OmniTrax selling Port of Churchill, Hudson Bay rail line
Late grain harvest led to 2015 northern shipment shortage, put strain on business, president says
The Port of Churchill and accompanying Hudson Bay Rail line are up for sale.
Denver-based OmniTrax has operated the Port of Churchill and the rail line since 1997, but a slump in grain shipments has put a strain on the operation and its 80 employees.
"They've got it on the block and they're wanting to dispose of both assets," Churchill Mayor Mike Spence told CBC News. "My understanding ... was they wouldn't separate the port and the rail they would sell it as an integrated system."
The port has taken in 186,000 tonnes of grain this year — down from an annual average of 550,000 tonnes in annual grain shipments to the northern terminal, Spence said.
OmniTrax is expected to release details of plans to sell on Wednesday.
Spence said there have been expressions of interest and he's hopeful OmniTrax's decision to put it up for sale will turn things around for the port and the rail line, which he calls a vital link to northern communities.
"It plays a critical role in maintaining the rail line ... the importance of tourism in the community, the importance of local residents travelling to places like Thompson and Winnipeg," he said.
"Naturally, if there's new ownership you'll look at the model that needs to be successful, so I believe that it can be accomplished by working with other companies to make it happen."
Government support for port
OmniTrax president Merv Tweed has told the federal and provincial governments that the company needs financial help to operate in the north and refuses to continue to operate at a loss.
"If we're seen as a social service to the north, which I think we are to some degree, than I think governments need to be prepared to support that," Tweed told CBC News in an interview last week. "I hope that they see the value of the port and the value of the services provided to the other communities that we service. We service a lot of First Nations communities and we are their only source of transportation to a centre.
"If governments want that to continue, which I believe they do, then I believe they should be a participant in the costs of that and we've explained that very clearly to them. We've shown them the costs of doing business in the north and we hope they respond," Tweed said adding "the clock is ticking."
In light of challenges faced this year, Tweed said the company took the opportunity to make some upgrades.
"When you have a slow season, it doesn't mean you stop working, it means you do other things," he said. "We've improved our performances on the track, upgraded our track and made some major investments in the port as well.
"Our tracks are, I'm told, in as good as shape as they've ever been."
The company typically invests between $5 million and $6 million in rail line repairs annually, Tweed said.
Tweed said the company has always had its struggles associated with operating in the north.
"It's been a challenge every year, regardless of who the producers or suppliers of the product are," Tweed said. "I think in the last couple of years, we've shone a hard light on it and said, 'We can't do this anymore.'"
Despite the low volume of available grain this year, Tweed said the company expects harvest amounts will grow next year and lead to northern shipments within the 500,000-tonne range again in 2016.
With files from CBC's Karen Pauls and Jill Coubrough