Friday, May 16, 2014
PORTLAND, Maine (AP) — The company buying the assets of a railroad responsible for a fiery oil train derailment that claimed 47 lives in Quebec plans to resume oil shipments once track safety improvements are made, its top executive said Friday.
John Giles, CEO of Central Maine and Quebec Railway, said he hopes to have an agreement with officials in Lac Megantic, Quebec, within 10 days that would allow the railroad to ship nonhazardous goods, restoring the vital link between the railroad's operations to the east and west of the community.
The company plans to spend $10 million on rail improvements in Canada over the next two years with a goal of resuming oil shipments in 18 months, he said.
"In the interest of safety, and I think being sensitive toward a social contract with Lac Megantic, we have chosen not to handle crude oil and dangerous goods through the city until we've got the railroad infrastructure improved and made more reliable," he told The Associated Press.
The oil industry is relying heavily on trains to transport crude in part because of oil booms in North Dakota's Bakken region and Alberta's oil sands.
In July, a train transporting Bakken oil was left unattended by its lone crew member while parked near Lac Megantic. The train began rolling and sped downhill into the town, where more than 60 tank cars derailed and several exploded. The accident killed 47 people and destroyed much of the town. Three workers were charged this week in Canada with criminal negligence.
Canadian Prime Minister Stephen Harper wants the railroad and Lac Megantic residents to work together on a final plan.
"Any plan the company has should take into account the tragedy the people of Lac Megantic have gone through and should be done in collaboration with the administration of the city," said Carl Vallee, a spokesman for the prime minister.
Transportation Minister Lisa Raitt said only that she was monitoring the situation.
Mayor Colette Roy-Laroche, who had no comment on Friday, previously told the new operator that she wanted the railroad to be re-routed around the downtown.
News that the new railroad is already talking about resuming operations upset Yannick Gagne, owner of the cafe-bar that was at ground zero of the tragedy.
"People are still in distress, in pain, facing financial problems, and we're talking about the train company starting up," the Musi-Cafe owner said.
Giles said he intends to move slowly and understands the community's concerns. He said he hopes to convince the people of Lac Megantic that the rail is safe enough for shipments of dangerous goods by this fall. He said he wouldn't press for crude oil shipments until later.
"I want to get the railroad in position that by January 2016 that I can at least begin to compete for potential crude business moving east-west," Giles said.
What business may be available at that point is unclear, the company said.
New York-based Fortress Investment Group was the winning bidder for the assets of Hermon, Maine-based Montreal, Maine and Atlantic Railway, which declared bankruptcy after the disaster. Central Maine and Quebec Railway closed on the sale of U.S. assets on Thursday and is expected to close of the Canadian assets in a couple of weeks.
Giles made his comments Friday in a telephone interview from Bangor, where his company had called former Montreal, Maine and Atlantic workers for a two-day meeting to talk about safety and operations.
He said the rail is in rough shape, with speeds reduced to 10 mph in many sections in Canada. He said the goal is to improve the track to safely increase train speeds to 25 mph. He also said he has no plans to operate trains with a single crew member.
With repairs, the company can transport crude safely, Giles said.
"The railway is important to the community, people, jobs and commerce," he said. "We believe and we've proven ... that we can handle every type of commodity safely and efficiently."
Associated Press writer Rob Gillies contributed to this report from Toronto.
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