With its passenger service shut down since last month and freight reduced to a 15 mph crawl on its deteriorated track, Vancouver Island’s 125-year-old rail service is fighting for its survival.
Last October, rail service owner Island Corridor Foundation (ICF) appealed to the provincial and federal governments for $15 million to replace 104,000 rail ties – more than one quarter of the service’s total track.
With the recent Liberal leadership race, a new provincial cabinet and now a federal election, the request remains in limbo. But the train service’s owners and operators say that without that capital, they’ll soon need to look at shuttering the service completely.
“We recognize that we’re on borrowed time,” said Don McGregor, general manager for rail at Southern Rail of Vancouver Island Ltd., which operates the rail service for ICF.
The rail service has struggled for more than a decade, which convinced former owner Canadian Pacific Railroad (TSX:CP; NYSE:CP) to donate its majority portion of the Island rail service to ICF for a charitable tax receipt in 2006. ICF executive director Graham Bruce noted that the current infrastructure crisis has similarly been brewing for many years.
“There wasn’t the maintenance that needed to be done over the years because the operators wanted off the Island,” he said. “Our maintenance program can’t keep up with deterioration of rail.”
He said the situation came to a head last month when a $350,000 project to replace 1,500 ties highlighted the track’s disrepair. Via Rail Canada consequently decided against reinstating its passenger service, which had been halted for the repair. Via now offers a replacement bus service, and the track’s condition has reduced 30 mph freight runs to 15 mph.
But Bruce and McGregor argue that the rail service, while currently carrying just 40,000 passengers and under 1,000 freight carloads annually, holds great economic potential for the Island and shouldn’t be abandoned.
McGregor identified four potential growth areas for the train service:
- intercity passenger service;
- commuter service serving fast-growing Greater Victoria;
- a tourism excursion service that could capitalize, for example, on the new cruise ship terminal being developed in Nanaimo; and
- freight.
With that potential in mind, he said, Southern Rail has thus far been operating on a break-even business model and reinvesting profits into infrastructure improvements.
Bruce said ICF is also convinced that the service holds great potential for the Island. Among other things, he said, ICF wants to move the Via terminus from Victoria to Nanaimo, which would allow Island residents to commute to and from Victoria by train in a day – an option that, thus far, hasn’t been available.
Bruce added that a profit-sharing contract between ICF and Southern Rail could result in significant funds being reinvested into the Island’s communities.
“We’re just finishing off a long-term operating agreement with [Southern Rail], which will see investment of about $70 million to Vancouver Island though the ICF,” he said. “People have to be a little bit more visionary than what they’ve been; rail was what built the Island and it has a future – if we can keep it alive.”