iChurchill calls off Hudson Bay Railway acquisition

iChurchill Inc. is stepping away from its plan to acquire the flood-damaged Hudson Bay Railway and Port of Churchill in northern Manitoba, Canada, the private company announced yesterday.

Earlier this month, a group of Manitoba First Nations and iChurchill announced they had reached an agreement to buy the rail line, port and associated assets, which are owned by OmniTRAX Inc.

The rail line, which operates between Gillam and Churchill, has been inoperable since portions of it were washed out by floods in May 2017. OmniTRAX has declined to make the repairs related to the flooding, claiming they were "not economically feasible" and that the Canadian government should cover the cost.

In a statement released yesterday, iChurchill officials said they've halted negotiations to finalize the purchase due to the Canadian government's "unwillingness to engage in meaningful dialogue."

As a result, the necessary repairs to the railroad are unlikely to be done during the summer construction season, they said.

"We are disappointed to have put so much time, effort and money into what would have been a timely solution for the people of Churchill and the economy of western Canada, but we have apparently run up against politics," said iChurchill Chief Executive Officer Louis Dufresne.

Dufresne said iChurchill officials met last week with the government's negotiator, Wayne Wouters.
 
"He made it clear that the government is willing to deal only with one specific company, a Toronto-based financial firm," Dufresne added. "We can't understand why this is, given that our partnership meets all of the government's stated criteria to support the restoration of rail service to Churchill."

After iChurchill signed a letter of intent with OmniTRAX in March, OmniTRAX notified the government's negotiator that they had come to terms with a prospective buyer of the assets, according to iChurchill officials

However, Wouters informed OmniTRAX that the government was pressing ahead with another firm, they added.

"The government appears to be picking sides in a commercial transaction regarding privately-held assets," they said.

OmniTRAX Canada President Merv Tweed expressed disappointment about iChurchill withdrawing from the negotiations in an email to CBC News.

"We have always been willing to engage in constructive discussions with any and all genuinely interested parties and are continuing conversations with potential buyers. We remain committed to working expeditiously to arrive at a solution that would allow the railway to be repaired this season," Tweed said in the statement, according to the CBC.