Chatham-Kent Looks Into Selling Railway Line

The Municipality of Chatham-Kent is taking steps to potentially sell its out-of-commission railway line that runs from Wallaceburg to Chatham.

A motion was approved 16-2 at Monday night's council meeting recommending that the Municipality of Chatham-Kent increase the operating loan to WDC Rail by $75,000 to provide the company with cash flow to fund operations for the rest of the year. Councillors Doug Sulman and David VanDamme voted against the motion.

In November of 2006, the municipality received notice that CSX Transportation would be discontinuing its railway line from Wallaceburg to Chatham. The line has a total distance of 28.6 miles including siding and spur lines.

Since then, the municipality purchased the short line and formed WDC Rail, a corporation owned by the municipality. Council gave WDC Rail direction to investigate options for a potential sale of rail assets, which are considered in the report.

Municipal staff have compiled a list of the short line assets so WDC Rail can move forward with selling them.

The land is about 181.18 acres and there is currently a total of 14 known crossings, including bridges and culverts, that the short line crosses over. As for rail assets, there are an estimated 7,224.86 tonnes of steel and additional specialty rail equipment. According to the municipality's report, there are at least 604,032 tonnes of ballast.

The WDC Rail Board is now determining the best options for the potential sale of WDC Rail assets. The current options are listed below.

1.  Sell the short line outright.
2. Separate assets and sell each asset type individually or combine assets as part of a sale.
3. Remain status-quo.

At the July 16 council meeting, Chatham-Kent council unanimously approved a motion by Councillor Jeff Wesley for the municipality to begin the process of removing obsolete rail crossings, signage, and begin repaving/repairing those crossings for the benefit of drivers and school bus operators.

According to the municipal report, staff have already begun the process of removing railway crossing signs and bagging the electronic warning devices on the rail line.

Council has directed that the deficits remain in the separate corporation until a buyer is found. The municipality has loaned the company funds to buy the property and to fund operating expenses. The company is charged interest on the loan equal to the rate earned by Chatham-Kent’s surplus funds. The additional $75,000 loan will provide the cash for the company to pay its 2018 operations.

The WDC Rail incurs $60,000 of annual expenditures for required track maintenance, utilities, and property taxes that sees no rail traffic.