(The Canadian Press circulated the following article by Dirk Meissner on April 20.)
VICTORIA, B.C. — The controversial deal to sell the operational arm of British Columbia’s Crown-owned railway to privately run CN Rail picked up more baggage Monday when the Liberal government said the billion-dollar deal could run for almost 1,000 years.
The deal has been the focus of Opposition and labour taunts of broken election promises by Premier Gordon Campbell not to sell or privatize the railway and an ongoing police investigation involving allegations of influence peddling and drug dealing. It was billed last fall as a 60-year agreement with a 30-year renewal option.
“The billion dollars was a prepayment for the right to use the tracks over the 90-year term,” said B.C. Transportation Minister Kevin Falcon. “What happens after the 90 years is we as the government have the option to determine whether we want to continue on or whether we want to bring in another operator.”
He confirmed the deal’s contract language, which includes 60-year renewal options, could see CN operate BC Rail for 990 years, until 2994.
Campbell said the deal protects taxpayers, because the 60-year renewal language allows the public to continue or leave the arrangement.
“This is not a 900-year agreement,” he said. “This is a 90-year lease. There is an option for the public to decide if it’s in the public interest to extend that lease for 60 years and subsequent to that for additional years.”
Falcon said the government didn’t make the details of the potential length of the deal public, because it was awaiting the results of a Federal Competition Bureau review of the contract between the government and CN Rail.
The results of the review could be ready this month, he said.
“We said from the beginning that as soon as the competition bureau is finished going over their examination of the agreement that we will release everything that we can publicly release that does not have commercial sensitivities attached to it,” said Falcon.
NDP Leader Carole James said it appears the government tried to keep details of the length of the deal secret.
“It’s a bad business deal for British Columbians,” she said. “This contract confirms the fact the Liberal government has messed up another privatization deal.”
The government shelved plans to privatize operations of Interior B.C.’s Coquihalla toll highway after a huge public outcry.
James said it appears the rail deal would allow CN to buy valuable property for one dollar if the company decides to drop some sections of the current track.
“They wrote in a clause that very clearly gives CN the opportunity to purchase land if they decide to close down rails within five years,” James said.
Falcon said the one-dollar discontinuance clause was included to ensure CN took responsibility for the land.
“If CN wishes to discontinue a certain section of track, we have the right to force ownership on them for a dollar,” he said. “If there were, for example, a chemical spill or something that happened along those lands that would require huge remediation costs, we want to make sure CN isn’t able to just discontinue the use of that track (and) taxpayer has to pick up the tab.”
Unions representing railway workers demanded full disclosure on the deal immediately.
“The privatization of B.C. Rail is the biggest giveaway B.C. has ever seen,” said Bob Sharpe, chairman of the Council of Trade Unions on B.C. Rail. “CN Rail will pay off the deal with B.C. Rail profits in the first 10 years and make billions and billions of dollars for almost 1,000 years to come.”
Sharpe said the deal will be a disaster for taxpayers.
CN Rail and the government announced a partnership last year that would see the U.S.-controlled company take over the freight operations of B.C. Rail with government maintaining ownership of the line, which runs from North Vancouver to northern British Columbia.
The deal has been surrounded by controversy.
Last month, Falcon said an ongoing police investigation was behind the cancellation of the sale of a B.C. Rail spur line near Vancouver.
But he refused to say if the cancellation of the spur line sale was related to a police raid last December on the offices of ministerial assistants in the B.C. Finance and Transportation ministries.
A summary of search warrant information released last month said the legislature raid was related to possible influence-peddling and breach of trust connected to B.C. Rail.
Last year, companies bidding for B.C. Rail complained to the government about the fairness of the process.
The government commissioned a report that found the sale of B.C. Rail was fair and conducted properly.