With three rail companies having submitted formal bids to operate the Algoma Central Railway passenger service between Sault Ste. Marie and Hearst, the ACR Passenger Service Working Group, in coordination with CN, is in the process of determining which firm is the best fit for the region and has the best chance of ongoing success.
“We’re engaging with regional stakeholders, CN and industry professionals to find the best company with the best business plan to keep this vital transportation link operating in the long term,” said Joe Fratesi, Chair of the ACR Passenger Service Working Group and CAO of the City of Sault Ste. Marie. “We’re going through a confidential tendering process, and we hope to be in a position to announce the successful bidder in the coming weeks.”
CN, the parent company of Algoma Central Railway, asked the Working Group to facilitate the ACR passenger service request for proposal (RFP) process as a way to ensure regional stakeholders are actively involved in the course of action. Meanwhile, CN has also issued a separate RFP for a third party to operate its Agawa Canyon Train Tour. CN’s core business is rail freight transportation, and the company is seeking an experienced party to operate and improve its rail tourism operations.
The ACR Passenger Service Working Group, which represents a larger consortium of stakeholders, was formed in February 2014 after the Government of Canada announced its intention to eliminate a $2.2 million annual investment in the remote passenger rail operation, which CN inherited when it acquired Wisconsin Central Ltd. in 2001. Transport Canada later announced a one-year extension of this passenger rail funding, meaning the service will operate as-is until March 2015.
According to an economic impact assessment from BDO Canada, the ACR passenger service generates more than $38 million in annual economic activity, which supports up to 220 jobs and helps deliver over $5 million in tax revenue to government coffers every year. Once a third-party operator is selected to operate the Sault-to-Hearst passenger service, CN, the new operator and the Working Group will outline to the Federal Government the recommend efficiency improvements, economic benefits of continued rail passenger service and a request for assistance to help the initiative move forward.
“The Working Group is cautiously optimistic that the Government of Canada, when it becomes aware of the overall advantages of the new rail operator and the comparatively limited investment needed to keep the line sustainable, will financially support this critical transportation service,” said Tom Dodds, a member of the ACR Passenger Service Working Group and CEO of the Sault Ste. Marie Economic Development Corporation.