VIA Rail says there is no deal to restore passenger rail service on the Southern Railway of Vancouver Island, despite an announcement earlier today by the Island Corridor Foundation that it had reached a tentative agreement with VIA to bring trains back.

VIA spokesperson Jacques C. Gagnon said talks between the two parties are still underway, but no final agreement has been reached.

Earlier today the Island Corridor Foundation announced it had reached a tentative agreement with VIA Rail to restore the service.

View Royal Mayor Graham Hill said the deal was still subject to final approval from the ICF, which owns the track, Southern Railway which operates it, and VIA.

"They have made the business case and made the judgment that it is worth their while to do this business. Where they believe the business case is strong, that service will thrive," said Hill.

Once an agreement is in place, Ottawa and the province should release $20 million dollars in promised funding to fix the track, he said.

Hill said the foundation estimates the repairs will take nine months to complete, and the train would be based in Nanaimo, with early morning trains bound for Victoria.

But the announcement seemed to catch VIA off-guard, prompting the denial from Gagnon.

"We have some idea what was said, but VIA Rail wants to state clearly that discussions are ongoing and we haven't reached a final agreement, therefore there's no deal," said Gagnon.

ICF CEO Graham Bruce then responded, saying the agreement may still be subject to final approvals, but he remains confident those are coming.

The Island Corridor Foundation is made up of the Island's five regional districts and five First Nations.

Passenger service ended in 2011

VIA Rail pulled passenger service from a portion of the railway route in 2011 after a portion of the tracks became unsafe. And now, three years later, politicians who have been supplying money to help fund a return of service say they are frustrated by the lack of progress.

'We either need to get it going now or accept the fact it's no longer going to be on the island'- Nanaimo mayor John Ruttan

Earlier in the day Parksville Mayor Chris Burger expressed frustration with the lack of clear information about the negotiations.

"This is a classic example. We're on the eve of some sort of an announcement, and as one of the owners of this corridor we haven't had the courtesy of being informed as to what that might be," he told CBC News on Tuesday.

In February the Regional District of Nanaimo voted to stop contributing its million-dollar share of the ICF's budget over the lack of progress bringing VIA Rail back to the table.

Nanaimo Mayor John Ruttan said earlier that unless today's announcement includes both enough money to fix the track and bridges and a clear commitment from VIA to return, this may be the end of the line.

"We either need to get it going now or accept the fact it's no longer going to be on the Island," said Ruttan.

Two years ago, things seemed to be looking up for passenger rail service on Vancouver Island.

In 2012, the federal government announced it was contributing $7.5 million to repair the old E&N railway line that runs from Esquimalt to Courtenay, matching a $7.5 million commitment made by the province a year earlier.

The ICF brokered the deal. At the time, CEO Graham Bruce said service could resume in 18 months. That was 2012 and it still hasn't happened.

Part of Confederation deal

The E&N railway — once known as the Esquimalt and Nanaimo — has a long history that dates back to 1871, when the federal government agreed to build a railway as part of the colony of British Columbia's decision to join Confederation.

The line, which is now officially called the Southern Railway of Vancouver Island, runs from Victoria north through Nanaimo to Courtenay, with branch lines to Parksville and Port Alberni.

The route changed hands several times as a range of companies tried and failed to make it profitable. The once daily passenger service was operated by VIA Rail.

In 2006, the route was donated to the Island Corridor Foundation, a registered non-profit foundation created by local municipalities and First Nations to preserve the rail corridor.

In 2008, Transportation Minister Kevin Falcon announced a half-million-dollar study to look at the options for commuter rail and freight on the historic route.