Rail abandonment regulations take effect
Company will be required to determine net salvage value
Three days before Genesee & Wyoming can apply to abandon the rail line in Cape Breton, the provincial government has put in place a “rigorous” set of regulations the railway operator must follow in that process.
Transportation Minister Geoff MacLellan said the regulations are wide- ranging and deal with all aspects of the abandonment process. One of the most significant conditions, according to MacLellan, is a requirement for the company to determine the net salvage value of the rail line.
“Once they give us the signal that they’re applying for abandonment, they must provide the net salvage value of the rail line, which is the value of the asset — the rails, the steel — minus every cost associated with reclaiming and remediating the entire rail bed, so that’s everything including the rail bed, the corridor, structures, anything to deal with crossings, property, environmental impact,” he said. “So to get to that net salvage value, there’s a tremendous amount of work that they’re going to have to put together.”
MacLellan said one of the goals of that particular regulation is to protect Nova Scotia taxpayers from being saddled with a possible clean-up bill.
The net salvage value figure will be required early on in the process, according to the minister.
“It ultimately decides what the overall value, and therefore the sale price, is for the line, so it’s really a critical piece of information that really determines what happens next,” he said.
Genesee & Wyoming, owner of the Cape Breton and Central Nova Scotia Railway, will be in a position to apply to abandon the Cape Breton portion of the line as of Friday. If it does so, the railway must give 30 days notice, at that point, of its intent to abandon.
From there, the regulations require the railway to offer the line for sale to private sector interests. Anyone interested in acquiring the rail line must then let the railway know within 30 days and there would be a sixmonth negotiating period. If there are no offers, the province and municipalities can then make an offer. If government is not interested in acquiring the rail line, the company can then apply to abandon the rail line and must submit an abandonment plan to the minister that describes the work that will be done to remove the track, who is doing the work, and details of insurance coverage.
“If we go through the sale process portion of the regulations and a buyer doesn’t come forward, that obviously sets in motion the abandonment requirements themselves, but there’s a lot of work to do and a lot of conversations and a lot of analysis by the company and by other stakeholders to see if we’re ever going to get to that point,” said MacLellan.
The railway abandonment regulations, which officially took effect Tuesday, address a number of other issues, including access for landowners if the rail line is sold, liability insurance requirements for the company, and environmental-related concerns, including plans for remediation if necessary.
Details of the new regulations will be posted online by the department this week.
New rules for abandoning railways in Nova Scotia are now in effect. Genesee & Wyoming, owner of the Cape Breton and Central Nova Scotia Railway, has indicated it intends to abandon the Cape Breton portion of the railway once it is in a position to do so, beginning Friday.