Saskatchewan to ask for changes in the way short-line railroads are valued

REGINA (Feb. 24) — Saskatchewan will ask the federal government to change the way rail lines are valued to make short lines more affordable for groups in Western Canada interested in buying them.

“We are asking the Canadian Transportation Agency to exclude the value of rail line upgrades, paid for by the federal government, when they are determining the net salvage value of a rail line,” said Highways and Transportation Minister Judy Bradley.

Before a railway abandons a line it is required to offer the branch line to the federal, provincial, and municipal governments for net salvage value. To date, the railways have been including potential costs associated with upgrading the line when determining the sale price.

She said that purchasers are paying for upgrades that taxpayers have already paid for.

“When rehabilitation upgrades are included, the net salvage value of the track goes up from about $20,000 per mile to $60,000 per mile, putting the cost out of reach for many groups trying to save branch lines in their area.”

Between 1977 to 1989, the federal government invested over $600 million to upgrade Saskatchewan’s grain dependent branch line systemr the Prairie Branch Line Rehabilitation Program. There are many years of useful life left in these assets, Bradley said.

“Ultimately, we want to lower the purchase price of abandoned branch lines across the province to improve producer and community groups chances of owning and operating viable short line railways,” Bradley said. “There are several groups currently involved in negotiations that would benefit significantly from a favorable ruling.”