From the Sault Star:

ACR passenger rail service officially ceases Wednesday, July 15, 2015.

It’s the second time this year that passenger train service between Sault Ste. Marie and Hearst, Ontario has been threatened to come to a screeching halt.

Last week’s announcement that Railmark had not been able to meet the precondition of securing a line of credit for the operation and would not be running the passenger rail service after July 15 means it’s back to the drawing board for the stakeholder working committee in search of a new third-party operator.

Economic Development Corp. CEO Tom Dodds said late Tuesday that the train will stop on Wednesday.

In the meantime, Mayor Christian Provenzano, and Dodds, in his position as chair of the stakeholder working group, are both penning letters to CN Railway, requesting that they consider operating the service on an interim basis until a new operator is found.

“We know CN doesn’t want to run a passenger service but we’re trying to thread something together that will see the operation of the train for a period of time while we can work together and find an operator,” Dodds said.

CN Rail could be the recipient of the federal government subsidy provided to operate the train.

“We appreciate that they don’t want to run the train full time. That’s why we began this process but unfortunately, it didn’t net us the result we were looking for,” Dodds said.

CN Rail was ultimately responsible for choosing the third-party rail operator.

It was the city who chose not to sign a contractual agreement with Railmark because it failed to meet a precondition of securing a line of credit of about $550,000 – or three months of operational costs.

Dodds said that work is being done to rework the expression of interest and request for proposals into one document in an attempt to get interested parties to submit a proposal and business plan.

“We’re hopeful that we can drive to a quicker solution because we’ve been done this already,” he said.

Of the original 20 or so expression of interests that were initially received, four serious applications were received.

Of those, one proponent revealed he didn’t have the experience required and withdrew.

Eventually, Railmark had been selected.

Dodds said media reports about the situation have created a renewed interest in the route again.

The reinstatement of the federal government funding also offers more hope that another viable proposal will come forward, he said.

“The reality is we need someone who can pick up and run that train Thursday, but I have no sense right now if that is possible or not,” he said. “CN has been given the information and they need to make their decisions internally.”

The ideal candidate would be a current Canadian operator who already has the licencing and insurance requirements needed to run the service.

Also needed is enough trained rail crews to ensure that standards are met and relief engineers are available to meet the ‘go slow’ orders on the track.

Familiarization of the line also becomes an asset with those orders.

But Dodds said all options will be explored.

Sault MP Bryan Hayes said he hasn’t been officially asked to do anything at this time but has been involved in the process since the beginning and will continue to serve as an intermediary between the working group and Transport Minister Lisa Raitt.

“The stakeholder group is going to continue to work with Transport Canada officials to develop a solution,”Hayes said.

“I have been assured by Minister Raitt that the money is still there but we want to find a qualified operator. It’s unfortunate that things didn’t pull through with Railmark.”

Hayes said if a new operator is found, the same due diligence process will have to be undertaken by the federal government, ensuring that a viable business plan is in place.

“Whoever comes forward still has to have a business plan that makes sense to the federal government. We want long term sustainability without ongoing requirements of federal funding down the road,” he said.

Hayes said he will support the city and the stakeholder group and do what he can to assist from the federal government perspective.

He too expressed hope that CN considers running the train service in the interim.

“They have expressed that they are not interested in the passenger service. . . They continue to be supportive of a third party operator but I hope in the interim, they step up because if they don’t, it will shut down until we find a third party operator,” he said.

Railmark provided the passenger train service since May 1 without any government subsidy because the agreement had never been signed.

Dodds said that to his knowledge, there has been no request or action from Railmark to receive funding.

“I don’t know of his intent but there was no agreement in place and there never was,” Dodds said.

Source: http://www.saultstar.com/2015/07/14/acr-stakeholders-back-to-the-table

From the Sault Star:

SAULT STE. MARIE, ONTARIO – Al Errington is simply steamed that passenger train service between Sault Ste. Marie and Hearst will cease July 15.

“We need somebody with the financial resources and the personnel resources to operate that passenger train well,” said a “very aggravated” Errington, Coalition for Algoma Passenger Trains (CAPT) co-chair and owner of Wilderness Island Resort, responding to CN Rail’s announcement that the termination stemmed from the inability of the train’s current operator, Railmark Canada Ltd., to obtain financing.

Errington has been a vocal critic of the Michigan-based outfit, questioning everything from past practices to staffing levels, pointing to a lack of engineers or crew numbers certified to run the train, forcing operations to stop after the maximum 12-hour, working-day limit is reached.

“Railmark has been a disappointment since they started operating,” he said.

CN officially discontinued its operation of the passenger train on May 1.

Things appeared more on track in April, when Transport Canada announced that Railmark had received its certificate of approval to operate on new legislation, only days after Transport Canada Minister Lisa Raitt announced that the government would provide $5.3 million over three years for the continued operation of the passenger rail service. The money was to be filtered through the City of Sault Ste. Marie with logistical agreements made between the city, Railmark and the government.

CN continued operations for the following few weeks as the transition unfolded.

The subsequent ride has been far from smooth. In late June, city council, on the recommendation of the Sault Ste. Marie Economic Development Corp., opted not to sign a contribution agreement with Railmark because the company was unable to secure a line of credit equivalent to three months of operating expenses, as required in a pre-condition. Railmark said the average monthly billing for federal subsidy is about $183,000 per month and, based on that, it was determined a line of credit of about $550,000 would be required.

Errington said the city was correct in its decision.

“There should be no risk to Sault Ste. Marie,” he added. “If there is risk, there is something wrong about the deal.”

Railmark president Allen Brown told The Sault Star then he was determined to continue to operate the passenger service and work toward meeting pre-conditions.

When reached by the Star Friday afternoon, Brown didn’t say much.

“I don’t really have any comment until after Monday night,” he said, referring to the update city council is slated to receive on the matter — this was planned prior to this latest development — during the regular council meeting.

Linda Savory-Gordon, a CAPT co-chair, said she expects EDC CEO and stakeholder spokesperson Tom Dodds to ask council for its support in efforts to lobby the federal government and CN. Dodds could not be reached for comment Friday.

A working group steering committee, formed more than a year ago to save the train service, was to have met last Monday to determine how to get the complete service running again.

Many saw more red flags when it was reported last week the ACR passenger train had not been running on the southern portion of the route, between Sault Ste. Marie and Hawk Junction, since June 25.

The newly christened Algoma Spirit Passenger Train continued regular service between Hawk Junction and Hearst with Brown explaining the move was to keep the operation flowing more quickly in the face of “go-slow” orders. The order, which allows trains to only travel on part of the line at 10 miles per hour instead of 30 miles per hour, was due to train conditions and the heat of the track.

“That was just shocking,” said Savory-Gordon.

Transport Canada “made it very clear,” she said, that funding was for service between the Sault and Hearst.

“That doesn’t mean you can decide to do just half of it.”

Errington branded the service disruption “a message that there were management problems.”

Savory Gordon said it’s Transport Canada’s job now to “apply pressure” on CN to run the train until another operator is chosen.

“(CN) says they are no longer running it and they don’t have to,” she said, adding CN’s reluctance to operate the line was “more understandable” when, in 2014, Ottawa chopped a $2.2-million annual subsidy.

“But now the funding is there, so there’s really no justification for it,” Savory-Gordon said.

“I don’t see, even if there’s some legal hitch, how they can morally refuse to allow that to happen on their line.”

CN has confirmed it, the ACR Passenger Service Stakeholders Working Group and Transport Canada, have been in “regular discussions” and continue to explore short- and long-term solutions.

However, the company has been steadfast in the past it is not in the passenger rail business and no longer wants to operate the service between Sault Ste. Marie and Hearst.

This stand appears not to have changed.

“We will continue to work with the stakeholder groups and with Transport Canada to find a long-term solution,” Mark Hallman, CN’s director of communications and public affairs, told The Sault Star Friday when asked if CN would take over running the route. It will continue to operate the Agawa Canyon Tour Train daily for the season ending Oct. 12.

Errington said he does have “sympathy for (CN) in that regard.”

“Passenger trains do not fit their culture,” he added. “We don’t want them operating the passenger train either, but we need more co-operation in making sure we have an effective operator of the passenger train. I hope we can find one quickly with the co-operation of CN.”

As for recruiting Railmark, CN insists it did its job.

“During the processes in which we were looking for a third party to take over, CN did its due diligence in terms of looking into the company and selected it as the best that was available at the time,” Hallman said.

“There have been, clearly, issues between Railmark and the municipality in terms of finding a funding mechanism, but that doesn’t involve CN.”

CN is required to ensure continued operation of the Agawa train as a result of contractual agreements it has based on 2008 Northern Ontario Heritage Fund Corp., funding the train received for upgrades to its coaches and the installation of an audio-video system. NOHFC provided $5 million toward a $10-million train refurbishment and revitalization project in the hopes of increasing tourism.

CN indicated in June it seeks a third-party with secured financing to acquire the Agawa Canyon Tour Train and would consider all qualified operators with suitable committed financing.

“I guess because they don’t have a legal obligation to us and to the stakeholders that depend on that passenger train, they don’t treat it with as much respect,” Errington said.

Stakeholders along the route, including property owners, outfitters, tourist operators and small communities, say the continued service is essential to them.

The recent disruption to the route’s southern portion stymied tourism, many reported.

“It hasn’t been a very nice year and this was shaping up to be one of the best tourism years in over a decade,” Errington said.

“And the fact it could end up being a very negative year and possibly a devastating one for businesses like mine, is not good for the local economy.”

Now, the service’s entire cancellation spells not only lost dollars, but threats to the well-being of those who use the line to reach remote destinations, both Errington and Savory-Gordon contend.

“We consider it a really serious crisis because there are people totally in a mess,” Savory-Gordon said. “I even heard of somebody who needed medication and it couldn’t be delivered by train. It is a terrible mess.”

Technically, Railmark Canada can effectively shut down its operations immediately, leaving stakeholders along the line stranded and without service.

Errington, whose tourist resort along the ACR relies on the passenger rail service to transport guests to and from the operation, said people are “cut off here” and are without cellphone service.

“There could be canoeists out there on a two-week canoe trip,” he said. “They come to the train and they’re waiting there. ‘Well, where’s that train?’ This is a wilderness area and trains are supposed to be reliable and that’s what we need.” He questions the quality of the last remaining week of service.

“Are we going to have trains going or not?” he said. “Trains are supposed to be the essence of reliability. At one time, people used to set their watches by trains going by.”

Source: http://www.saultstar.com/2015/07/10/stakeholders-steamed-passenger-train-service-between-sault-ste-marie-hearst-to-cease-operator-mum