(The Canadian Press distributed the following article by Dirk Meissner on March 11.)
VICTORIA, B.C. — The B.C. government cancelled the bidding process for a B.C. Rail spurline Wednesday, revealing the potential deal is part of a widening ongoing police investigation involving the Crown-owned railway.
Transportation Minister Kevin Falcon said the probe involves the bidding process for the Roberts Bank subdivision, the line that services a huge coal terminal south of Vancouver.
It involves advisers to one of the bidders receiving confidential government information that would have resulted in British Columbia not receiving fair value for the rail subdivision, Falcon said.
“This information was reviewed by the evaluation committee and they have determined that one or more of the advisors to the proponents may have come into possession of confidential material prepared as part of the port subdivision request for proposal process,” said a news release issued by John McLernon, chairman of the B.C. Rail evaluation committee.
“This material, which is significant to the province’s negotiating and financial position, was not intended to be shared with proponents,” the statement said.
Falcon said the latest information about the police probe does not threaten the $1-billion Canadian National purchase of B.C. Rail last year.
“We have no information to suggest that the successful proponent CN has come into any information that would undermine the outcome of the B.C. Rail-CN investment partnership,” he said.
“I and the evaluation committee are confident the province accepted the best proposal for the B.C. Rail-CN partnership, and indeed did receive fair value.”
The Roberts Bank line was being sold in a separate bidding process.
The government had received three bids for the spurline, said Falcon.
One bid was from a group of companies that included CN and the Vancouver Port Authority.
OmniTrax and McQuarrie of Australia also offered a bid, as did Southern Railway, he said.
Falcon said the spurline deal was worth between $70 million and $100 million.
New Democrat Leader Carole James said the Liberals have consistently denied that police investigations have compromised government business, but now it’s been forced to dump a deal.
“It doesn’t matter what this government seems to be doing these days, there seems to be an investigation around it,” she said. It’s one more blow for British Columbia.”
The minister refused to offer further comment when asked if Wednesday’s move was related to a police raid last December on the offices of ministerial assistants in the B.C. Finance and Transportation ministries.
“I can’t go into the nature of the police investigation,” he said. “I have to really constrain myself with remarks about the police investigation.”
A summary of search warrant information released last week said the raids related to possible influence-peddling and breach of trust connected to B.C. Rail.
Controversy swirled around the government’s sale of the Crown-owned railway last year to CN after competitors CP and OmniTRAX-Burlington Northern Santa Fe complained the process was unfair.
That report found the sale of B.C. Rail was conducted properly.
RCMP have said the Dec. 28 raids at the legislature arose from information turned up in a separate 20-month investigation involving organized crime, money laundering, drugs and police corruption.
The offices of David Basi, ministerial assistant to Finance Minister Gary Collins, who is also Liberal house leader, and Robert Virk, ministerial assistant to former transportation minister Judith Reid, were searched.
No one has been charged and police have stressed no elected politicians are involved.