Railmark finalizes agreement to run ACR passenger rail service

Railmark Canada Ltd. is set to assume the operations of the Algoma Central Railway passenger service. The company, a Canadian subsidiary of Railmark Holdings Inc., recently finalized a set of agreements with CN to acquire assets and take over the Sault-to-Hearst rail line. Railmark has a plan in place to ensure the long-term viability of the transportation link.
For more than 15 years, Railmark has operated in 19 countries around the world, including a significant presence in Ontario and Michigan. The company operates short-line railways and tourist rail expeditions such as dinner and entertainment tours. Railmark also provides rail logistics and mechanical services.
“We see great potential in the ACR passenger service,” said Allen Brown, President and CEO of Railmark. “We look forward to continuing to engage with the regional stakeholders, CN and the Government of Canada to keep the line operating and make it a viable and sustainable operation.”
In September 2014, the ACR Passenger Service Stakeholders Working Group, with consensus from CN, which owns the ACR, undertook a request for proposal (RFP) process to identify a qualified third party to take over the remote passenger line. A number of bids were submitted. After a due diligence process, CN selected Railmark’s proposal to continue operating the remote passenger rail service. In a separate procurement process, Railmark was also chosen by CN to operate the Agawa Canyon Train Tour.
“CN is pleased to have concluded an agreement with Railmark Canada Ltd. to assume operation of the Sault Ste. Marie-to-Hearst, Ontario, passenger train, along with the Agawa Canyon Train Tour,” said Luc Jobin, CN’s Executive Vice-President and Chief Financial Officer. “CN believes Railmark’s passenger train expertise will benefit the operation of both services.”
As part of its bid to operate the ACR passenger rail line, Railmark outlined its plans to increase ridership by expanding the number of offerings while ramping up services and marketing efforts. Specifically, the company intends on adding dining tours and other entertainment-based voyages. By presenting a greater variety of excursions and providing a higher-value purchase for passengers, its business plan sees the remote rail service becoming self-sustaining within five years.
In January 2014, Transport Canada announced its intention to cut its annual investment into the ACR passenger service. The Working Group was then formed to come up with solutions to keep the regional transportation line in operation. The Federal Government later issued a one-year funding extension, which is set to expire March 31, 2015.
Based on an economic impact assessment from BDO Canada, the ACR passenger service currently generates between $38 and $48 million in annual economic activity, supports more than 200 jobs, and generates over $5 million in tax revenue each year. With Railmark’s expansion plans for the ACR, these numbers are expected to increase considerably. The discontinuation of the rail service will result in a significant loss of these current and future benefits, along with and an additional one-time impact on the values of properties located on, or in close proximity to, the rail line in an amount between $60 million and $67 million.
In recent years, the Government of Canada has been investing $2.2 million annually into the remote ACR passenger line. Under Railmark’s proposal, the amount needed from Transport Canada is $7 million over five years, considerably less than previous investments from the ministry. And after the five-year period, Railmark’s business plan calls for an end to public funding as the service becomes self-sustainable.    
“The Federal Government has the ability to keep this critical remote service in operation for a relatively limited investment,” said Joe Fratesi, Chair of the Working Group and CAO for the City of Sault Ste. Marie. “With time running out before the March 31 funding deadline, we look forward to hearing back from Transport Canada in the near future on the ministry’s decision to help keep this transportation link in operation. Our MP, Bryan Hayes, has been very helpful at ensuring this critical issue remains top of mind for the government, and his efforts to date are appreciated.”
The Working Group represents a larger committee of concerned regional stakeholders, including the City of Sault Ste. Marie, Sault Ste. Marie Economic Development Corporation, Municipality of Wawa, Town of Hearst, First Nations, Township of Dubreuilville, Tourism Sault Ste. Marie, Algoma Kinniwabi Travel Association, Coalition for Algoma Passenger Trains, and home, cottage and land owners serviced by the ACR line.
For more information on this initiative, please visit www.algomapassengerrail.com.