11:37AM last Friday, just before the Labor Day weekend, the province issued a press release announcing it had reached (yet another) deal with rail operator Genesee & Wyoming (G&W) to keep it from applying to abandon the portion of the Cape Breton and Central Nova Scotia (CBNS) short line between St. Peter’s Junction and Sydney.

Business Minister Geoff MacLellan said:

This agreement preserves the existing rail line, which is a key component of the proposed container terminal in Sydney. Government continues to work together with businesses, community and municipal leaders on economic development related to Cape Breton. Strong transportation links are a key component of building a stronger economy.

The deal (which has been backdated to March 2017 for reasons the government didn’t feel it necessary to explain) will see the province reimburse the American rail operator for “valid expenses” up to $60,000 a month for a year. (Perhaps it’s my cynicism shining through, but I’m guessing we can eliminate the “up to” in that sentence).

Later that same day (at 2:48PM, to be precise) came a second press release, this one from the Port of Sydney Development Corporation (PSDC), announcing it had commissioned “a detailed analysis of the condition of the CBNS rail line and cost estimate to bring the line to a standard that can accommodate double-stacked container traffic.”

And why do we need to upgrade our railway?

“The CBNS rail line is an essential component of port development, particularly for a container port and logistics park,” said Port of Sydney CEO Marlene Usher.

The “first phase” of the project is “budgeted at $80,300 plus expenses” and will be conducted by the consulting firm Hatch, the latest in a long line of consulting firms  — Bechtel, InterVISTAS, Industream, Cadence, Harker Associates, Darious Group, Drewry, J.C. Evans Consulting — whose CEOs probably have framed photos of Port CEO Marlene Usher on their desks in recognition of the hundreds of thousands of public dollars she’s sent their way.

Usher told the Cape Breton Post the funds would come out of the port budget as both ACOA and the province had rejected the port’s funding applications.

 

Two problems

I wrote about this study back in April 2017, when I ran across this reference to it in the minutes from the March 2017 meeting of the PSDC board:

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.

Note the full  price tag: $460,000, of which Invest Nova Scotia and ACOA have apparently agreed to contribute bupkis.  As for First Nations, the press release says they and the CBRM “support the approval of funding from the Port of Sydney for this project.”

There are two problems with that: first, the Port of Sydney turns the small profit it does because it owes the CBRM hundreds of thousands of dollars in unpaid rent for the Joan Harriss Cruise Pavilion. If it has found $80,300 to pay for a rail study, it probably found it in the so-called Assumption Fund, which contains monies left over from the harbor dredge. The PSDC has been redirecting those monies ($2.5 million, originally earmarked for navigational aids) into “business development” for the past several years.

But (and here’s the second problem) why would the PSDC pay for a rail study in support of the container port project, given that responsibility for that project was famously removed from the purview of the PSDC board when the actual board replaced the interim board last April?

Here’s the definition of the “Port of Sydney” contained in the modified Memorandum of Association for the PSDC:

For the purposes herein, the “Port of Sydney” means the Sydney Harbour and associated infrastructure as it relates directly to the operation of the Joan Harriss Cruise Pavilion terminal and wharf.

The rail line, were it ever to be upgraded, would serve the greenfield site on the other side of the harbor — infrastructure that does not relate directly to the operation of the Joan Harriss Cruise Pavilion and wharf.

So who decided the port would fund the rail study? Did Usher get rejected by the province and ACOA in time to return to the interim Port board with the ask? That seems unlikely. Did she bring the question to the new board? If so, how was it able to justify spending in support of the container terminal project?

And where is the other $379,700 for the subsequent “phases” of this study to come from? Is phase one, by itself, of any value or is it like knowing you can’t afford a horse so deciding to buy a saddle?

 

Early summer report?

I had been expecting an announcement about the railway this summer, but this isn’t it.

I’d been expecting the results of a report, commissioned from consultant Neil MacNeil, on the plight of landowners along the disused Cape Breton portion of the CBNS rail line — the ones G&W wants to charge thousands of dollars to run utility lines across the tracks.

I wrote about that situation (at length, in that little way I have) last year and since then, nothing has changed — except that MacNeil was hired and his report was promised by “early summer.” Early summer became mid-summer then late-summer and that report has failed to materialize, even though I keep asking the Department of Transportation and Infrastructure about it like it’s a new Harry Potter book and I’m nine.

Obviously, what I want to know is whether the recommendations in the report are compatible with the terms of the “preservation” agreement signed with G&W.

 

German widgets

Instead of releasing MacNeil’s report, the government and the Port of Sydney made announcements about the (actual) railway in relation to the (fictional) container terminal. How fictional? Consider what Halifax Examiner publisher (and Norfolk, Virginia native) Tim Bousquet has to say on the subject:

No shipper wants to use the North American port that is closest to Europe. That makes no sense at all.

Think about it. You are the manager of a German manufacturing firm, and you want to export to North America. You’re not going to sell many widgets in Canso or in Eastport. Instead, your primary market is going to be places like New York City, or Chicago, where there are millions of people and lots of industry to buy your widgets.

So how do you get your widgets to Chicago? Expensive and light stuff, you can fly directly there. Everything else has two legs: one by sea, and one by land.

The sea part of the voyage is relatively inexpensive. You can stack a gazillion of your widgets in the new post-Panamax ships. A small, underpaid crew from the Philippines steering a ship flying the flag of a lightly regulated country like Liberia doesn’t cost much.

The land part of the journey, however, is expensive. You’ve got to divide up your gigantic cargo and divvy it into a thousand trucks, each driven by a highly paid (relative to the shiphands) driver, using lots of fuel to get to Chicago. Or, if you’re lucky, you can use rail, which, while cheaper than the trucks, is still much more expensive than the sea voyage, per unit transported per distance.

The guy sitting in Germany isn’t looking for the North American port closest to Germany, but rather the North American port closest to Chicago, or wherever his widgets are going. If that means a longer sea journey, the cost is more than made up for with the huge savings of a shorter land journey. I’m not sure why megaport boosters get this so wrong.

Rail supporters probably shouldn’t hitch their train cars to the container terminal project. If there is a case for rail — and I think there is — it doesn’t hinge on convincing the widget makers of Germany that landing goods on the far, eastern edge of North America and shipping them inland makes economic sense.

It hinges on the need to reduce carbon emissions, the desire to improve road safety, the price difference between upgrading a mile of rail line and twinning a mile of highway. It hinges on thinking about the future and what it might look like and then laying some plans to help get us there instead of running the Red Queen’s race, which is what we seem to be doing on the rail issue:

“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you run very fast for a long time, as we’ve been doing.”

“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” (Lewis Carroll, Through the Looking Glass)

 

 

 

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