SYDNEY, N.S. — The Nova Scotia government said Tuesday it has a plan that could keep a Cape Breton railway running, the Canadian Press reported.
The government said it has the right to buy the line at a low price — the net salvage value — and it will offer that right to private companies that may want to purchase the line.
What remains to be seen is whether any buyers come forward for the line, which will be abandoned next year.
“We’ve said from the beginning that government will not be in the business of subsidizing a railroad,” said Economic Development Minister Cecil Clarke.
“But we are not prepared to give up our efforts at keeping the line open as long as we believe that there may be an opportunity for a private company to operate it.”
Clarke said the province will get help from the Canadian Transportation Agency in assessing the line’s value, which it expects to see in January.
Whatever the price, a Sydney-area municipal official said it really won’t matter.
“The problem, basically, with this line is that there is very little traffic on it — less than 10 per cent of what the line actually needs to survive,” said John Whalley, economic development officer with the Cape Breton Regional Municipality.
“No matter what the cost of acquisition of the line, if anybody is to operate that line, they have to be able to pay their operating expenses and they have to make capital investments to the railway, to the bridges, to all the structures. And you can’t do that on (traffic of) 800 cars per year.”
Sean Burke, a spokesman for a group of businesses interested in keeping the line running, agreed more traffic must be generated.
But Burke welcomed the province’s announcement, saying at least any potential new operator now has a clearer picture of what to expect.
“That’s one side of it, to determine what that value is,” he said. “Then once you have that, there are probably some business models out there that will work.
“But there’s lots of work that has to be done.”
Earlier this month, provincial regulators approved plans by the Cape Breton and Central Nova Scotia Railway to abandon its freight service east of Port Hawkesbury.
The service will end in the spring. Business and community leaders in the Sydney area have said it will be a major blow to the economy.
A number of companies in the area depend on the rail line for shipping. The firms have said abandonment of the line will cost its users tens of millions of dollars and could affect hundreds of jobs.
The rail company has said traffic on the line has plummeted since the island’s coal mines and steel plant shut down, which used to account for 40 per cent of the railway’s overall business.
Traffic has recently been at about 1,000 carloads annually. The break-even point has been estimated at about 5,000 cars annually.
Whalley said the only way to interest potential buyers is for the province to make more of a commitment.
For example, he said the province could persuade privately owned Nova Scotia Power to ship coal on the rail line to its generating plants on the island.
“The province is the regulator of both entities, the railway and Nova Scotia Power,” he noted.
The other mechanism, which the province has ruled out, is some type of operating subsidy, he said.
“It’s hard to see a private operator coming in without the benefit of any type of financial support.”