Friday, January 24, 2014

CN, Province of New Brunswick reach accord on Newcastle Subdivision

Written by  William C. Vantuono, Editor-in-Chief
CN, Province of New Brunswick reach accord on Newcastle Subdivision Stephen C. Host
CN and the Province of New Brunswick have reached an agreement to preserve rail freight service on two sections of the railroad’s Newcastle Subdivision in northern New Brunswick. CN had previously sought to abandon 139 miles of the Newcastle Subdivision, which it acquired as part of its takeover of Quebec Railway Corp. in November 2008.

Under the agreement, the Province of New Brunswick will invest up to $25 million in rail infrastructure improvements to the Newcastle Subdivision. CN will in turn spend a comparable amount to maintain and operate the line, ensuring continued rail freight service for a 15-year period on the northern and southern sections of the line: between Irvco, N.B., and Nepisquit Junction, N.B., in the north, and between Catamount, N.B., and Nelson Junction in the south, where there are active rail freight customers. The province’s investment “will be used to rehabilitate and upgrade the rail line to the operating standards required to efficiently and cost-effectively handle current and projected traffic,” CN said. Work will commence in the spring of 2014.

CN will seek to discontinue rail operations on the 44-mile middle section of the Newcastle Subdivision, between Nelson Junction (milepost 62) and Nepisquit Junction (milepost 106), “due to the significant investments required to maintain the line and the lack of both originating and terminating freight traffic on that section.”

CN said that before this part of the Newcastle Subdivision can be closed “it will be offered for sale in early February to private interests and then to municipal, provincial, and federal levels of government, as per the provisions of the Canada Transportation Act.” There will be a five-month window to submit offers to purchase this section, “should there be a desire to maintain rail service on the segment.”

New Brunswick Premier David Alward joined CN Executive Vice President Corporate Services and Chief Legal Officer Sean Finn in Miramichi, N.B., for the announcement.

“We thank the provincial government for working with us over the past year to develop this agreement that will preserve rail freight service in northern New Brunswick,” said Finn. “This agreement would not have been possible without the commitment of both parties to continuing investments and to the growth of rail freight traffic in the region. CN, the province, and local businesses will continue to work together to increase freight traffic in future years.”

“Freight rail is a critical mode of transportation for industries in northern New Brunswick, and it is a vital lifeline for the jobs and communities that rely on these industries,” said Alward. “Our investment in the rehabilitation of two sections of this railway line ensures that companies in northern New Brunswick can continue to ship their goods to market efficiently and explore new opportunities for growth.”