Lac-Mégantic still waiting for rail company to pay up

Lac-Mégantic's mayor says the town has yet to receive any reimbursement from the Montreal, Maine & Atlantic Railway for the millions of dollars already spent on cleaning up after the recent rail disaster.

Town has spent close to $8M on cleanup costs to date

Lac-Mégantic holds out

9 years ago
Duration 2:29
Devastated town tries to return to normal as it waits for news from MM&A.

Lac-Mégantic's mayor says the town has yet to receive any reimbursement from the Montreal, Maine & Atlantic Railway for the millions of dollars spent cleaning up after the recent rail disaster.

Legal notices were sent by both the town and the Quebec government over the past few days, asking the rail company to step forward and fulfil its responsibilities. The railway was expected to reply on Tuesday, after it asked for an extended deadline.

On July 6, a runaway MM&A train carrying crude oil careened off the tracks near the centre of Lac-Mégantic causing a series of explosions and a fire, which are believed to have killed up to 47 people.

Mayor Colette Roy-Laroche said Tuesday that the town has spent about $7,800,000 to pay eight different MM&A contractors for their cleanup efforts. 

The town had to pay more than $4 million earlier this month when crews working at the disaster site threatened to walk off the job because they weren't being paid. Roy-Laroche said the town has spent $3.6 million since then.

"Without the help of the Quebec government, the failure of the MM&A to fulfil its obligations would have put the town of Lac-Mégantic and its citizens into an intolerable situation," Roy-Laroche said.

MM&A says it's waiting for insurance money

The head of the MM&A told a New York radio station last week that his company's coffers have run dry.

Ed Burkhardt said the company's insurer has agreed it's liable for the costs, but that legal issues have held up the process.

"We're unable to fund that out of our own cash," Burkhardt said in reference to the $4-million bill from Lac-Mégantic, which has since climbed to $7.8 million.

More railway layoffs reported

Meanwhile, the railway is said to have laid off five more employees on Tuesday.

According to Radio-Canada, the union representing MM&A workers said the company is planning to lay off more employees in Quebec.

The cleanup of oil and other debris in Lac-Mégantic has cost millions of dollars so far. (CBC)

The union said the layoff of five Farnham-based employees means 24 of the railway's 75 employees in the province have lost their jobs since the rail disaster.

The U.S.-based company let go 19 Quebec workers earlier this month, citing the disaster's effect on its business.

The future of the railway is in doubt as it faces imposing financial hurdles — including several lawsuits and mounting environmental cleanup costs.

Petroleum firm objects to responsibility in Lac-Mégantic

A Miami-based fuel company that has received a legal notice to help pay for the cleanup in Lac-Mégantic said it was surprised by the request.

World Fuel Services Corp. is one of three companies that received a Quebec government legal notice on Monday demanding it pick up a portion of the cleanup tab.

Companies held responsible by province

  • Montreal, Maine & Atlantic Railway.
  • Western Petroleum Company.
  • World Fuel Services.

The petroleum-logistics firm was named in the order alongside its subsidiary, Western Petroleum Company, and the Montreal, Maine & Atlantic Railway.

World Fuel Services said it has sent its own environmental experts to monitor the progress of the cleanup efforts.

It said Monday's order is the first time the Quebec government has stated that World Fuel Services has any responsibility to pay for or supervise cleanup activities by crews under control of MM&A and local authorities.

The company said it will continue to meet obligations it may have with respect to the incident.

With files from The Canadian Press