(The following report by Scott Simpson of the Vancouver Sun appeared at Canada.com on November 20.)
VANCOUVER — Neither the bidders for BC Rail nor the Crown railway’s biggest customers were consulted for a report that gave glowing approval to the provincial government’s handling of the sale of BC Rail.
Premier Gordon Campbell acknowledged that neither Canadian National, Canadian Pacific, nor OmniTRAX were consulted for the report on the fairness of a bidding process which has apparently selected CN.
There was no evidence that the bidding process “was either manipulated or engineered to validate a predetermined decision,” concluded Charles River Associates in an interim report on the fairness of B.C.’s sale of BC Rail freight operations.
“While we have not yet interviewed the three finalist proponents, we are unaware of any concerns they have expressed regarding the fairness and impartiality of the process.”
As reported Wednesday by Vancouver Sun political columnist Vaughn Palmer, CP has sent a letter of protest to Premier Gordon Campbell that strongly disputes those assertions.
Palmer reported that CP withdrew from the bidding process over a perception that rival CN has received favorable treatment, with CP accusing the government of breach of principle and unacceptably giving CN the inside track.
The OmniTRAX-Burlington Northern Santa Fe partnership has also sent a letter commenting on the situation, but does not accuse the government of unfairness.
OmniTRAX expresses disappointment that it is not the winning bidder — but says it remains committed to the process and offers any assistance the government may require in making it final.
Neither CP nor OmniTRAX would comment on Wednesday, saying they are bound by confidentiality agreements that were contained in the bidding requirements.
Campbell said he reviewed CP’s letter on Tuesday evening and is referring it to the fairness consultant, who will issue a final report on the bidding process on Dec. 15.
Campbell said the timing of that report has no bearing upon the timing of the government’s announcement of a successful bidder for BC Rail.
Campbell did not identify a winning bidder, but said the province may issue a summary of all bids at some point.
Ian May, spokesman for the Western Canadian Shippers Coalition, said he has not seen the consultant’s report.
He said the consultant did not seek his opinion on the fairness of the process.
“We have no comment because, to the best of my knowledge, we have not be contacted. I certainly haven’t, so I don’t know anything about the fairness consultant’s work, other than what I have read in the paper.”
May said he expects the coalition to comment more fully on the process when it is complete.
The BC Rail situation is emerging as one of the government’s top three gaffes, along with plans to privatize operations of B.C. Hydro and the Coquihalla Highway.
Pressure from Interior and Okanagan communities forced the province to back down on plans to hand the Coquihalla over to a private operator, while plans to sell all of Hydro’s assets were abandoned due to pressure from the Crown corporation’s largest industrial customers.
100 Mile House Mayor Donna Barnett said shippers are upset about the bidding process and are uncomfortable with the government’s selection of CN because of potential higher costs it could bring to the province’s largest industry, forestry.
“If the shippers aren’t happy, then I am very concerned,” Barnett said.
The forest industry accounts for most of BC Rail’s business.
Shippers have only been given access to CN’s bid and thus cannot determine if it’s superior to the offers made by OmniTRAX and CP.
Barnett said CN hasn’t even visited her community to inquire about its expectations for BC Rail — although both CP and OmniTRAX made visits before the process even began.
She said the government has failed to keep its promise to make community impacts a signal priority in the sale of BC Rail’s freight operations.
She said the process has been anything but fair, despite the report’s assertions.
“I was led to believe that communities would come first. Maybe CN isn’t the lucky bidder, and maybe in some other way they’ve managed to take my community’s interests into account, but I’ve never talked to them,” Barnett said.
“I have a comfort level with [CP and Omnitrax] that my community is a big concern for them, that our needs are met.”
Earlier this year, the Sun reported that internal BC Rail documents concluded that OmniTRAX was the only candidate who would maintain BC Rail as a provincially regulated company that would require fewer job cuts than CN or CP in order to make its operation here profitable.
Meanwhile, it’s looking as if the process of deciding a bidder will be put over until next spring.
The B.C. fall legislative session ends next week and the government is virtually out of time to provide a thorough examination of legislation necessary to transfer BC Rail operations to the private sector.