The federal government has appointed a former top bureaucrat as an negotiator to help solve the Churchill rail issue and says it will help in finding a new owner for the line if the U.S.-based owner won't meet its contractual obligations.

Ottawa is dispatching the former Privy Council Clerk Wayne Wouters to work out differences between two competing groups interested in buying the rail line and the port from Denver-based Omnitrax and get a deal as soon as possible so the line to the northern Manitoba town can be fixed.

In a release from Natural Resources Minister Jim Carr Friday, the federal government said it hopes Wouters can bring together the interested buyers, the Province of Manitoba and the rail line's owner, Omnitrax, to find a solution.

In the meantime, winter is fast approaching and time to repair the flood-damaged line is running out.

"In the event that Omnitrax is not willing to satisfy its contractual obligations, the government will work to facilitate discussion for the transfer of the rail line to a new owner," the government's release said.

Because time is short, Ottawa is also now willing to consider "interim funding to ensure restoration of the rail service" if certain conditions are met, according to the release.

Senior executives at Omnitrax have said the company cannot afford to repair the rail line and considers it a "public utility."

"We are pleased that the Government of Canada has agreed to repair the line," Omnitrax Canada president Merv Tweed said in a email statement to CBC Friday.

"We are also pleased that the Government is willing to support the First Nations consortium in their effort to purchase the asset. We have come to a fair and reasonable agreement to transfer the assets to the Missinippi consortium and our mutual agreement is waiting only for federal government support."

Manitoba groups working to find ownership solution

Earlier this week, CBC News published a letter to the office of Prime Minister Justin Trudeau from representatives of Missinippi Rail and a group called One North. The letter says the two groups would work together to find an ownership solution.

Missinippi is led by Arlen Dumas, the former chief of the Mathias Colomb First Nation and now head of the Assembly of Manitoba Chiefs. Missinippi has a memorandum of understanding to buy the rail line and the port from Omnitrax for $20 million.

Dumas said he's pleased the federal government has appointed a distinguished negotiator and believes a deal could be close.

"I think Omnitrax, I think they're wanting a way out, a lot of us want them to be well on their way and I think this is the opportunity and hopefully everybody will get that same idea and make it happen."

One North is led by the mayor of Churchill, Mike Spence, and Opaskwayak Cree Nation Chief Christian Sinclair. It also represents several communities along the rail line to Churchill and has been doing economic development research into buying the facilities.

Omnitrax released a final engineering report this week pegging the repair cost for the line at just over $43 million. The report says the work must begin almost immediately if the line is to be fixed before winter arrives.

Parts of the line were flooded in late May, but now repair work has been completed.

Maybe 10 days left to reach deal: Spence

Churchill Mayor Mike Spence, who earlier this year predicted work would have to begin no later than Sept. 1 to have the rail line operating before winter, now thinks there is still time to get the repairs done before freeze up.

"Realistically I think we got another seven to 10 days," Spence said Friday.

"Once we get those shovels in the ground I think to get it to accommodate light rail traffic, I think we can still get there."

Friday's release from the federal government also said the Province of Manitoba needs to be a partner in a deal on Churchill. So far, Premier Brian Pallister has said ports and railroads are a federal responsibility.

In a statement Friday, Manitoba Infrastructure Minister Ron Schuler said the announcement is a good step.

"Our government has already signalled its support for Churchill with a commitment to make $500 million in investments in areas within provincial jurisdiction.... With each level of government doing its own part, we remain hopeful that the long-term future and prosperity of both Churchill and the communities served by the rail line can be secured."     

Grand Chief Dumas said with time short and an experienced bureaucrat in Wouters at the table, the province should be involved, or should explain why it's not.

"Once we bring forward a tangible option for the province to participate, they are going to have to. Otherwise the message will have to be shared with everybody that they are not wanting to participate," Dumas said.