A new third-party operator to run the passenger service on the Algoma Central line was expected to be named before the end of 2015.
How quickly that selection becomes public depends on the City of Sault Ste. Marie, Canadian National Railway (CN), the federal government, and the stakeholders along the Sault-to-Hearst line reaching a final consensus.
“We’ve got some work to do and conversations to have, that’s for sure,” said Tom Dodds, CEO of the Sault Ste. Marie Economic Development Corporation.
Three potential operators — two American, one Canadian — had made the shortlist stemming from a request for proposals (RFP) process that kicked off in mid-August. Each operator has filed a final written submission that’s currently being reviewed by all the parties, said Dodds.
It’s the second search launched this year after a disastrous effort from a Michigan company, Railmark Holdings, which was the hand-picked choice by CN to run both the passenger service and the Agawa Canyon tour train excursion on the 470-kilometre line in northeastern Ontario.
“We’ve learned a lot from the last experience and we will have a thorough due diligence process once we’ve made the final selection,” said Dodds.
As to whether any of the three proponents have a suitable ‘track’ record in running this type of service, Dodds responded: “I’ll be diplomatic and just say they all have rail experience of some form or another.”
What’s on the table is “three very different types of proposals from three different proponents.”
But he vows the next operator will be able to do the job.
“We will not put forward a proponent to the City of Sault Ste. Marie that we don’t think is capable of doing the work,” said Dodds. “We’re looking to get the best operator to serve the interest of the stakeholders.”
Dodds, who also heads a passenger service stakeholder group, said the successful operator must adhere to the prescribed schedule, must have the operating capital in place, and must demonstrate the capability to run the service.
Those were the hard lessons learned from the Railmark experience, which ultimately forced CN to take back the tour train service in June, and then abruptly cancel the three-times-a-week passenger service in July, leaving cottagers without access to their properties and fishing lodge owners without guests.
During the second RFP process, invitations were sent out to 25 railway-related firms across North America.
This time around, Dodds said the city holds greater leverage in making a good selection.
In order for the rail operator to access a vital three-year, $5-million federal subsidy, Transport Canada rules dictate that the funds must flow through the city, which is serving as an intermediary.
Dodds said it means the city will have control over the passenger train’s schedule rather than CN arbitrarily deciding to alter the service with little notice.
“It’s a key difference from before because we’re the key to the funding. In the previous circumstance, we thought we were more beholden to CN.
“We want to make sure the service is able to operate and isn’t postponed or delayed because of issues related to tracks or equipment.”
Once an operator is in place for 2016, Dodds said the attention must turn toward finding ways to boost sagging ridership by creating more upscale, value-added excursions and wilderness experiences that will encourage tourists to pay premium prices.
A new weekly and monthly schedule must also be drawn up that better reflects the seasonal and cyclical ridership numbers.
Should the new operator demonstrate it can capably run the passenger run, Dodds sees no reason why CN won’t be amenable to relinquishing the Agawa Canyon tour train to the operator as well.
“As they always reinforce (to us), they are not in the passenger business.”
Though the passenger and Agawa Canyon runs are separate entities, there are synergies in running both, he said.
“What we’re trying to do is get bona fide operators that we think are capable of operating one or both.”
