Pallister points at Ottawa for rail line fix

Premier Brian Pallister says it's Ottawa, not Manitoba, that must take the lead on decisions about repairing the flood-damaged rail line to Hudson Bay.

Pallister, who made the remarks following a meeting of premiers in Edmonton, said the rail line and port of Churchill are linked as a federal issue.

"Where we're going with Churchill will depend to a great degree where the federal government wants to go, with respect to what was always a public utility for many, many years, and that's the port and of course the rail line in addition to it," Pallister said.

Denver-based Omnitrax Rail gave a technical briefing Tuesday, saying the tracks could be fixed by November and estimating the cost at between $20 and $60 million. 

However, Omnitrax senior management says it can't pay for the repairs, calling the rail line "a public utility."

• Omnitrax says it can't pay up to $60 million to repair rail line to Churchill

A statement by a spokesperson for federal Transport Minister Marc Garneau on Wednesday pointed the responsibility for the line directly back at Omnitrax, saying it had an obligation due to funding agreements going back to 2008.

"Under the 2008 agreement, Omnitrax cannot significantly reduce, discontinue, abandon the Bay Line or other Fixed Assets," the statement said.

Under the 2008 agreement, Omnitrax cannot significantly reduce, discontinue, abandon the Bay Line or other Fixed Assets.- Spokesperson for federal Transport Minister Marc Garneau

"While business decisions related to operations and maintenance of these assets fall under Omnitrax's discretion, the company is bound by the terms and conditions set out under both agreements with the Government of Canada."

The federal government provided Omnitrax with $20 million (over five years) and a further commitment of  $4.1 million for the Port of Churchill to "ensure that the port remains in adequate operating condition."

Manitoba has also contributed millions in subsidies to Omnitrax and is in a legal battle for non-payment for the company's losses.

• Churchill port and rail operator sues government for losses

The Progressive Conservative government had said several times it was waiting for the repair assessment from Omnitrax before weighing in on what Manitoba might contribute. Now, Pallister said, Ottawa must signal its intention first.

"We need to know what the federal government's intentions are before we can move forward with any confidence or any defensible investment; that is absolutely essential," Pallister said.

On Tuesday, Manitoba Infrastructure Minister Blaine Pederson called Omnitrax's assessment of the damage and the cost to fix the line "clearly inadequate."

When asked to explain further what was "inadequate" specifically with the company's assessment, Pederson issued a statement Wednesday calling it a "preliminary estimate."

'Notable issues in the briefing provided by Omnitrax include the imprecise cost estimate, which was given in the absence of a completed engineering assessment and unknown nature of contractor bids," the statement said.

"Additionally, they provided a nominal 60-day plan for completion without consideration for complications, risks and variables to achievability."

Notable issues in the briefing provided by Omnitrax include the imprecise cost estimate, which was given in the absence of a completed engineering assessment and unknown nature of contractor bids.- Spokesperson for  Manitoba Infrastructure Minister Blaine Pederson

In another development, a deadline set by Omnitrax is looming. Company executives said they must know by around Aug. 1 whether to proceed with repairs if they are to be completed before winter.

The region's MLA, Liberal Judy Klassen, issued a statement calling on the province to hold an emergency meeting on the crisis.

"How can the premier justify what's happening to the people of Churchill and surrounding communities? They are Manitobans. It's unacceptable and downright unfair to subject residents to soaring food prices, fuel shortages and job losses. Brian Pallister is turning his back on hundreds of Manitobans," Klassen wrote.