Friday, December 08, 2006


BC Rail, the jewel that once was ours, and BREAKING NEWS 14 December 2006


Lawyers for Dave Basi, Bob Virk, Aneal Basi (BVB) will again go before B.C. Supreme Court Justice Elizabeth Bennett next week in another pre-trial hearing.

BC Rail figures largely in this affair. Some background data is given below, excerpted from a Canadian Transportation Act (CTA) Review Panel's report dated 23 February 2001. That date is important. The NDP government of Ujjal Dosanjh was still in power. The Gordon Campbell government was installed 3 months later after the election of May 17, 2001.

The CTA Review Panel had been asked (by whom, it doesn't say) to assess rail competition in Canada, especially the running rights and "other forms of access remedies."

The report says that these rights are significant for British Columbia because the Province owned the largest regional railway in Canada, BCRail. As such, BCRail was a strategic resource for the province.

BC Rail was Canada's 3rd largest railroad by revenues, operating 2,315 kilometers of mainline track and 740 kilometers of industrial and yard track throughout B.C. In addition, BCR had a 37 kilometer line connecting CN, CP, Burlington Northern Santa Fe (BNSF) to the West Coast's largest coal terminal and Deltaport container terminal at Roberts Bank.

BC Rail was provincially regulated and competed fully within the private sector in a market environment without government subsidy.

Freight traffic involved 200,000 revenue carloads annually from over 200 customer facilities. In 1999, forestry, mining, energy, and agricultural products made up 80% of the $329 Million annual revenue.

The overwhelming percentage of BCRail tonnage was transported beyond BC's borders. 40% of BC Rail shipments were forwarded to other North American railroads. By contrast, loaded rail cars forwarded to BCR by other railroads accounted for only 2% -- an imbalance which results in an inordinate number of train miles without revenue loads.

BCR's only direct rail link was with CN at Prince George and Vancouver. CP and BNSF were accessed through CN in North Vancouver. Big railroads threaten regional ones.

Recommendations of the C.T.A.:

1) Negotiate Competitive Access over major rail lines, e.g., Prince George to Edmonton, using haulage rights, not running rights.

2) Provide access to final arbitration on disputes such as tariffs.

3) Regulatory oversight for major mergers, i.e., must prove it's in the public interest. [This must be where the Competition Bureau Report, mentioned in Hansard re the BCRail sale, comes into the picture.]

Nowhere did it suggest selling BC Rail.

[There is much more interesting information in this report, which can be readily googled at the identifier below. The report is easy to read, and well worth anyone's time. - BC Mary.]

From: Canadian Transportation Act Review Panel "On Competitive Rail Access", BC Rail -- 6 October 2000.


Almost immediately after CN won the bidding on BCRail, CN & BCR issued a Request for Proposals (RFP) to third party tour trains over the BCR network from North Vancouver to Prince George, and on CN line from Prince Rupert to Prince George, and Jasper. Of 3 final submissions, decision was held back by delayed report from Competition bureau. Great Canadian Rail Tour Co. Ltd. abd Whistler Rail Tours Ltd. were final submissions, with one submission rejected. 16 June 2004. both officials of both proponents as well as BCRail & CN, are on a train to Whistler. 26 August 2004 the 3-member evaluation committee decides that Great Canadian Rail Tour Co. is the successful bidder. 2 Sept. 2004, CN & GCR execute agreement.

Now read on, from Vancouver Sun, 14 December 2006.

Rocky Mountaineer head has a continental 'dream'
By Malcolm Parry

PETER ARMSTRONG's Armstrong Hospitality Group Ltd. [formerly known as Great Canadian Rail Tours] should end the year with about $180 million in revenues. Most of that will come from the 140,000 passengers -- "guests," Armstrong calls them -- who'll have paid an average of $1,000 each to ride aboard the deluxe trains his Rocky Mountaineer Vacations firm runs to Whistler and beyond [i.e., Prince George], and along the Yellowhead and Kicking Horse route to Banff and Jasper ....

With former Conservative MP Jim Gouk's urging, he's planning a 2008-2009 route south from Calgary via the Crow's Nest Pass to Nelson. Entry costs for that would be $35 million to $40 million for 10 new cars, and $2 million for a pair of refurbished locomotives.

Beyond that, Armstrong's "dream for some years" has been "some kind of transcontinental service." Unlike the other Rocky Mountaineer itineraries, which put travellers into hotels overnight, this one "could be sleeping-car service; I have to be somewhat vague."...

There was no such vagueness in late-1992, when Armstrong's three-season outfit -- then called Great Canadian Railtour -- had lost $6.3 million, owed $800,000 (much of it to hoteliers in overnight-stop Kamloops), and basically had nothing for a week-away payroll. Further, GRC was about as popular as a burning trestle with Via, from which Armstrong had pried the all-daylight train service in an early example of federal-government privatization policy.

The story of that brinkmanship period is recounted in author Paul Grescoe's 344-page Trip of a Lifetime: The Making of the Rocky Mountaineer. Rare for an authorized book, it includes then Via executive-VP Jim Roche's assessment of Armstrong as "smarmy and unctuous."

In the relevant chapter, Grescoe reports how a tough deal saw Calgarians Sandy Slaytor and Mike Phillips add $1.1 million to their $2.5-million investment, thereby saving the fledgling company. Then-Deputy Prime Minister Don Mazankowski's executive assistant, Dave Allin, also recalls Via boss Ron Lawless or another official saying of GCR: "They are not going to make it. You cannot run a profitable private-sector rail line in Canada -- you cannot do it." ....

While awaiting the election of a majority federal government that could level the playing field between Via and private operators, Armstrong is stoked to see equity money pouring into "huge growth opportunities" in "quality tourism products." He means deals like the Fortress Investment Group's $2.8-billion acquisition of Intrawest Corp. stock at $35 a share; Bill Gates's Cascade investment firm and Saudi Prince Al-Waleed Bin Talal's Kingdom Hotels International offering $3.7 billion for the 71-hotel Four Seasons group; and Prince Al-Waleed paying $3.9 billion earlier for the Fairmont Hotels & Resorts chain.

Full Story at Vancouver Sun, 14 December 2006.

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