Hey there, time traveller!
This article was published 5/6/2017 (1269 days ago), so information in it may no longer be current.
A deal to sell the Hudson Bay Railway and Port of Churchill to Missinippi Rail Consortium may be imminent, Omnitrax Canada said Monday, but there is still work ahead to secure funding.
To help close the deal, Omnitrax Canada president Merv Tweed said the company is prepared to provide a loan to the group — led by Mathias Colomb Cree Nation Chief Arlen Dumas — which he said is "something like" $20 million.
"(Dumas) has got the money so we are going to complete the transaction," Tweed said.
Both Tweed and Dumas have been saying since the beginning of 2016 that a deal was near, but Tweed sounded more certain than ever Monday.
The two sides had signed a formal memorandum of understanding in December 2016 and on Monday Dumas said, "We have now come to an agreed-upon amount ($20 million) of what we believe the assets are worth and what the transaction will cost."
But that said, Dumas believes the support he thought he had in hand from Western Economic Diversification is now off the table.
"The last two years, the government has been engaged and led me to believe that they wanted to be a meaningful partner and make a contribution to this initiative," Dumas said.
"We were under impression we had a good, healthy working relationship with the federal government but as of last Thursday they informed our representative they were no longer interested in supporting this initiative for northern Manitoba," he said. "I am quite shocked that the feds would do such an irresponsible thing."
Dumas said there are other "opportunities" available but was vague as to what they would be.
However, Tweed was still prepared to say Omnitrax had a deal in hand.
"It’s taken a lot longer than we thought," he said. "We pushed the ball to the finish line. We are happy about that and the people in the north are, too."
The last part of that statement might not be whole-heartedly endorsed by all, however.
Dumas has led a consortium of Northern First Nations in efforts to acquire the railway and port for almost two years.
But a competing group calling itself One North emerged in March claiming broad support from municipalities and First Nations along the rail line as well as the Kivaliq region of Nunavut. Opaskwayak Cree Nation Chief Christian Sinclair, one of the organizers of that group, said many of the communities that once backed the Dumas group’s efforts are signatories to the One North initiative and don’t support Missinippi any longer.
An imminent sale was news to staff in federal Economic Development Minister Navdeep Bains’ office on Monday.
"This really caught us off guard," one said. "It is really interesting in that our officials are engaged regularly on a more-than-weekly basis with Omnitrax lawyers."
He said Bains’ office has been seeking a long-term resolution to the uncertain future of the railroad and port and that there had been a good flow of information, even though Bains’ office has not been privy to valuations or financial information from Omnitrax.
"So, this information not being shared in advance (that a sale was imminent) and having to hear about it from the media was a little surprising," the official said.
The railroad is now dealing with a disruption in service due to severe flooding, but Tweed said there had been quite a bit of interest in shipping grain this year after last season’s shipping season had been cancelled because of poor demand and most of the staff at the port laid off last summer.
"We have enough product there right now (at the Churchill grain terminal) and we have one ship booked," Tweed said. "We were hoping for a lot more. Interest was as high this year as it’s probably ever been. You start building momentum and all of a sudden this (flooding) hits."
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.