Sault – Hearst Passenger Train: Saved Third Time ‘Round the Track?

CN’s recent announcement that they were discontinuing their relationship with Railmark, thus terminating passenger service along the ACR on July 15^th, 2015, may not have come as a shock to some of the key players involved in the search for a third party operator this past winter. Brown was unable to acquire the financing required to meet the terms of agreement with CN.

Allen Brown, Railmark Canada president, has a rough history of running other train outfits off the track. Under Brown’s management the Michigan Clipper Dinner Train was shut down due to poor ridership and increased costs in fuel and other expenses; Florida Rail Adventures went belly up and is divesting itself of equimpment; and the Columbia Star Dinner Train Inc. was just shut down in October 2014 after failing to properly maintain trains to resolve mechanical and engine issues including not winterizing the train’s engine. The city of Columbia, Missouri has Brown on the hook owing over $12,000 in unpaid utilities, rent and track usage.

Al Errington, co-chair of the Coalition for Algoma Passenger Trains, is befuddled that CN would have ever considered pursuing a working relationship with Brown.

“When you start speaking with other companies he’s dealt with there’s a management pattern. He’s taken viable hospitality trains and put them out of business in a matter of months. He doesn’t seem to have the financing that he says he has and then the management is just extremely erratic,” vented Errington.

Errington is also part of the local Working Group that worked alongside CN to find a third party operator.

“We didn’t pick Railmark. CN picked Railmark. We asked them to reconsider. We thought it was a weak choice but they said ‘no, he’s the guy. He’s got the finances to do it, he’s got the skills to do it’. But those weren’t the indications we were getting,” stated Errington.

Tom Dodds, executive director of the Sault Ste. Marie Economic Development Corporation and current interim Chair of the Working Group admits that the Group really didn’t have much say in the matter.

“We were certainly were aware of what the media reports were about Allen Brown. We’ve seen his actions as well –which is part of the reason why we are where we are now,” he acknowledged. “First of all at the outset we conducted a bit of due diligence, Transport Canada did their own due diligence but for the most part we relied on CN’s due diligence for no other reason than they have the greatest capacity to do it and secondly they have the greatest vested interest. You have to bear in mind this is CN’s railway, so in so far as we had an understanding that we would participate in the process at the end of the day they’re the ones that are going to enter into a legal agreement. We have no authority to say otherwise. We thought the other group -Iowa Pacific Holdings, was stronger. CN really felt there was only one acceptable choice from an operational standpoint from the proposal put forward. The outcome is that we accepted the inevitable.”

In speaking with CN spokesperson, Mark Hallman, on what was been perceived by various stakeholders to be a peculiar favouring of Railmark over any other options Hallman was elusive.

“We went through the process at the time and CN in its estimation did its due diligence and believed that Railmark at that time was the appropriate party to assume the passenger train service,” commented Hallman. “We’ve indicated that the company had subsequently been unable to obtain financing and the service will cease July 15^th. But as I said talks are ongoing with various stakeholders to find a solution.

When pressed as to whether CN was aware of Brown’s dicey luck with running passenger train service Hallman reiterated his previous statement. “I said CN did its due diligence and made its choice accordingly.”

To the casual observer CN’s decision to enter an agreement with Railmark seems like a reckless choice. The decision does raise a question, “Does CN really want to share their rails with passenger trains?”

Errington weighed in. “I have to say that there is a culture of anti-passenger train within CN- perhaps not across the board. But it’s present with a lot of freight rails. But I don’t think that’s the core of it though. For some reason they didn’t want to look at other operating organizations.”

Dodds believes that CN is concerned about passenger train service interfering with their freight service.

“But there really isn’t a lot of freight traffic on the ACR. It’s not an issue of passenger trains clogging up the tracks,” remarked Dodds. “I think the important consideration is what generates revenue for CN over time is the traffic volume. So if you take away the passenger service then that’s one less source of revenue for CN.”

The only passenger service that CN operates is the Agawa Canyon Train Tour. Hallman had no problem expressing that CN wants out of the passenger train service entirely.

“CN’s core business is freight railway and that’s the reason why CN was trying to get back into pro quo business by getting these other two services run by other parties,” explained Hallman.

So CN wants to deal primarily with freight?

“Exactly,” replied Hallman.

Is it possible that CN didn’t want to see the passenger rail service survive along the ACR?

“I’m not going to speculate about the future,” replied Hallman. “As I’ve said, we continue to work with the other parties to see if we can get a solution.”

Dodds is confident that given enough time another third party operator will be secured. Dodds admitted that the Iowa Pacific Holding company has agreed to revisit the issue and that other company’s having begun contacting CN as well as himself to express interest in continuing the passenger train service.

“We are quite confident that we can do an expedited process to find a third party operator. The key piece of it is that on March 31^st, Transport Canada Minister, Lisa Raitt, announced that she was prepared to make a contribution of 5.3 million dollars over three years to support the effort and that’s huge in terms of going after the market again because they would know that money is in place,” remarked Dodds. “The other good news part of it is that we’ve had ongoing dialogue with Transport Canada and CN so the agreements and expectations that we have of a third party operator are very clear.”

Dodds went on to explain that next steps would be to sit down early next week to talk about quickly putting a plan of action in place to find a new operator. In the meantime, Dodds intends to ask CN to step up during the short-term.

“We are going to be asking CN -although they have told us ‘no’ verbally that they are not prepared to do this, if they can provide an interim solution between the 15^th of July and whenever we find a suitable third party offer that everybody has signed off on. It’s going to be tricky. They have said ‘no’ but we’ll ask them publicly and see what happens,” said a hopeful Dodds.

Dodds would like to emphasize to the community that the “good news” is that the right organizations are on top of this derailed mess.

“CN, senior levels of the Ministry of Transportation, the Working Group and the City have full attention on this. We’re working as hard as we can. Anyone will tell you that we’ve put in a remarkable amount of hours on this and we will continue to do so. Now that we’ve cleared the air with Railmark we may be able to get on with something productive.”

But when asked if CN was attempting to work on a last minute solution to save the agreement with Railmark, Hallman would not provide confirmation one way or another and replied, “As I’ve indicated we’re looking at a variety of options and a variety of solutions and I’m not going to characterize any one particular or series of options. We’re still in discussion.”

Though Allen Brown preferred not to comment to the Northern Hoot today he did provide that he did not consider himself out of the picture just yet. “We’re running trains this weekend and we’re getting people transported,” he said.

When asked if he there was a chance to salvage the derailed deal with CN he responded, “Well yes.”

Errington doesn’t think so though.

“The essential value of trains is that they are the most reliable means of transportation. They’re far more reliable than any other type of transportation. At one time people use to set their watches by the train schedule. And yet this one here -we don’t know if it’s operating or where it’s operating. That is not what train travel is about. It has to be reliable. And if it can’t run a reliable service there is nothing to build on,” stated Errington.

“This money was intended to run the train all the way down the line between the Sault and Hearst. That’s not happening under Brown’s management. Since Brown has taken over people haven’t been getting to their cottages,” he added.

Errington is also a tourist operator of Errington’s Wilderness Lodge. His own lodge as well as other outfitters in the area, have had to shift people onto planes to compensate for the unpredictable train schedule and also absorb cancellations. “Some people just won’t fly,” said Errington.

“He just doesn’t seem to be able to operate the service according to what the needs are. The funding is for service from the Sault to Hearst on Thursday, Saturday and Monday and from Hearst to the Sault on Friday, Sunday and Tuesday and he hasn’t been doing that. That’s devastated ridership,” opined Erringtion. “There are a lot of cottagers that haven’t been able to access their properties or have been stuck at their properties for long periods of time because the training wasn’t running. We just don’t know what’s happening day to day.”

Below is a brief history, prepared by Errington, of Railmark’s train service since they began operating the Algoma passenger service on June 18^th, 2015.

• Thursday June 18: Sault to Hearst run made it to Mead approximate 1/2 hour south of Hearst before running out of time.
• Friday June 19: Hearst to Sault train cancelled due to rail regulation violation investigation from June 18.
• Saturday June 20: Sault to Hearst train cancelled due to rail regulations violation investigation from June 18.
• Sunday June 21: Hearst to Sault train cancelled due to rail regulations violation investigation from June 18.
• Monday June 22: Sault to Hearst train cancelled due to rail regulations violation investigation from June 18.
• Tuesday June 23: Hearst to Sault train cancelled due to rail regulations violation investigation from June 18. Passenger train equipment pulled down to Sault Ste. Marie by CN freight train.
• Thursday June 25: Sault to Hearst train made it to Hawk Junction only. No train service Hawk Junction to Hearst.
• Friday June 26: Train went Hawk Junction to Oba, turned around and came back to Hawk Junction. No train service Hearst to Oba and no train service Hawk Junction to Sault Ste. Marie.
• Saturday June 27: Train left Hawk Junction for Hearst. Indications of overheating generator. Allen on train. No train service Sault Ste. Marie to Hawk Junction.
• Sunday June 28: Train left Hearst late due to generator not working due to lack of oil. Made it to Hawk Junction. No train service Hawk Junction to Sault Ste. Marie.
• Monday June 29: Hawk Junction to Hearst. Generator not working. No train service Sault Ste. Marie to Hawk Junction.
• Tuesday June 30: Maintenance people in Hearst filled generator with oil and got generator working. Train operated Hearst to Hawk Junction. No train service Hawk Junction to Sault Ste. Marie.
• Thursday July 2: Hawk Junction to Hearst OK but very late. No train service Sault Ste. Marie to Hawk Junction.
• Friday July 3: Hearst to Hawk Junction. Septic tank full because it had not been serviced in quite some time and train had to stop at Goudreau to allow female customers to go to the bathroom in the bush. Septic tank pumped out in Hawk Junction. No train service Hawk Junction to Sault Ste. Marie.
• Saturday July 4: Hawk Junction. Put some fresh water in reservoir and train ran to Hearst. No train service Sault Ste. Marie to Hawk Junction.
• Sunday July 5: Hearst to Hawk Junction. No train service Hawk Junction to Sault Ste. Marie.
• Monday July 6: Hawk Junction to Oba turn around and back to Hawk Junction. Generator not running. No train service Sault Ste. Marie to Hawk Junction and no train service Oba to Hearst.
• Tuesday July 7: No train. Plan was for train to run Hawk Junction to Sault but engine not working
• Thursday July 9: No train service Sault Ste. Marie to Hearst.
• Friday July 10: No train service Hearst to Sault Ste. Marie but passenger train did run from Sault Ste. Marie to Hawk Junction Friday afternoon. Not sure if anyone knew they could catch the train.
• Saturday July 11: ???? We have heard the plan is to run north from Hawk Junction, not sure how far, Oba turnaround again with no southbound Sunday or all the way to Hearst with southbound Sunday to Hawk Junction or maybe Sault Ste. Marie? Very likely there will be no train service Sault Ste. Marie to Hawk Junction.
• Sunday July 12: ????
• Monday July 13: ????
• Tuesday July 14: ????

Errington went on to explain that in his opinion Brown does not have enough engineers running the line and that the engineers who are running the track are not familiar with the rails between Sault Ste. Marie to Hearst.

“You have to be pretty skilled to take those curves and you have to know the track to complete the line in time. These engineers just don’t have the experience to do that.”