Oil-backed iChurchill group pulls out of Omnitrax negotiations

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This article was published 22/05/2018 (2729 days ago), so information in it may no longer be current.

OTTAWA — A Calgary-based group that hoped to take over Churchill’s railway shelved its takeover bid Tuesday, just three weeks after going public, accusing Ottawa of favouring local groups.

“We’re disappointed; we feel that our proposal is the most likely to get the railway repaired,” Louis Dufresne, head of the iChurchill, said Tuesday.

iChurchill emerged in a May 1 press release, declaring it was in talks with Denver-based Omnitrax to take over the Hudson Bay Railway and shuttered Port of Churchill, with support from businessmen from the oil industry.

The bid had surprised federal bureaucrats, who since September had been working to arrange a business plan with northern Manitoba groups and help pay to get the assets into their hands. They suspected the other bid was Omnitrax’s way of extracting leverage in the negotiations — something the company denies.

Since last fall, Ottawa has said it will only support a group’s takeover bid if it met three conditions: a business plan, a reasonable cost for the assets, and buy-in from the Indigenous groups and towns along the line.

Federal negotiator Wayne Wouters has been leading talks with a consortium comprising all communities along the Hudson Bay Railway as well as ones near The Pas, to design a business plan and cut a deal with Omnitrax.

iChurchill claimed it had local First Nations support, but refused for weeks to say who was on board.

Peguis Chief Glenn Hudson was leading that outreach, and said Tuesday he’d reached out to nine First Nations along the line, but still wouldn’t say how many of those had actually signed on.

“We decided to pull out of the negotiations,” said Hudson, claiming iChurchill “wasn’t able to get things in place to be able to get the rail line up and running this year.”

But Dufresne blamed Ottawa for the lack of progress. He claimed Omnitrax had reached out to the federal government in March on iChurchill’s behalf – without disclosing whom the partnering group was – and requested a meeting with Wouters, to no avail.

He said iChurchill reached out directly to Wouters around the time of the May 1 news release, and when they finally met last week, Dufresne said it was clear Ottawa was set on supporting the existing consortium.

“We’re dealing with that interference from the government, and (we’re) essentially disappointed that not everyone involved has the same sense of urgency we do,” he said, noting Wednesday will mark a year since the railway’s May 23 washout.

The federal government wouldn’t get into specifics about its talks with iChurchill. “No negotiations with any parties will be conducted in public,” wrote Alexandre Deslongchamps, spokesman for Natural Resources Minister Jim Carr.

Dufresne said his group had already paid Omnitrax an amount he wouldn’t disclose to prepare legal documents, as well as a tendering process for repairs along the line, including engineering assessments. He said Omnitrax gave his group access to thousands of documents and datasets.

“Blacklines were being exchanged between the lawyers,” he said, referring to the advanced stage of authoring corporate-takeover documents. “To our knowledge, our proposal is the most likely to get the railway repaired this summer.”

Federal bureaucrats familiar with Wouters’ ongoing negotiations said they are expecting the bid partner AGT Foods to use the equipment from its existing short-line railways in Saskatchewan to speed up repairs along the Hudson Bay Railway, if they can get an ownership transfer imminently.

In a statement, Omnitrax’s Canadian head, Merv Tweed, repeated previous remarks that the company is willing to work with any potential buyers. “We remain committed to working expeditiously to arrive at a solution that would allow the railway to be repaired this season,” he wrote.

iChurchill was one of two groups to emerge this month as vying for a takeover of the railway and port. The Chinese firm Herun Group has a partnership with the Manitoba Metis Federation and has been in preliminary talks with Omnitrax.

Dufresne said Tuesday he’d only learned about the Herun Group through media report, but had nothing negative to say of Omnitrax.

“We’ve found them to be very professional and responsive.”

dylan.robertson@freepress.mb.ca