CANADIAN NATIONAL clinched two major sales of loss-making railway in the week before Christmas, both involving RaiLink Ltd. This brings the total length of route which Canada’s principal short line operator manages directly or through its 25% shareholding in Quebec Railway Corp to more than 2800 km, comfortably exceeding BC Rail’s 2221 km.
In terms of turnover, BC Rail remains the third biggest operator after CN and CPR, hauling more than 8billion tonne-km a year on a unified network. But RaiLink will have seven companies scattered across four provinces in its portfolio when it takes over 1025 km stretching from Smith, 210 km north of Edmonton in Alberta, to Hay River on the remote Great Slave Lake in the Northwest Territories on March 1. This includes the branch to Hines Creek. CEO Gordon Clanachan expects to see RaiLink’s turnover more than double to reach C$46m this year.
It all started 12 years ago when Tom Payne, now a Vice President of RaiLink, launched Central Western Railway with 169 km of ex-CN route in Alberta. Although the labour protection regime in Canada was hostile to the spinning off of short lines which was then commonplace in the US, the company expanded in 1992 and now operates 318 km with 11 employees. The Ottawa Valley in Ontario, another RaiLink subsidiary, operates 621 km leased from Canadian Pacific Railway or using trackage rights.
Quebec Railway assumed control from CN on January 19 of 485 km between Mont-Joli, Quebec and Moncton, New Brunswick. This has been split between two new short line subsidiaries, one of which connects with one of the two short lines QR already owned. Whatever the rationale behind this fragmentation, together the four QR companies are expecting to handle 50000 loaded wagons this year.
One thing is sure. Both CN and CPR are a long way from completing their divestment of unprofitable lines, and RaiLink looks set to grow larger still. o
