What's next for MMA?

From CBC News
J.D. Irving eyeing railway involved in Lac-Mégantic crash

http://www.cbc.ca/news/canada/story/201" onclick="window.open(this.href);return false; ... -sale.html

... and to that you can add

http://bangordailynews.com/2013/08/19/b" onclick="window.open(this.href);return false; ... e-60-jobs/

The mill in question is located in Ashland. It would appear that Irving has more to gain than just facilitating crude transport.

PBM

In addition to the mill at Ashland, Irving is interested in developing copper deposits located west of
Ashland. This interest has started a review/rewrite of Maine's mining regulations.

Gilbert B Norman wrote:But with the disproportionate representation small states enjoy in the US Congress, and with the sobbing from on line industries (if we lose the railroad, our family owned lumber mill will be out of business and fifty guys will be out of work, sob sob) some kind of service will be provided (Irving Oil has alternatives that have been addressed at this topic), but settling the Estates of MMA and MMAC will be a lengthy process (I think the only way the claimants, as distinct from trade creditors, will be whole is with a taxpayer bailout - US and/or CA); I for one, do not expect to be around to see the final Discharge.

There is another factor involved in the future of this line. In Maine CIANBRO President, Peter Vigue, and supporters, are involved in trying to create the "east-west highway project. This would be a 500 ft wide (at least) corridor across Maine, from the NB border, north of Calais, to Coburn Gore, in some spots being only a few miles south of the current former CP line. This proposed corridor would be "privately built and privately owned". Nevertheless Vigue and company, have managed to get the Maine legislature to create new "language" allowing for "public-private partnerships" which would, among other things, allow the state of Maine to use the power of "eminent domain", if necessary, to "take" private property, from unwilling sellers, to help such a "public-private" transportation proposal! These "machinations" in the legislature, were done very quietly, with no public notice, and completed in an after hours legislative session, with no fanfare!

The proposed "east-west" highway is being touted by the developers as the future of Maine "highway" transportation. It would be a privately owned toll road that benifited "highway transportation" entities. Very vague statements suggest the possibility of "other uses" for this corridor, if developed. They would include possible "utility" uses, though when questioned openly, Vigue is absolutely unwilling to comment on these possible "other uses". He has stonewalled this issue for over a year now.

On a map one can easily see that it is a relatively straight line from Montreal to St John, NB, following this proposed routing. One can see that it is only a few miles south of the existing CP line also. Since the shortest distance between two points is a straight line, and time is money in transportation, I don't think the existing rail corridor is going to be abandoned any time soon! Peter Vigue has stated that he has "investors" ready and willing to invest 2 billion to create his "road". That is very serious money on the table folks! It has NOT been stated, but considering the importance to Irving, of the crude oil transportation, one can easily assume that they might be one of the largest potential "investors" in such a project.

"Other uses" of such a corridor might include high voltage electric transmission lines, as there is clearly such a need with the rapidly expanding "windmill" development. Data transmission lines are another possibility! TransCanada has proposed oil pipelines from Montreal to the Canadian Maritimes. Look at a map of Maine to see the clearly "shortest route" for such a pipeline! IMHO I think the other "possible uses" of the proposed "east-west" corridor, are far more valuable to potential investors and stand to create way more potential revenue than any highway use. Perhaps that is why it is not nice to talk about them right now! I suspect the reason the current rail corridor has been left out of the discussion, to this point in time, is that it probably is not wide enough for all the potential "other uses" of such a project.

But it ain't over til the fat lady sings, and this disaster has stirred this pot considerably.

SRM

sandyriverman wrote:

Gilbert B Norman wrote:But with the disproportionate representation small states enjoy in the US Congress, and with the sobbing from on line industries (if we lose the railroad, our family owned lumber mill will be out of business and fifty guys will be out of work, sob sob) some kind of service will be provided (Irving Oil has alternatives that have been addressed at this topic), but settling the Estates of MMA and MMAC will be a lengthy process (I think the only way the claimants, as distinct from trade creditors, will be whole is with a taxpayer bailout - US and/or CA); I for one, do not expect to be around to see the final Discharge.

There is another factor involved in the future of this line. In Maine CIANBRO President, Peter Vigue, and supporters, are involved in trying to create the "east-west highway project. This would be a 500 ft wide (at least) corridor across Maine, from the NB border, north of Calais, to Coburn Gore, in some spots being only a few miles south of the current former CP line. This proposed corridor would be "privately built and privately owned". Nevertheless Vigue and company, have managed to get the Maine legislature to create new "language" allowing for "public-private partnerships" which would, among other things, allow the state of Maine to use the power of "eminent domain", if necessary, to "take" private property, from unwilling sellers, to help such a "public-private" transportation proposal! These "machinations" in the legislature, were done very quietly, with no public notice, and completed in an after hours legislative session, with no fanfare!

The proposed "east-west" highway is being touted by the developers as the future of Maine "highway" transportation. It would be a privately owned toll road that benifited "highway transportation" entities. Very vague statements suggest the possibility of "other uses" for this corridor, if developed. They would include possible "utility" uses, though when questioned openly, Vigue is absolutely unwilling to comment on these possible "other uses". He has stonewalled this issue for over a year now.

On a map one can easily see that it is a relatively straight line from Montreal to St John, NB, following this proposed routing. One can see that it is only a few miles south of the existing CP line also. Since the shortest distance between two points is a straight line, and time is money in transportation, I don't think the existing rail corridor is going to be abandoned any time soon! Peter Vigue has stated that he has "investors" ready and willing to invest 2 billion to create his "road". That is very serious money on the table folks! It has NOT been stated, but considering the importance to Irving, of the crude oil transportation, one can easily assume that they might be one of the largest potential "investors" in such a project.

"Other uses" of such a corridor might include high voltage electric transmission lines, as there is clearly such a need with the rapidly expanding "windmill" development. Data transmission lines are another possibility! TransCanada has proposed oil pipelines from Montreal to the Canadian Maritimes. Look at a map of Maine to see the clearly "shortest route" for such a pipeline! IMHO I think the other "possible uses" of the proposed "east-west" corridor, are far more valuable to potential investors and stand to create way more potential revenue than any highway use. Perhaps that is why it is not nice to talk about them right now! I suspect the reason the current rail corridor has been left out of the discussion, to this point in time, is that it probably is not wide enough for all the potential "other uses" of such a project.

But it ain't over til the fat lady sings, and this disaster has stirred this pot considerably.

SRM

What does this have to do with the MMA and its bankruptcy proceedings? Not trying to be a jerk here, but I don't think we should derail the subject into the E/W highway discussion, which I'm sure all of us have an opinion of. Frankly I'm sick of hearing about the bloody thing.

Also just a minor correction, the spelling for St. John is actually Saint John. Having family from Saint John, I've learned that they are quite touchy about the spelling of the city. Just a quick note for you


From what I hear, the primary objective of the MMA is to relink the two halves together and sell the company in one piece. Looks like the Government may have given them to Oct 1st to do so. While the town may not like it, I do believe the two parts will ultimately be linked back together. Further, the state of Maine of expressed concern over the line being split and the west of Brownville Jct part going up for scrap. They said that while they don't know if where money would come from, if they really needed to, they would try to pick up the line.

Irving has expressed interest both the executives and even Mr. Irving himself (One of the three brothers, not old man Irving).

The mention of the proposed east-west toll road is a valid topic.
Any prospective buyer for the the MM&A should at least give that
some passing consideration. The equivalent of an Interstate
Highway across northen Maine could put any new owner of the
MM&A out of business. Many railroads were put out of business
by the Interstate Highway System.

Dick H wrote:The mention of the proposed east-west toll road is a valid topic.
Any prospective buyer for the the MM&A should at least give that
some passing consideration. The equivalent of an Interstate
Highway across northen Maine could put any new owner of the
MM&A out of business. Many railroads were put out of business
by the Interstate Highway System.

Highly unlikely given the type of traffic MMA hauls and what goes on the highway. I would argue that a lot of what can go on the easy/west highway already does. What east/west highway am I talking about? Route 2 (As well as various other routes). Trust me, a lot of trucks fly through that road. I think a lot of the traffic you see on the MMA is better handled on rails in terms of type of traffic, volume and cost of transporting it. If the RR felt threatened I think you would have seen them publically speaking out against the highway a year ago.

Speaking strictly as a layman on this subject, wouldn't it be a heck of a lot cheaper for Irving, Vigue and his partners, and whoever else to invest money into updating (read: rebuilding parts of) the Moosehead Sub than to undertake the massive project of building an east-west highway? Instead of investing all that cash into something that's going to necessitate carving out something that doesn't yet exist, why not rehab the rail line so as to eliminate some of the curves, widen the ROW so as to accommodate power lines, bypass downtown Megantic, and thus create a virtually new rail link that would welcome both faster trains and more intermodal opportunities? Makes sense to me.

And while we're at it, the Atlantic Limited could be brought back, too ---many have always lamented the loss of the train, and it's a considerably more direct route between Montreal and Halifax than the one currently offered.

People seem to be under the impression that a highway and a rail line are the same thing. This is highly untrue. Each has their own advantages/disadvantages to moving freight and people.

Everyone seems to think that such an east/west corridor would benefit only business and could easily be substituted with a rail line. Last I recall, you couldn't drive your car freely on a rail line. Once again, the highway subject and this rail corridor are completely different animals and I don't think we should dive into that stinky debate. It would be best left for the tabloids.

The more interesting thing is, the MMA is going to operate the line as long as they can. The trustee has publically announced this and the Canadians have ordered CP to lift the embargo (to include crude oil) on MMA. The question is, as a common carrier, will MMA be forced to carry crude again?

Until the line through Lac-Megantic is reopened, they can't!

CP has stated publicly that it is unhappy with MM&A for the moment, though they will comply with Transport Canada's order to interchange traffic with that line. Irving Ltd. doesn't seem to be happy with MM&A either. Both companies have an interest in purchasing the MM&A as well, Irving publicly and CP through prior statements by EHH. So, assuming MM&A actively sought out oil traffic (Burkhardt's comments to the contrary) would it be absurd for those two companies to deliberately starve MM&A of oil traffic once the Moosehead is in full operation, pending its purchase by (likely) one or the other? I don't know of that would serve to lower the purchase price by reducing its revenue, or increase it by making the bankruptcy claims harder to repay. Either way, CP has its connection via NS and PAR to Irving rails, and Irving can also specify CN shipment from BNSF origins.

Also, have any other potential purchasers stepped forward? So far, the major interest I've read about is from the Irving group, with CP also having interest. Might Genesee & Western or another party be interested in trying to add a line?

mtuandrew wrote:Until the line through Lac-Megantic is reopened, they can't!

CP has stated publicly that it is unhappy with MM&A for the moment, though they will comply with Transport Canada's order to interchange traffic with that line. Irving Ltd. doesn't seem to be happy with MM&A either. Both companies have an interest in purchasing the MM&A as well, Irving publicly and CP through prior statements by EHH. So, assuming MM&A actively sought out oil traffic (Burkhardt's comments to the contrary) would it be absurd for those two companies to deliberately starve MM&A of oil traffic once the Moosehead is in full operation, pending its purchase by (likely) one or the other? I don't know of that would serve to lower the purchase price by reducing its revenue, or increase it by making the bankruptcy claims harder to repay. Either way, CP has its connection via NS and PAR to Irving rails, and Irving can also specify CN shipment from BNSF origins.

Also, have any other potential purchasers stepped forward? So far, the major interest I've read about is from the Irving group, with CP also having interest. Might Genesee & Western or another party be interested in trying to add a line?

I'd be interested where you saw comments about CP wanting to purchase the MMA.

I believe oil trains over the MMA are history. Under MMA ownership I am sure insurance costs would far outweigh revenue the oil traffic would provide, in light of a possible half billion dollars to rectify the Megantic disaster. Also the political component and atmosphere would probably make it impossible for another oil train to traverse Megantic at least under MMA ownership. If Irving takes over they may assuage enough people in that town to allow oil trains to pass but the trauma unleashed will take many years to forget. That bypass idea may happen if the government allocates the money but that is several years down the road if it ever happens. From something terrible can come something good. This was a real wake up call to all parties concerned in regard to rail safety and the potential for complete havoc improperly handled unit oil trains can produce. I thought crude oil was some what of benign petroleum product like tar or motor oil. It sure shocked me it could produce such a hellish inferno.

CN9634 wrote:

mtuandrew wrote:Until the line through Lac-Megantic is reopened, they can't!

CP has stated publicly that it is unhappy with MM&A for the moment, though they will comply with Transport Canada's order to interchange traffic with that line. Irving Ltd. doesn't seem to be happy with MM&A either. Both companies have an interest in purchasing the MM&A as well, Irving publicly and CP through prior statements by EHH. So, assuming MM&A actively sought out oil traffic (Burkhardt's comments to the contrary) would it be absurd for those two companies to deliberately starve MM&A of oil traffic once the Moosehead is in full operation, pending its purchase by (likely) one or the other? I don't know of that would serve to lower the purchase price by reducing its revenue, or increase it by making the bankruptcy claims harder to repay. Either way, CP has its connection via NS and PAR to Irving rails, and Irving can also specify CN shipment from BNSF origins.

Also, have any other potential purchasers stepped forward? So far, the major interest I've read about is from the Irving group, with CP also having interest. Might Genesee & Western or another party be interested in trying to add a line?

I'd be interested where you saw comments about CP wanting to purchase the MMA.

Sorry, I misspoke - I haven't seen comments specifically linking the CP to pursuit of the MM&A, only to pursuit of regional and shortline extensions of CP's network. I consider CP interested because of that prior statement by EHH, and because it is a natural interchange partner with CP, not because of publicly expressed interest in that line. (Though I'd be unsurprised if CP ignored MM&A and instead repurchased its old line to Quebec City.)

Zeke wrote:I believe oil trains over the MMA are history. Under MMA ownership I am sure insurance costs would far outweigh revenue the oil traffic would provide, in light of a possible half billion dollars to rectify the Megantic disaster. Also the political component and atmosphere would probably make it impossible for another oil train to traverse Megantic at least under MMA ownership.

Not sure what the laws are in Canada, but in the US, unless the people of a town are going to go to the (illegal) length of physically obstructing the tracks there is nothing whatever they can do to prevent a railroad hauling anything it accepts in interchange through a given location.

On the face of it I agree. However when the media drum beat starts and the political class jumps in coupled with a traumatized populace I believe the MMA would bumble into another PR nightmare. It's a given the main line, at some point, is going to be reconnected in Megantic and it looks like the MMA is history. In the future the new owners ( Irving ? ) may negotiate with Megantic to allow oil traffic to pass thru with police escort perhaps at 5 mph. I seems to me at this point in time the aforementioned party's would raise enough holy hell, if an oil train was carded thru Megantic, it would make any rail carrier think twice about the political and PR backlash. In this day and age a "Public be damned" approach will never work or even be attempted by a railroad in this type of situation.

I'll place a bet that you will see oil trains again. Just a hunch Any takers?