(The Canadian Press circulated the following story on November 1.)
WINNIPEG — Almost nine years after announcing its intention to sell its aging fleet of grain cars, the federal government appears eager to finally make a decision.
Transport Minister Jean Lapierre heard from potential buyers and others with an interest in grain transportation during a closed-door meeting Monday in Winnipeg.
Lapierre said he has received three expressions of interest to buy all or part of the fleet, and he hopes the government will sign off on a deal soon.
“I’d like to be in a position to report back to my cabinet colleagues before Christmas and try to provide a balance between the interests of the taxpayers and the interest of the farmers,” Lapierre said during a break in the day-long meeting.
Ottawa first announced plans to sell the fleet of about 13,000 hopper cars back in 1996. It will cost the government about $1.5 billion to replace the entire fleet in 20 years, but some aluminum cars will need to be replaced within the next five to seven years.
Monday’s meeting revealed the division that exists over the proposed sale among farmers and the grain transportation sector.
The Farmer Rail Car Coalition wants to buy the entire fleet of hopper cars because it says it can save farmers money by better maintaining the cars.
“Grain transportation and handling is our biggest cost and we want to get a handle on it,” said coalition president Sinclair Harrison. “We want to bring our costs down.”
But other farm groups, such as the Saskatchewan Canola Growers Association and the Western Canadian Wheat Growers, say the government should hold onto the cars. They say new ownership would do little to improve grain transportation and could end up costing farmers more in freight rates.
“We think there’s definitely room for improvements but the system is working,” said Brad Hanmer, president of the Saskatchewan Canola Growers Association.
Canada’s two national railways have also entered the debate.
On Monday, Canadian Pacific Railway presented the government with a plan it says makes the country’s grain-handling system more efficient and stable.
Under the proposal, Transport Canada would maintain ownership of the fleet, but the railways would undertake a major quality enhancement program.
“What we’re looking to see are changes around how you manage the fleet on a day-to-day basis so that it’s a free-flowing fleet as opposed to one constrained to movement in two corridors,” said vice-president Marcella Szel.
But Szel added CPR is ready to bid on the fleet if the government insists on selling.
It would join Canadian National Railway, which has said it thinks the current system works well, but told the government last February it is willing to bid on the 6,000 grain cars it operates.
CN spokesman Jim Feeny said having new players, such as the Farmer Rail Car Coalition, in the transportation business brings a lot of uncertainty.
“Anything that introduces more complexity or more third parties into the system, we think, will ultimately be a detriment,” said Feeny.
“Let’s keep it simple.”