The deal will see Lashine, Quebec-based CAD Railway Industries Inc. act as the project manager and take over portions of the VIA Rail agreement; CAD will assume responsibility for Industrial Rail's contract and refurbish four rail diesel cars (RDCs) and 10 LRC (Light, Rapid, Comfortable) passenger cars.
The New Brunswick provincial government announced earlier this year it wanted a court-appointed receiver for Industrial Rail Services, saying the company failed to repay it loans. Moncton, New Brunswick-based Industrial Rail had a C$109 million contract with VIA Rail to refurbish 98 train cars.
An agreement reached on Monday says the company will remain under receivership with Ernst and Young. But the provincial government, which had backed Industrial Rail's original contracts with $20.5 million in loans and loan guarantees, likely will not recoup its investment.