Hudson Bay Railway, Port of Churchill sale is off

Negotiations for the sale of Hudson Bay Railway, the Port of Churchill in northern Manitoba and related assets have broken down, railroad officials announced yesterday.

Discussions between the railroad's owner and a consortium involving two First Nations groups and Fairfax Financial Holdings have been ongoing for the past few months. In late May, the parties announced a tentative agreement that would have transferred ownership of the port and restored rail service to northern Manitoba.

But the transaction fell apart despite "our best efforts to find common ground on certain key issues," Hudson Bay Railway officials said in a statement.

"This outcome is unexpected and very unfortunate," they said.

The railroad is owned by OmniTRAX Inc. In May 2017, OmniTRAX closed the Hudson Bay Rail Line due to severe flooding and washout conditions. OmniTRAX had declined to make the repairs related to the flooding, claiming they were "not economically feasible" and that the Canadian government should cover the cost.

According to yesterday's statement, railroad officials initiated the repair process last week by issuing a request for proposals through engineering firm AECOM.

"However, we want to make clear that this development may jeopardize the opening of the rail line this season," the statement continued. "As we have previously stated, we are not in a position to fund the entirety of the repairs to the [Hudson Bay Railway] in the absence of a sale agreement."

The railroad's owners "will continue to pursue any and all opportunities" to sell the line, the port and related assets "as expeditiously as possible," they said.

The talks between OmniTRAX and the consortium were announced after discussions broke down with a group of Manitoba First Nations and iChurchill.