(The Vancouver Sun posted the following article by Scott Simpson on its website on July 14.)
VANCOUVER, B.C. — The provincial government will reveal as early as today its shortlist of private-sector candidates to take over operations of BC Rail, Opposition leader Joy MacPhail says.
The list was delivered to cabinet last week by a BC Rail bid evaluation committee and is expected to include proposals by Canadian National, Canadian Pacific and RailAmerica, as well as a joint bid by Burlington Northern Santa Fe and OmniTRAX.
MacPhail said there continues to be widespread public uncertainty about the B.C. Liberals’ motives for putting BC Rail on the market, and called on the government to release all documents pertaining to the sale so people can make up their own minds.
As reported in The Vancouver Sun on Saturday, BC Rail staff concluded last August that only the Burlington-OmniTRAX partnership would ensure that the railway remains under provincial regulation.
It would also preserve 400 more jobs than a takeover by the presumed front-runner, CN.
That information was contained in one of a series of confidential briefs written by BC Rail corporate development staff who were analyzing the impact of a purchase by various railways on the short list.
The province announced in May that it was selling BC Rail freight operations, reneging on a 2001 promise by Premier Gordon Campbell that the railway would remain in public hands.
But international transportation consultant Michael Tretheway, a former University of B.C. professor, said medium-sized operations such as BC Rail are an endangered species across North America.
While the railway turned a profit last year, Tretheway acknowledged, over the long term it’s going to continue to lose money and the situation poses a serious risk for shippers who use the railway to sustain British Columbia’s forest industry.
“B.C. forest product shippers need a rail service that is sustainable in the medium to long term, and BC Rail in its current form is not,” Tretheway said.
Tretheway has advised British Columbia that BC Rail’s prospects are dim without radical reductions in overhead and operational costs.
Current BC Rail debt is $502 million, and over the past 15 years, the Crown corporation has written off $857 million in assets.
Debt servicing annually costs BC Rail $30 million — roughly half its operating income.
Tretheway said government-owned railways are becoming an anomaly and represent a burden on taxpayers. The number of medium or Class Two railways has shrunk because they are no longer economical to operate, he said.