(The following article by Jim Beatty wa sposted on the Vancouver Sun website on November 14.)
VICTORIA, B.C. — The provincial government is selling BC Rail, the province’s railroad, to Canadian National Railway in a deal expected to be announced next week, The Vancouver Sun has learned.
The B.C. government is expected to introduce legislation next week enabling the sale to CN Rail, finalizing six months of intense negotiations with three private-sector bidders.
The privatization deal will see the operation and management of BC Rail transfer to the private-sector company while the B.C. government retains ownership of the railway tracks and rights-of-way.
The purchase price is not known.
Although the deal will bolster government coffers, the sale is highly controversial in rural B.C., with forestry companies and among rail employees, who believe their jobs will be threatened.
“We suspect there will be significant job losses,” said Bob Sharpe, chair of the Council of Trade Unions on BC Rail.
Sharpe fears the privatization of BC Rail will result in the loss of at least 800 of the Crown corporation’s 1,600 employees.
“There has been a total lack of communication with any of us. All of us are wondering how they are going to address our concerns when they haven’t talked to us,” he said Thursday.
It has been suggested that the new private operator would likely transfer BC Rail’s maintenance and refurbishment operations to Alberta and Ontario.
BC Rail is the third largest railway in Canada based on revenue and has 2,315 kilometres of mainland track. BC Rail, which no longer operates passenger service, earns most of its revenue transporting forest, energy and agricultural products.
Government officials wouldn’t publicly comment on specific details of the privatization plan but in the past have promoted it as the best deal for provincial taxpayers.
Transportation Minister Judith Reid has said BC Rail, which is more than $500 million in debt, simply isn’t sustainable in the long term. A private-sector operator is intended to make BC Rail more efficient, effective and financially sustainable, she has said.
The three bidders — Canadian Pacific, Canadian National and OmniTRAX — were not commenting on the coming announcement.
“You’ll have to speak to the government,” CN spokesman Mark Hallman said Thursday.
New Democratic Party leader Joy MacPhail, who has fought the privatization of the railway, said British Columbians deserve their own rail service.
“It opened up our resource-based economy and it continues to serve that purpose,” she said Thursday. “We need to have an efficient rail line focused on the north-south axis for the shippers.”
Although the privatization of BC Rail has not registered as a significant matter in Vancouver, it is a hot issue in the Interior — especially in Prince George, where the Crown corporation employs 400 people.
A petition signed by 32,000 British Columbians opposed to privatization was introduced in the legislature last week.
“Despite our concerns, the government is proceeding,” said Dan Rogers, a Prince George city councillor opposed to the privatization.
The community fears the deal will lead to lost jobs and reduced rail access for local resource companies.
“At this point the government has failed to engage those who will be directly impacted such as the employees and the communities along the rail line,” he said. “Ultimately, the government doesn’t have a mandate to privatize or sell BC Rail. During the last election, they put in writing that they wouldn’t do this.”
During the 2001 provincial election, the B.C. Liberals promised “not to sell or privatize BC Rail.”
The biggest users of BC Rail — the province’s forest companies — fear the privatization of their transportation network.
“We’re nervous,” admitted Ian May, who speaks on behalf of a coalition of B.C.’s largest forest companies. “We’re not sure that our needs will be met.”
May said the forestry industry represents the vast majority of BC Rail’s freight business and yet the industry has been shut out of the privatization discussions.
“We have serious concerns about a monopoly being sold because it puts us at an extreme disadvantage. We complained to the government that BC Rail was offering poor service and even poorer prices and that something needed to be done about it. This is the government’s solution.”
May represents forestry giants Canfor, Weldwood, Slocan and West Fraser Timber. Together, they account for more than 50 per cent of BC Rail’s annual business.
Essentially, the forestry companies are worried that a new international rail operator will pay less attention to the needs of B.C.’s forest industry and will potentially increase shipping prices.
Canadian National Railway stretches from the Atlantic Ocean to the Pacific and south to the Gulf of Mexico, reaching all major points in North America.
BC Rail was founded in 1912 under the name Pacific Great Eastern Railway and was intended to open up B.C.’s vast north.