(The following story by Adrian Ewins appeared on the Western Producer website on January 8.)
SASKATOON — A group of farmers in southwestern Saskatchewan wants to buy the short-line railway that provides the only rail link to their isolated corner of the Prairies.
The group is trying to collect 300 pledges of $2,000 each from farmers and others along the 550 kilometres of track operated by Great Western Railway.
That would provide $600,000, enough to cover a down payment, business plan, formal share offering and other start-up expenses.
The asking price for the line is $5.5 million.
As of the end of December, the group was about halfway to its goal, and time was becoming a factor, according to spokesperson Con Johnson.
“By mid-January we have to be at least close to that number,” he said in an interview from his farm at Bracken, Sask. “To this point, in some areas the response has been disappointing, to say the least.”
If the local group can’t come up with the money to buy the line, its future will be thrown into doubt.
Great Western, now in its fourth year of operation, operates on track formerly owned by Canadian Pacific Railway.
The line snakes its way through the rolling country southwest of Swift Current, running west almost to Alberta and south nearly to the U.S. border.
Despite the closure of just about all of the major company grain elevators on the line, the railway has shipped as many 2,590 rail cars in a year and is on target to reach 3,000 in 2003-04.
But the British Columbia company that owns GWR has been losing money on GWR’s operations and wants to get out of the short-line business.
“We’re hoping to get an agreement (with the local group) in the next couple of months,” said Ross Fraser, general manager of Westcan Rail Ltd. of Abbotsford, B.C. “If not, we’ll have to look at other options.”
That could involve applying for discontinuance or transfer under the Canadian Transportation Act, under which the line would first be advertised for sale, then offered to governments for net salvage value, then, if no buyer is found, taken out of service.
Fraser said Westcan had high hopes for the line when it took it over July 2000, but those hopes were undermined almost immediately when Saskatchewan Wheat Pool announced that it would close all of its elevators along the line within the next few months.
The pool set up an ambitious trucking program, offering farmers irresistibly lucrative incentives to bypass the railway and instead truck grain to the pool’s big inland terminals at places like Moose Jaw, Gull Lake and Maple Creek.
As a result, the railway is hauling only about 20-25 percent of the grain available in the line’s catchment area.
“The pool has done everything in its power to have that line eliminated,” said Fraser, saying GWR ran headlong into an “old boys club” mentality in the grain industry
There are now just four elevators on the line, two operated by Pioneer, one by Agricore United and one by N. M. Paterson and Sons. Fifteen old wooden elevators along the line have been purchased by private commercial shippers, and producer-car loading facilities have been set up at seven locations.
The line has become a major shipper of producer cars, which account for more than half its business, but Fraser said that was never the intention.
“That’s way too much work,” he said. “We’re just a transportation company and we’re getting so involved in the grain handling process it’s ridiculous. As a railway, we shouldn’t be doing that.”
He added that if the local group buys the line, its success will depend on whether farmers make a serious commitment to using the rail.
Johnson agreed that local control is crucial to the future of GWR, both in ensuring grain supplies and keeping as much of the hauling revenue as possible in farmers’ pockets.
If the rail line goes, it will mean an additional 7,000 semi-loads of grain travelling over the region’s road system every year.
Given that it costs $1 million a mile to upgrade and maintain a provincial road, any financial assistance from the province would be money well spent, said Johnson.