Mayor and council welcome information in Province’s rail studies

September 25, 2015

Information is valuable and builds the business case for Port of Sydney

SYDNEY, NS - The municipality closely engaged with the development of the Port of Sydney welcomed the provincial government’s studies on the railway and said the findings are valuable to their marketing efforts.

“We thank Minister MacLellan and members of the Minister’s Rail Advisory Committee for their leadership on seeing this process through,” said Mayor Cecil Clarke of the Cape Breton Regional Municipality. “The important next step is private-sector led outcomes.”

The first report evaluates the condition of the Sydney Subdivision line from Port Hawkesbury to Sydney. The 183 kilometre track is currently a Class 3 track, but the line has been downgraded on certain sections and therefore travel to the designated 40 mph speed (64 kmh) was not permitted.

The studies determined a $31 million dollar overall investment is needed, over the course of 5 years, to restore the track to Class 3 condition. The consultant, CANARAIL, suggested that the cost of upgrading the bridges may be an additional $5 million.

“The report indicates the line is in relatively good condition,” said Michael Merritt, Cape Breton Regional Municipality’s Chief Administrative Officer. “The line is in good shape for the future if new business can be attracted. That‘s the focus of our efforts right now.”

Operating costs at current level of service are estimated to be a total of $3 million over a five year period, an average of $600,000 annually.

The line also has potential for double-stacking containers with some upgrades at a few bridge crossings. The cost to upgrade to a class four track cannot be determined at this time and additional work would have to be conducted before this cost would be known.

“Rail is the most economical, environmentally-friendly and safest way of transporting goods over long distances,” continued Merritt. “We are focused on developing the Port of Sydney and the rail line is part of that goal.”

Merritt said the existence of the line is of critical importance to the municipality and Port of Sydney.

“From our perspective, it’s critical that no action is taken on the rail line until the future commercialization trend for the Port of Sydney is determined one way or another,” said Merritt.



Three Reports in regard to Rail and its future

Report 1

Evaluation of CBNS Sydney Subdivision - CANARAIL

· The line is 113.8 miles in length

· Railway has been running as a Class 3 track as of 2014

· The line has been downgraded on certain sections and therefore travel to a 40 mph speed was not permitted

· The line is in relatively good condition considering the lack of capital investment in the past number of years

· To get the track to a Class 3 once again, it will require approximately $31M in capital and operating expenditures over five years

· Capital is estimated to be $28M over five years. However, it was noted in the study that bridge structures costs were likely underestimated by approximately $5.0 million

· Operating costs at current level of service are estimated to be $3.0M over five years

· The cost to upgrade to a Class Four (60 mph - 75 mph) track cannot be determined at this time and additional work would have to be conducted before this cost would be known.

· Double stacking is possible however a couple of upgrades would be required at a few bridge crossings

· The line in good shape for future port development

Report 2

Assessment of Rail vs Truck and Intermodal

· Rail is the most economic means of transporting goods

· It is also environmentally and safest ways of transporting goods

· For shorter distances trucking is more economical

· Also with the present condition of the track, the Truro to Sydney line is not economical, therefore capital investment, as was mentioned in the previous study, is critical

· With the development of the Port of Sydney this price tag will make the investment a small price to pay because of the enormous economic benefits.

· If the track is removed it will be too costly to replace and therefore will make the case for port development very difficult.

Report 3

Economic Opportunities in Cape Breton

· The report highlights a few projects that could happen in the next few years

1. Donkin Mine

2. Provincial Energy Ventures

3. International Iron Beneficiation

4. Rail car refurbishing

5. Tourism train

6. Intermodal traffic

7. Port of Sydney Container Terminal

· None of the first five projects will individually bring sufficient traffic to the rail line to get it to the 10,000 car threshold

· The first five ventures could bring new opportunities to the line but they would not be enough to ensure a breakeven threshold for the rail line

· The intermodal project would need a number of factors, including infrastructure investment, to occur before it could influence the upgrading of the line in the Sydney

· With over 90,000 containers and trucks being loaded in North Sydney, a business case could be looked at, however under current conditions this is not feasible and to make it so would require investment

· The study the CBRM is working on with the Port of Sydney Development Corporation, Harbor Port Development Partners and other partners makes the Sydney Subdivision essential for future port development. This study and the impacts will be known in 2016.

· The critical and most impactful project is that of a container terminal and the study of this project was outside of the scope of the rail studies.

· It is critical that no action to remove the line is taken until the future of the Container Terminal is determined