Friday, November 17, 2017

Fairfax shows interest in joining partnership to purchase HBR

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Fairfax shows interest in joining partnership to purchase HBR OmniTRAX

A Toronto-based holding company has expressed interest in a partnership that could purchase the beleaguered Hudson Bay Rail line, the Port of Churchill and other associated assets.

Natural Resources Canada says Fairfax Financial Holdings Inc. is exploring a partnership with Missinippi Rail and One North to buy the northern Manitoba rail and port infrastructure.

"We are optimistic about the prospects of northern gateways. The Churchill rail corridor and the Port of Churchill are important pieces of infrastructure for northern communities and to the economy of Canada. Partnering with First Nations and communities is the right model for this investment. We have deep experience in infrastructure projects and have the necessary operational expertise to run shortline railways in partnership with our investee company AGT Foods. The key is that the plan has to be viable and profitable in the long term as a business," said Paul Rivett, president of Fairfax Financial Holdings Inc.

Canadian Minister of Natural Resources Jim Carr added, "This development has the potential to contribute to an arrangement supported by First Nations and communities in northern Manitoba. This would enable a sustainable business approach that results in a safe and reliable rail line."

OmniTRAX Inc. entered into a Memorandum of Understanding in December 2016 with Missinippi Rail and One North on a potential sale of the Hudson Bay Rail line for a reported CA$20 million (US$161.18 million). Earlier this year, the line was hit with floods, which caused multiple washouts and other damage that ended service along the line.

In October, the government of Canada gave OmniTRAX 30 days to fix the line or face legal action. The government followed through with its ultimatum Nov. 13, when it filed a breach of contract lawsuit against the shortline holding company.

The government of Canada, through its chief negotiator the Honorable Wayne Wouters, explains that it will continue to work with OmniTRAX and, in exclusivity, with the above parties towards positive solutions for the people and communities of northern Manitoba.