VANCOUVER, British Columbia — A maverick Prairie railway lost its bid on Tuesday to have its trains run on tracks owned by Canada’s largest railroad, Canadian National Railway Co., to haul grain to the Pacific coast, according to a Reuters report.
The Canadian Transportation Agency, in a split decision, said Ferroequus Railroad Co. failed to show a public need to gain access to CN’s tracks and had an “overly optimistic business plan” that might cause service disruptions.
Ferroequus was seeking “running rights” over 1,900 kilometers (1,200 miles) of CN track to haul about 800,000 tonnes of grain annually from Camrose, Alberta, to the port of Prince Rupert, British Columbia.
The Edmonton, Alberta-based company, which would collect the grain from lines operated by Canadian Pacific Railway, argued its plan would offer farmers lower costs and generate about C$22 million ($14 million) in annual revenues.
Both CN and CP had strongly opposed the request, which some analysts said was akin to efforts by small telecommunications companies to lease lines from major phone companies in order to sell competing long distance services.
The transportation regulators said they had the authority to force railways to grant running rights to competitors, but could only do so if there was a clear public need for increased competition.
“Ferroequus has not established the existence of a rate or service problem in the relevant markets, nor has it established that the granting of running rights would eliminate or alleviate any lack of adequate and effective competition,” the agency wrote.
Ferroequus’s plan had the backing of the Canadian Wheat Board, the massive grain marketing agency that has a government granted monopoly on all western Canadian wheat, barley and durum destined for export.
CN had dismissed Ferroequus’s plan as unrealistic, and complained the small company was a “virtual” railroad that lacked any engines or rolling stock to haul grain. CP also opposed the application.
“Why should other railroads be given the right to use our track? They did not build it. They do not maintain it. They are not responsible for the service it provides,” CN chief executive Paul Tellier told a speech in Calgary last week.
One member of the agency panel voted in favor of Ferroequus’s plan, saying the benefits of increased competition for the wheat board outweighed any disruptions the small firm’s trains might cause CN.