Canadian Pacific wants back into the Port of Saint John
Canadian Pacific in the process of buying Central Maine and Quebec Railroad
Twenty-five years after selling off or abandoning its rail operations to the East Coast, Canadian Pacific Railway is moving back into the region with the purchase of close to 800 kilometres of track leading deep into the state of Maine.
A deal to purchase the Central Maine and Quebec Railway is expected to close over the next few weeks.
The operation, with track through Lac Megantic, Que., to Brownville Junction, Maine, has several branch lines.
In a statement, the company specifically mentions access to the Port of Saint John as one of the reasons for the purchase.
"The end-to-end transaction will provide CP customers with seamless, safe and efficient access to ports at Searsport, Maine, and to Saint John, New Brunswick," the release said.
Would work with Irving railways
Access to Saint John would be via Irving-owned Eastern Maine Railway and its sister company, NB Southern Railway tracks that will link to the new CP rail terminus at Brownville Junction.
Mary Keith, spokesperson for the two Irving railways, said in a statement that NB Southern Railway had a "strong" relationship with Central Maine and Quebec Railroad and "will look forward to working with all our supply chain partners."
Keith said CP would drop rail cars coming to Saint John at Brownville Junction, where they would be taken over by the Irving railways.
Canadian Pacific's renewed interest in East Coast ports is not surprising to Jim Quinn, the CEO of Port Saint John.
He said there's been talk about it for several years.
"It's an interesting development, there's no mistake about it for us, it's an interesting development that we're just trying to get our heads wrapped around in terms of what they may or may not have in mind," said Quinn.
Benoit Poirier, a Montreal based analyst with Desjardins Capital Markets, applauded CP's move, noting the global port operator DP World runs the container, bulk and breakbulk terminal at the Port of Saint John.
"The acquisition will expand CP's reach in eastern Canada by providing access to three new eastern ports," Poirier said in a report to investors.
"In the long term this should enable CP to diversify its exposure away from China (served by West Coast ports) as manufacturers relocate their factories to European and other Asian countries such as Vietnam, Malaysia, India and Thailand (served by East Coast ports)."
Some of the newly purchased track historically belonged to CP.
Abandoned region in 1990s
The company sold off its operations in the Atlantic Region in the early 1990s.
That included the company's eastern mainline to Saint John, including a Via Rail passenger train, which ended service in December 1994.
In 1995, with most of its business centred in the West, CP then closed its Montreal headquarters and moved to Calgary.
In 2013, the former CP track at Lac Megantic was the scene of a rail disaster that killed 47 people.
At that point, the rail line was owned by the Montreal, Maine and Atlantic Railroad, which later filed for bankruptcy.
The train had 74 tank cars carrying western crude oil to Saint John's Irving Oil Refinery.