Still no ratified agreement for Vancouver Island railway service to resume

Island Corridor Foundation CEO Graham Bruce is still working to restore railway service on Vancouver Island. - Photo by Karl Yu/Black Press
Island Corridor Foundation CEO Graham Bruce is still working to restore railway service on Vancouver Island.
— image credit: Photo by Karl Yu/Black Press

The owner of the Island railway says a tentative agreement to restore passenger service from Courtenay to Victoria has been reached.

The governing body, however, says a few conditions still need to be met before signing off on a deal.

"We are still officially in discussions, but no final agreement has been reached," Jacques Gagnon of VIA Rail said in reference to an Island Corridor Foundation announcement Wednesday in Nanaimo. "They have chosen to describe it as a tentative agreement or agreement-in-principle. That's their choice."

The agreement needs to be ratified by ICF, Southern Rail and VIA Rail boards. Before approval, the ICF board will review the service agreement and train schedule.

If a deal is struck, Southern Rail would provide a service package including marketing, operations and maintenance, and assume passenger revenue risk. VIA Rail would contribute the train, insurance and a fixed subsidy.

"It's another step of many to get to a point of seeing passenger rail on the line again," ICF CEO Graham Bruce said of the tentative deal.

The announcement was welcomed by Courtenay Mayor Larry Jangula, who had hoped for an agreement last fall.

"It's really wonderful news for the whole Island," said Jangula, who represents the Comox Valley Regional District on the ICF board. "It's a win-win, I think, for all of us. The big motivation is to try to pick up a bunch of passenger service south of Nanaimo, especially Duncan to Victoria."

The foundation owns the E&N line while Southern Rail is the operator.

VIA Rail Canada is an independent Crown corporation that answers to the federal government. Gagnon said the company was not privy to Wednesday's announcement.

VIA halted passenger service in the spring of 2011 due to safety conditions of the E&N track. Freight service has continued south from Nanaimo.

"We'd like to be able to resume activities because that's the nature of our business, but there are some key requirements — safety and some commercial considerations — because we are a non-mandatory, Crown corporation with a commercial mandate," Gagnon said. "We have to make sure that we use taxpayers' money most efficiently."

He likens the situation to an offer to purchase a house, which he notes is a conditional offer pending approval by a bank.

Before it gives a stamp of approval, VIA requires a number of assurances concerning track levels, railway crossings and "liabilities that we're very sensitive to," among other examples. The company has also said it would not incur an additional operating cost deficit, which was $1.4 million in 2011.

Federal, provincial and five regional funding agreements totalling $20.9 million ($392,000 from the CVRD) need to be finalized before Southern Rail tenders track and trestle work. Repairs should take about nine months to complete.

Over the next few years, repair costs will exceed $100 million.

"It ($20.9 million) services the plan," Bruce said. "It's the funding required for the first step of what we call the incremental plan, improving the line and bringing service back."

The ICF has conversed with the BC Safety Authority, which has regulatory jurisdiction on the track. The operator of the track is Southern Railway, and it is incumbent upon them to ensure the track is restored to safe operating condition prior to resuming passenger service. BC Safety Authority will continue to monitor the railway to ensure compliance with railway regulations.


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