Canada Calling
July 1999

by Bryce Lee

INDUSTRY NEWS

A mediator has been named in an effort to restart the stalled BC Rail contract talks. Jim Breckenridge was called in after the Council of Trade Unions said The talks had hit a wall. The unions want the same deal offered public sector employees that is a three-year contract with a two per cent wage increase in the final year. A union official says BC Rail is offering no wage increase and wants major concessions, like the right to hire new employees for 20 per cent less than the current rate. The last contract expired nearly a year and a half ago. No dates have been set yet for the mediation to begin.

An out-of-service railway track between St. Thomas and Port Stanley Ontario came closer to being reinstated May 1, 1999 when the province initiated ownership transfer of a length of rail-banked track to the city of St. Thomas. The goal is to use the track (some of which will have to be relaid) to connect the Port Stanley Terminal Railway line, south of St. Thomas, to the present Canadian National Talbot Subdivision which runs north from CN's Cayuga Subdivision to London, Ontario. The idea is to utilize the trackage for passenger trains during the 2001 Canada Summer Games in which St. Thomas is joining with London, Grand Bend, Woodstock and the University of Western Ontario to host the games. The special announcement was made at the Spring Open House of the Elgin County Railway Museum in St. Thomas, Ontario.

A train trip along the Skeena river from Prince Rupert BC to Terrace will draw more cruise ships in to shore, city officials are hoping. Not only could the city benefit, but a large chunk of northwestern B.C. would as well, they say. On May 4, 1999 about 180 passengers from the cruise ship Norwegian Wind made the trip in a six-car train hired by the Prince Rupert Port Authority for a trial run. Passengers visited Port Edward's Cannery Row, saw First Nationþs pictographs near Tyee and visited Terrace's Heritage Park Museum. Throughout the journey, most passengers rushed to the train's windows to see bear cubs, eagles and even skunk cabbage seemed to delight a number of the tourists.

Maersk Inc. and Sea-Land Service, Inc. announced May 7, 1999 that they have selected the proposal from New York/New Jersey to develop a world-class deepwater port to serve the container shipping requirements of the northeast and Midwest markets well into the next century. The carriers noted that the decision was based on a thorough analysis of the proposals submitted by the ports of Baltimore, Halifax and New York/New Jersey. The carriers selected the New York/New Jersey proposal based on its favourable economics with the understanding that commitments made by port, labour and government officials will be reflected in the final agreements to be signed.

Nippon Yusen Kaisha Ltd. will make its first foray into the Montreal-Northern Europe service in early May in an attempt to capture large volumes of U.S. Midwest cargo. NYK Line will join the alliance between Maersk Line and P&O Nedlloyd just two weeks after Sea-Land Service Inc. withdrew from that partnership and the shipping lane. The Port of Montreal is the largest East Coast gateway for Northern European containerized cargo and at least half of its container traffic either originates in, or is destined for, the U.S. Midwest. While Montreal for years has benefited from competitive pricing, confidential contracting and the harbour tax at U.S. ports, those conditions have significantly changed over the last year as maritime deregulation began May 1, 1999 in the United States and the Supreme Court struck down part of the harbour maintenance tax. Still, shippers say that Montreal's gains from confidential contracting could be undermined by the Ocean Shipping Reform Act, which allows carriers and shippers to negotiate secret deals in the United States for the first time. Montreal also could be hurt by the falling rates in the U.S.-Europe trades, the result of the collapse of the North Atlantic conference structure and the harbour maintenance tax ruling.

NYK will enter the trade as an independent line while it remains in the so-called TACA-2 grouping that is waiting to replace the Trans-Atlantic Conference Agreement between the East Coast and North Europe. The Japanese carrier's announcement came just two weeks after Maersk and P&O Nedlloyd said they would continue their Europe-Montreal service on their own. Those carriers had been in negotiations to charter space from Canada Maritime Orient Overseas Container Line on a similar service. NYK will take an unidentified amount of space aboard three ice-strengthened vessels chartered by Maersk. Those vessels each are capable of carrying 1,200 20-foot containers.

Sabre announced May 12, 1999 that www.Travelocity.ca, Canada's online travel expert, is now offering its members the option of booking travel on VIA Rail Canada's passenger trains. With this feature, Travelocity.ca becomes the first, full-service, Canadian travel Web site to offer online, direct rail bookings. The feature is also available on Travelocity.com, the U.S. version of the Web site. Members will be able to purchase economy or VIA 1 travel and access schedules for VIA Rail services in the Quebec City-Windsor Corridor. Members can select their destination and preferred dates of travel after clicking on the "Book VIA Rail" button on the site's homepage. Options including travel itineraries, meal information, seating preferences and frequent traveller information are offered during the booking process. Links from the site lead members to additional information regarding other VIA Rail services in Canada, including route maps, and service classes. Tickets are distributed from their Customer Service Centre in Canada or from more than 400 participating Sabre travel agencies. Travelocity.ca provides reservations capabilities for 95 percent of all airline seats sold, more than 42,000 hotels, and more than 50 car rental companies.

A trainset for Amtrak derailed as it was being towed out of the factory for testing. One car in the eight-vehicle Acela train set came off the tracks May 8, 1999 and was pulled upright for about 500 feet before the engineer noticed and stopped, according to officials at Bombardier, the manufacturer. The company is uncertain of the cause, since the train was not under power. They are examining the quality of the tracks near the company's factory in Barre, Vermont. The derailment, in which the power remained upright, was at the end of a standard Acela train set, which has power cars on the front and back and six coach cars in between. It was not known how the derailment might affect the testing schedule until the completion of an inspection of the trainset back at the Bombardier plant. Amtrak has not formally accepted delivery of the train set, but Bombardier is under strict delivery deadlines. The trains must also meet speed-of-trip goals. The BBRX numbers were to have been: power cars 2001 & 2003, and coaches 3200, 3401, 3504, 3506, 3507, 3508.

Alstom Canada Transport in Montreal has received a C$300-million contract for 3,100 freight cars from Union Rail Corp., an initial order for new business as a builder of rolling stock. Alstom's primary business is currently remanufacturing, renovating and refurbishing locomotives, locomotive assembly for General Motors and passenger-car overhaul for GO Transit and others. Alstom is already producing 750 freight cars for First Union Rail, based in Charlotte, N.C., but this five-year order will allow the company to build freight-car assembly-line capacity for the long term, rather than divert existing capacity and workers. Alstom will invest C$4.5 million to expand the facility, and another C$4.7 million on general work. Work on the contract will begin this summer. The Province Quebec will provide about C$6.4 million of the C$20.4 million investment. The investment will bring the government C$8 million of tax revenue, Alstom purchased the plant in 1996. The global industrial services company said its work order would keep the plant busy for the next five years. Alstom said the average salary of the new employees will be C$35,000. They will include welders, labourers, mechanics and engineers.

A plan to deregulate Canada's grain transportation system moved a step closer to reality May 12, 1999 as the latest chapter in a century-old struggle to efficiently move grain to market across the vast Prairies continued. At a hastily called meeting of western farm leaders, Transport Minister David Collenette introduced the man who has the daunting task of trying to build consensus on the recommendations of Willard Estey, a former Supreme Court judge who studied the system last year. Arthur Kroeger, chancellor of Carleton University and a former deputy transport minister who helped scrap the Crow rate for grain in 1983, must get that consensus by September so Collenette can prepare legislation. Collenette also ruled out a review of just how much it costs to ship grain to market. New Democrats and some farm groups calling for the review suggest railways right now are reaping a C$200-million windfall, which distributed evenly would put C$5,000 in the pockets of each western farmer. Estey made 15 recommendations to help Western Canada's C$12-billion grain sector move crops to port and avoid costly bottlenecks like those in the 1996-97 season. He says the Canadian Wheat Board should be cut out of the process. The wheat board now has a central role in grain car allocation, but Estey wants it to become a buyer of grain at port positions. He also wants rate caps scrapped and agrees with the railways that enhanced competition will drive down costs. While Collenette said his government would use the Estey report as a framework to reform the current system, the details will be worked out by Kroeger and the committees he strikes in the next few months. Many farmers and farm groups have already rejected Estey's suggestions.

The wheels are turning on a troop deployment that will take the Lord Strathcona's Horse Regiment from their base in Edmonton to the war zone in the Balkans. The 800 troops are Canada's commitment to NATO ground forces in the Balkans. The Strathconas began loading their armoured vehicles onto trains May 17, 1999 that will carry them across the prairies to Montreal. There, together with Griffon helicopters and tons of other supplies, they'll be loaded onto cargo ships. The regiment's equipment is scheduled to sail for Greece on May 25. The 800 soldiers of the Strathconas will already be there to meet them, having crossed the Atlantic in giant Antonov transport planes that Canada bought from Ukraine. By June 9, the regiment should be ready to move to its base in Macedonia, where it will be integrated into the British Fourth Armoured Brigade. The two 83-car trains of military equipment were loaded at Canadian Forces Base Wainwright Alberta with SD40-2s 5380-5310 on the first train 5314-5401 leading the second train.

Three Saskatchewan municipalities have decided to appeal the price of a railway. However, they won't be doing it through the courts. They'll take the political route instead. Prince Albert, Saskatchewan and two rural municipalities will appeal directly to the federal minister of transportation. The minister has the authority to amend or rescind any ruling made by the Canadian Transportation Agency. In April 1999, the agency ordered the partners to pay C$300, 000 for a 34-kilometre branch line from Prince Albert to Birch Hills. The deadline to file an appeal in federal court expired May 17, 1999.

AGRA Inc. announced May 21, 1999 that its wholly owned engineering subsidiary AGRA Monenco in joint venture with SC Infrastructure and Rizzani de Eccher has been awarded a C$208.8 million contract by Rapid Transit Project 2000 Ltd. of B.C. for the design and construction of the SkyTrain extension to the rapid transit system in the Greater Vancouver Region. The extension will connect New Westminster, Lougheed Mall in Burnaby and the Commercial Drive area in Vancouver. The contract includes the design and construction of 18.1 kilometres of elevated precast guideway including special sections and station structures. Design and construction activities will commence immediately and are scheduled to be completed by the end of 2000. The project is expected to create more than 1,500 direct and indirect jobs. The SAR Transit Joint Venture consortium includes AGRA Monenco (40%), SC Infrastructure Inc., a wholly owned subsidiary of Armbro Enterprises Inc. (40%) and Rizzani de Eccher Inc., an international Italian engineering contractor (20%). AGRA Inc. is one of Canada's largest international engineering, construction, environmental and technology corporations. Following its recently announced plans to acquire Simons International Corporation of Vancouver, it becomes British Columbia's largest engineering company employing approximately 1,100 people in the province. AGRA is a leader in professional services related to infrastructure development, oil & gas, petrochemicals, forest industries, mining, consumer products, electric power, communications, pipeline and foundations construction and environmental services. With recently announced acquisitions, AGRA employs approximately 7,000 people and operates 186 offices in 24 countries. The Company's Executive Offices are in Oakville, Ontario, and its headquarters are in Calgary, Alberta. AGRA's shares are traded on the Toronto and Montreal exchanges under the trading symbol AGR.

A deal has apparently been reached that would see the City of Toronto buy historic Union Station. The city has agreed to pay C$80-million for the landmark site. Union Station is expected to be redeveloped as the hub of intercity rail and bus transportation in the Greater Toronto Area. The transit agency with the most at stake in the deal is Government of Ontario Transit, which has the use of only about 20 per cent of the station's space, even though about 80 per cent of the passengers that use the station are carried by GO Transit. At the peak period of the morning rush hour, about 30,000 GO passengers pass through the station. Without improvements on the rail platforms and in the tunnels and concourse, GO cannot increase the number of passengers it handles. Half of GO and the land the station sits on is already owned by the city, but the building is owned by Toronto Terminals Railway Co., a partnership of Canadian National and Canadian Pacific.

Télécité Inc. of Montreal Quebec has won the contract to supply their advanced Visual Communication Network displays to New York City Transit for their advanced new technology trains. Kawasaki Rail Car Inc. (of Yonkers, New York) awarded the R-143 car builder the contract to Télécité the R-143 car builder. The contract calls for Télécité to supply an in-vehicle based, multi-coloured, animated VCN system including LED displays, as well as Télécité's leading-edge, advanced wireless data transmission system and key network components. Kawasaki Rail Car is providing New York City Transit the R-143 vehicle design equipped with the latest CBTC (Communications Based Train Control) systems. The CBTC-ready R-143 cars will be operated on NYCT's Canarsie line and will serve as the precursor to future NYCT vehicle purchases. The base contract, worth approximately $2 Million US, will have Télécité providing colour displays, on-board and wayside controllers, front end network equipment, a wireless RF link to the trains and network integration, for an initial quantity of 212 vehicles. In addition, NYCT is exploring the viability of exercising an option to install additional two displays per vehicle to maximize the advertising revenue potential of the VCN system. Télécité has already supplied multi-colour LED displays for other VCN systems installed at Amtrak's Penn Station and for the JFK AIRTRAIN project. Founded in 1986, Télécité provides advanced passenger information display systems and networks for the public mass transit and airport markets.

Canada's Bombardier group said May 24, 1999 that is has won a C$655-million (US$445 million) contract with New York's Metropolitan Transit Authority/Long Island Railroad to replace a fleet of suburban trains. The total amount of the contract may reach C$2.7 billion dollars (US$1.85 billion) if all options within the contract are realized. The MTA commuter agencies together are the largest commuter railroad network in North America, serving more than 500,000 riders every weekday. Under the contract, Bombardier will provide the MTA with 192 electrical multiple unit commuter cars between 2002 and 2003. The contract also includes options for up to 808 additional cars that would be supplied to MTA commuter railroad agencies, the LIRR and Metro North Railroad.

The Toronto Transit Commission, kicked off a "Share the Gas Tax" Campaign on May 11, 1999 asking the province to share gas tax revenue to fund public transit. By example, a one-cent per litre gas tax across Toronto would generate annual revenue in the range of C$19 million to C$28 million. Across the Greater Toronto Area, the same one-cent per litre gas tax would generate between C$47 million and C$53 million per annum. In Canada, both Montreal and Vancouver receive funding based on gas taxes; 1.5-cents per litre from Montreal and surrounding area and 4-cents per litre on all car fuel sold in the area served by Vancouver Transit. In the United States, Federal Gas Taxes on gasoline dedicated to transit total US$30 billion over 5 years.

City Transport '99, with more than 280 exhibitors from 17 countries, was held at the Metro Toronto Convention Centre, 255 Front St. W. About 15,000 visitors and transit industry professionals from around the world were expected to visit the exhibition the last week of May 1999 during the International Union of Public Transport's (UITP) Congress, being held for the first time in Toronto, Ontario. Congress organizers say it's one of the few times so many transit vehicles have been on display anywhere under one roof. Numerous vehicles were on display, including state-of-the-art rail transit cars, a new low-floor tram (or streetcar), and low-emission buses. Also being showcased was the most recent technologies available for public transportation, such as satellite systems, automated fare collection, ticketing systems, and smart cards. All the major European, U.S., and Canadian transit manufacturers and suppliers were represented, including Bombardier, Adtranz, Siemens, and Ansaldobreda. Many of the exhibitors were unveiling new products at the show, such as the new low-floor tram, from Italy, and a lightweight fibreglass-composite bus from the United States. The TTC made a payment of C$101.3 million, toward the purchase of 372 T-1 Subway Cars, manufactured by Bombardier Inc. At present, about 200 of the 372-car order are in service.

Prior to the closing ceremony for the International Union of Public Transport 53rd Congress and City Transport Exhibition, TTC Chair Howard Moscoe presented the cheque to Mike Hart, Bombardier Vice President, Sales and Marketing Canada. The presentation took place at 9:30 a.m. on Thursday, May 27, at the Bombardier Booth, South Hall, Metro Toronto Convention Centre. From the outside, the T-1 cars look just like the present aluminum subway cars, except that the doors are wider; a full five feet. Inside, fewer obstructions allow for better passenger flow and air conditioning is standard. Each T-1 car has wheelchair positions near the doors. The total cost for all 372 cars is C$861.5 million. The last cars are scheduled for completion in 2001.

REALM Group Inc. announced that the newly designed web site for Rapid Transit 2000; the SkyTrain extension project for British Columbia's Lower Mainland has recently gone live on the Internet (http://www.rapidtransit.bc.ca). Rapid Transit 2000 is one of the largest public transportation projects being undertaken in North America. The first section of the new SkyTrain line, from New Westminster to Lougheed Mall, will be operational in early 2001, with the rest of the line, from Lougheed Mall to Vancouver Community College, complete by late 2001.

Bombardier Transportation has joined a consortium to bid for contracts to upgrade and maintain London's subway system, through a public-private partnership proposed by the British government. The Montreal-based Company said it would join John Mowlem and Co. of Britain, American engineering giant Fluor Daniel, and French electronics company Alcatel, in a consortium to bid on contracts. The British government intends to split the London Underground network into three infrastructure companies, which together are expected to invest more than C$20.8 billion to rejuvenate and upgrade the British capital's aging subway network, locally called the tube. In return, the private companies will be offered 25-to 30-year concession contracts to manage and maintain the infrastructure.

Bombardier intends to pursue continued growth in rail transportation and is committed to doubling its worldwide sales in this sector within the next five years, said Jean-Yves Leblanc, President and Chief Operating officer of Bombardier Transportation on May 26, 1999. Mr. Leblanc said Bombardier Transportation will continue building on its core expertise in passenger-rail rolling stock, while could amount to C$2.7 billion if all options were exercised, is a strong confirmation of Bombardier Transportation's intent and ability to achieve its objectives.

A fair share of its growth over the next five years is expected to come from new activities, including new products such as freight cars and new services like operations and maintenance. He noted that current projects such as the Virgin Rail contract in the United Kingdom and the AIRTRAIN automated rapid transit system at New York's JFK International Airport-both of which include provisions for long-term maintenance-have provided Bombardier with a springboard into the maintenance end of the market. Mr. Leblanc outlined his organization's growth strategy during a press briefing at the UITP Congress and City Transport 1999, where senior executives from Bombardier Transportation's global network shared their views on the state of the industry and responded to questions from the media. Other participants included: Jacques Lapare, President, North America; Javier Rion, President, Mexico and Latin America; Bernard Dolphin, President, Atlantic Europe; Peter Witt, President, Continental Europe; and William Spurr, President, Transit Systems. Bombardier Transportation officials say the outlook for the North American market is particularly strong, with anticipated growth of 50 percent in demand for rolling stock over the next five years in Canada and the United States. Mexico and Latin America also offer a number of avenues for expansion, including vehicle maintenance and increased demand for freight cars resulting from the privatization of railways. Furthermore, Bombardier Transportation's Mexican plant represents its lowest-cost manufacturing facility within the scope of NAFTA (the North American Free Trade Agreement). Growth of almost 20 percent is anticipated over the next five years in Western Europe, where Bombardier Transportation already had landed what was its biggest-ever project, the C$2.6-billion Virgin Rail contract. Bombardier points to this project to illustrate the flexibility and capabilities of its global network of 24 plants.

Engineering work on the Virgin Rail project is being performed at four different European locations, which will also share the manufacturing of the 78 trainsets involved. Bombardier's extensive operations in Germany-which remains the world's single largest rail market-also give it a foothold in Eastern Europe, where pent-up demand is expected to create significant opportunities over the longer term.

Elsewhere, a recent joint-venture initiative for the manufacture of passenger-rail vehicles in China represents an important milestone in further penetration of key Asian markets. And Bombardier Transportation sees excellent growth possibilities in the supply of turnkey urban transit systems, such as the just-completed ART (Advanced Rapid Transit) project in Kuala Lumpur, Malaysia.

In its relatively short, 25-year history, Bombardier Transportation has made a name for itself as an established supplier to transit authorities in leading cities ranging from Berlin, London and Paris to New York, Los Angeles, Montreal, Toronto, Vancouver and Mexico City. With sales of almost C$3 billion for the fiscal year ended January 31, 1999-up sharply from C$1.69 billion a year earlier-and a record order backlog of some C$9.3 billion, it is determined to sustain the momentum. Summing up Bombardier Transportation's prospects, Mr. Leblanc qualified them as promising. "I believe we have in place the elements required for continued success-a strong global organization with highly committed employees and an entrepreneurial spirit, backed by a core of excellence in manufacturing and an unmatched network of plants across the world." Bombardier Transportation, a world leader in the manufacturing of passenger rail cars, offers a full range of urban, suburban and intercity vehicles as well as complete rail transit systems worldwide. It also manufactures freight cars and provides operations and maintenance services.

CANADIAN NATIONAL RAILWAY

Canadian National must address the problem of switches after last month's fatal crash of a passenger train at Thamesville, Ontario. Transport Canada officials monitoring the investigation of the accident in which two people were killed determined "a severe threat exists" in so-called dark territories where operation of switches is done manually. The federal transport minister noted "it is a serious problem when the federal regulator under the Railway Safety Act asks an operator within 10 days to come back and tell us what they are doing to ensure a threat is eliminated or will be eliminated." CN must file the plan before the ministry can declare the tracks safe. The order affects the line west of London to Windsor, Ontario. In response, Canadian National announced it would spend C$25-million to install centralized traffic control signalling on the Chatham subdivision between Komoka, west of London, and Windsor Ontario. In addition, CTC will be installed on the double-track Grimsby Sub from mileage 43.7 to mile 11.8.

Canadian National announced May 26, 1999 C$13-million investment in dual-mode RoadRailer equipment in its drive to become more competitive in short-haul freight transportation markets. CN is acquiring 200 RoadRailer Mark V highway trailers and 130 RoadRailer railroad bogies for daily Toronto-Montreal service starting in early August. CN will operate dedicated terminals in the two cities. CN will run trains of 60 RoadRailer trailers in each direction between Toronto and Montreal, with daily departures scheduled for 2100 hours and arrivals the next morning at 0500 hours. Train length will increase as demand warrants. The trailers will transport consumer goods, including foods, beverages, and paper and building materials. RoadRailer will replace CN's existing bimodal EcoRail technology in the Toronto-Montreal corridor.

Canadian National is removing tracks of its Montmagny Subdivison between Etchemin River Bridge in St-Romuald and Harlaka (Lauzon). A track removal train arrived on Monday May 10 and began removing tracks at St-Romuald on May 17, 1999. Train with locomotives SD40u's #6018 and #6009, 27 rail carrying cars and a 4-car removing/loading machine moves eastward at a rate of about 1 mile per day. Train operated on weekdays between 0800 and 1600. Each night the train is parked at the nearest, secure spot. It will probably terminate its job at Harlaka around May 21. Tracks were removed from in front of the Levis station May 17, 1999.

Canadian National announced May 24, 1999 that ZIM Israel Navigation Company has chosen CN as its inland rail carrier for a new container ship service between Asia and North America. The inaugural vessel, the ZIM Vancouver, arrived on the 24th in the Port of Vancouver. Two dedicated doublestack unit trains will depart Vancouver May 25, 1999, one destined for the U.S. Midwest and the other for Central Canada. ZIM Israel Navigation Company is a major international container carrier. ZIM cited the Port of Vancouver's automated container terminals and direct rail links to the U.S. Midwest for choosing it as the first port of call. The new ZIM Pacific Service will capitalize on the strong demand for Asian imports in North America.

CN will run two weekly dedicated doublestack unit trains to the U.S. Midwest and Toronto and Montreal for the new ZIM Pacific Service, in addition to its existing daily doublestack service between Vancouver and Chicago and Vancouver and Central Canada. The ZIM Pacific Service has six vessels; the ships have an individual capacity ranging from 1,400 to 2,000 TEUs (20-foot equivalent containers). The vessels will depart from Shekou, China, calling at Hong Kong, Shanghai, Pusan, Vancouver, Long Beach, Oakland, Seattle and then return. CN has been ZIM's inland rail carrier from the Port of Halifax for over 25 years.

The United States Surface Transportation Board (Board) Chairman Linda J. Morgan announced Tuesday May 25, 1999 that the Board has issued its written decision carrying out the Board's earlier March 25, 1999 vote in open conference granting, with conditions, the consolidation application filed by Canadian National (CN) and Illinois Central (IC). The Board's decision concerning this railroad merger was issued some ten months after the July 15, 1998 application was filed, and on the date scheduled by the Board. The decision applies the statutory public interest standard for Board consideration of major railroad mergers and consolidations. The Board noted that the merger will create a highly efficient rail transportation system spanning the central part of the United States from the Canadian border to the Gulf of Mexico, allowing applicants to provide stronger competition, especially for NAFTA traffic, with the major Class I railroads. The Board also noted that the merger should generate quantifiable public benefits of more than US$100 million a year, mainly through integration of support functions and more efficient use of equipment and crews. The Board further noted that this "end-to-end" merger, which was supported by more than 240 parties, including more than 190 shippers, would not reduce competition at any location. Additionally, the Board noted that unions representing the majority of applicantsþ employees support the merger.

The Alliance and Access Agreements: The Board fully considered and rejected arguments that two agreements between The Kansas City Southern Railway Company (KCS) and applicants, the Alliance Agreement and the Access Agreement, transformed the CN/IC merger into a three-way CN/IC/KCS merger. The Board concluded that these agreements did not bring KCS into common control with applicants.

Conditions Imposed by the Board: The Board imposed the following conditions.

• Geismar Shippers: In 1995, KCS sought regulatory approval to build a line to reach three KCS-served shippers (BASF, Borden, and Shell) in Geismar, Louisiana. The CN/KCS Access Agreement provides for KCS access to these shippers via haulage rights over IC. Three additional IC-served Geismar shippers (Rubicon, Uniroyal, and Vulcan) argued that this agreement would eliminate KCS's incentive to construct the line, which would also have enabled KCS to reach Rubicon, Uniroyal, and Vulcan. To ensure that the Access Agreement, which is contingent upon approval of the merger, does not reduce competition for these shippers, the Board imposed a condition requiring applicants to grant KCS access to Rubicon, Uniroyal, and Vulcan under the same terms that govern KCS's access to BASF, Borden, and Shell.
• North Dakota: North Dakota argued that the merger would eliminate or impair an efficient routing via the Chicago gateway for agricultural commodities moving to the Gulf Coast. These commodities originate in North Dakota on the Soo Line, and are interchanged at Chicago with IC for transport to the Gulf Coast. To protect this gateway, the Board imposed a condition holding applicants to their representation that they will keep it open and competitive.
• Detroit River Tunnel: CN and Canadian Pacific (CP) each holds a 50% interest in the Detroit River Tunnel between Detroit, Michigan, and Windsor, Ontario. CN also has a 100% interest in the recently built St. Clair Tunnel at Sarnia, Ontario. CP argued that, because CN now has access to a more modern tunnel and CP does not, CN has an incentive to use its 50% interest in the Detroit River Tunnel to thwart any effort by CP to expand or replace that tunnel. To protect CP's position, the Board imposed a condition holding CN to its commitment not to exercise unfairly any rights it may have under the CNCP Partnership Agreement to block needed proposed tunnel improvements.
• Rail Labour: In approving major rail mergers, the Board is required by statute to impose "labour protective conditions" for the benefit of the employees of the applicant railroads. The Board imposed its traditional New York Dock conditions, with certain additions and clarifications. The Board augmented the New York Dock conditions to provide that, if CN/IC work is moved to Canada, CN/IC's United States employees who choose not to follow their work to Canada will not be deemed to have forfeited their New York Dock protections. The Board also clarified that good faith bargaining has always been an integral part of the New York Dock process, and that an arbitrator may take notice of any failure to bargain under that process. The Board imposed as conditions specific settlement agreement applicants reached with major unions. The Board also clarified that approval of the merger did not indicate approval or disapproval of any particular collective bargaining agreement overrides, and that such issues should be resolved through negotiation, if possible, or arbitration as necessary. The Board noted that applicants had acknowledged the importance of prior labour agreements. Furthermore, the Board clarified that safety would continue to be monitored in the implementation process, and that specific consultation with the Federal Railroad Administration (FRA) would take place regarding any transfer of the dispatching function to Canada.
• Environmental Matters: To fulfill its obligations under the National Environmental Policy Act, the Board's Section of Environmental Analysis (SEA) prepared a thorough Environmental Assessment, which analyzed 19 topics, including safety, hazardous materials transport, and environmental justice. In its environmental review process, which included public review and comment, SEA concluded that the transaction would result in system-wide environmental benefits and that there would be potentially significant environmental impacts only with regard to hazardous materials transport safety and related environmental justice impacts. SEA proposed 15 conditions addressing those and other effects, and the Board imposed these conditions, the majority of which address safety. With respect to safety integration issues, the Board required CN and IC to develop and comply with a detailed safety integration plan (SIP) explaining how each step in implementing the transaction would be performed safely. Because safety integration is an ongoing process, the SIP will continue to be modified and refined as this transaction moves forward. The Board and the FRA also entered into a Memorandum of Understanding regarding the ongoing safety integration process.
• Oversight: Various parties expressed concerns over potential harms that might flow from the merger. In response, the Board imposed an oversight condition of up to 5 years, to enable the Board to address: concerns expressed by the United States Department of Transportation and others regarding the operation of the Alliance Agreement, particularly on competition in the Baton Rouge-New Orleans corridor; concerns expressed by North Dakota with respect to the Chicago gateway; concerns expressed by CP with respect to the Detroit River Tunnel; concerns expressed by certain labour unions with respect to future unauthorized common control of applicants and KCS; and concerns with respect to rates for lumber shippers. The oversight process will also enable the Board to monitor the environmental conditions it has imposed.
• KCS Trackage Rights Application: The Board denied CN/IC/KCS terminal trackage rights application that sought, for a KCS affiliate, terminal trackage rights over several miles of Union Pacific and Norfolk Southern track in Springfield, IL. The Board ruled that, because the terminal trackage rights had no real connection to the merger, the application would have to be evaluated on the basis of the criteria generally applicable to such applications, which this application failed to meet.

Chairman Morgan, Vice Chairman William Clyburn, Jr., and Commissioner Wayne O. Burkes commented with separate expressions. A printed copy of the Board's written decision in Canadian National Railway Company, Grand Trunk Corporation, and Grand Trunk Western Railroad Incorporated--Control--Illinois Central Corporation, Illinois Central Railroad Company, Chicago, Central and Pacific Railroad Company, and Cedar River Railroad Company, STB Finance Docket No. 33556 (Decision No. 37), is available for a fee by contacting: D.C. News & Data, Inc., Room 210, 1925 K Street, N.W., Washington, DC 20006, telephone (202) 463-8112. The decision is available for viewing and downloading via the Board's website at http://www.stb.dot.gov.

Hard on the heels off the merger decision Illinois Central E8Au's 102-103 are being readied for service in Woodcrest Illinois and are to be painted in the CN 1950's passenger scheme. In addition, it is expected painting of some twenty Illinois Central locomotives into the CN scheme per annum will begin as well.

As of 10:00 May 6, 1999 a power-operated self-restoring derail is in service at the West End of Aldershot yard on track KA31. Aldershot Yard is located on CN's Oakville Subdivision between Burlington West and Bayview Junction near Hamilton, Ontario. The new derail replaces two flop-over derails that used to be on tracks KA31 and KA32. There are now stop signs located 100 feet either side of the derail. The procedure is as follows: The train stops at the stop sign, pushes a button in a box, and the derail will removes itself from the rail. After the movement clears the circuit, the derail automatically restores itself and a synthesized voice is heard on CN channel 1, 161.415 Mhz is heard confirming the restoration of the derail. Apparently the voice was initially female but was then changed to a male voice. This voice has a different intonation than the voice heard on hotbox and dragging equipment detectors.

On April 30, 1999, another move of English Welsh and Scottish class 66 locomotives operated from Toronto to Moncton, with CN SD75 5733, hauling EWS 66-106 to 66-116 inclusive. In addition, he lifted, from the Don Yard in downtown Toronto, Thamesville accident locomotive VIA F40PH 6423 with two covered hoppers as idlers, restricted to 25 MPH, and set these three pieces off at Coteau, for interchange to the Ottawa Central. The 6423 is now at the National Research Council for examination. On May 20 EWS 66-117 to 66-127 left Toronto on CN 306, units 5783-5370, 71 loads, 24 empties., 7665 tons. From Joffre, Quebec GP40-2 9581 handled them as a special train for the remainder of their trip to Halifax.

Emergency workers evacuated the New Brunswick town of Chipman after Canadian National Railways train carrying propane and toxic chemicals derailed. Officials say more than 100 families were moved out of the town about 60 miles (96 km) northeast of Fredericton, New Brunswick, where at least 12 rail cars of a Canadian National freight train derailed on May 30, 1999. The eastbound train was headed to Moncton, NB. Officials say the train had several propane and chemical tanker cars that posed a threat to local residents. Emergency personnel including Royal Canadian Mounted Police and ambulance drivers are on stand-by near the scene. No injuries have been reported. Department of Transport officials say an investigation is under way.

CN "class" unit SD40 5000 has travelled to the following locations since March 16, 1999: Capreol ON, Montreal QC, Toronto ON, Halifax NS, Toronto ON, Capreol ON, Toronto ON, Flat Rock MI, Toronto ON, Edmonton AB, Vancouver BC. Jasper, AB, Prince Rupert BC, Terrace BC, Prince Rupert BC, Edmonton AB, Symington MB, Edmonton AB, Symington MB, Toronto ON, Symington MB, Thunder Bay ON, Symington MB, Toronto ON, North Little Rock, Arkansas as of May 18. CN 5000 was on the way back to the GTW (with SD75 5754), out of Simbco, Illinois at 0618 May 20, 1999 and was expected back to the GTW off the EJ&E at Griffith IN around 2250 on May 20. This is utilization of motive power.

CANADIAN PACIFIC RAILWAY

No one was injured when 22 of the 69 cars on a Canadian Pacific freight train derailed Sunday May 2, 1999 while en route to Chicago. The train, which originated in Montreal and was running from Detroit to Chicago, derailed about 3:10 p.m. Sunday. Damages were confined to the track, railbed and cars and the cause of the accident was still under investigation. Webberville, population 1,698, is about 30 kilometres east of Lansing, Michigan.

Canadian Pacific Railway has signed a contract with China Ocean Shipping Company that firmly establishes the railway's Vancouver-Chicago corridor as the new competitive choice for shippers in the huge Midwest U.S. market for trans-Pacific containers. COSCO will launch in May a new trans-Pacific container service, and for the first time will use the Port of Vancouver as the gateway to U.S. destinations with CPR as the land carrier to Chicago. CPR is the only rail carrier that can move freight from the Port of Vancouver to Chicago over its own track.

CPR has primed its Vancouver-Chicago corridor for trans-Pacific container traffic growth by making large investments to expand track capacity and increase train speed. The CPR and the Port of Vancouver have been long-time partners in handling COSCO's Canadian traffic, with vessels calling first at U.S. ports to discharge their U.S.-bound containers. This is the first time that COSCO will use Vancouver as the gateway to U.S. destinations. COSCO's new weekly service departs Dalian and calls at Xingang and Qingdao in China, and Kobe, Japan, en route to Vancouver. CPR's single-line routing takes COSCO's traffic from Vancouver to Moose Jaw, Saskatchewan, then south through North Dakota, the Twin Cities and Milwaukee and into Chicago where CPR has first-rate connections with all the major U.S. railways for traffic moving to other U.S. destinations. On the East Coast, CPR also handles transAtlantic and Mediterranean container traffic for COSCO through the Port of New York/New Jersey.

In addition, Canadian Pacific Railway continued to make gains in trans-Pacific container traffic over its Vancouver-Chicago corridor, announcing May 19, 1999 a contract with Norasia Line. Swiss-based Norasia this month will launch its first foray into trans-Pacific service, with the Port of Vancouver as the North American gateway and CPR as the land carrier moving containers on double-stack trains directly into Chicago over its own track. Norasia's new service departs Laem Chabang, Thailand and calls at Port Kelang and Singapore, Malaysia; Jakarta, Indonesia; Hong Kong; Keelung, Taiwan; and Pusan, Korea, en route to Vancouver. Norasia already provides transAtlantic and Mediterranean container service into Montreal. With the launch of its trans-Pacific service, Norasia will serve the Canadian and U.S. Midwest markets through Canadian gateways on both coasts, with CPR as the rail carrier.

Thirteen cars from a 72-car train left the tracks near Chelmsford, about 15-kilometres west of Sudbury on May 24, 1999. The engineer and conductor on board were not hurt. A CPR official says one tank car spilled its load of calcium chloride, a dust suppressor, but says the material is not hazardous. An enclosed freight car containing concrete products was also punctured and several of the cars had their wheels torn off. Investigators haven't discovered what caused the derailment. CP said the tracks were to be cleared by May 25 and opened to limited traffic. The derailment damaged about 300 metres of track. Due to CP's derailment in Chelmsford, Ontario, a number of CP freights were detoured over CN through Northern Ontario. 411: AC4400CW 8549, SD90MAC 9140; 491: SD40-2F 9009, SD40-2s 5902-5694; 402: SD40-2s 5874-6048-5732; 403: AC4400CW 9560, SD90MAC 9135; 402: SD40-2F 9003, SD90MAC 9645, SD40-25954; 472: SD40-2s 5908, 6056, 831.

Canadian Pacific Railway has entered into an outsourcing arrangement with RIS Resource Information Systems for selective computer applications support and maintenance. Under the arrangement, RIS will be responsible for support and maintenance of CPR's Finance and Accounting Applications and Intermodal Applications currently being maintained out of Toronto. Approximately 25 CPR employees located in Toronto who are currently working on these applications will be able to join RIS and pursue their Information Technology careers with RIS in Toronto. RIS will support and maintain CPR's Finance and Accounting Applications and Intermodal Applications out of Toronto until the applications are either replaced or retired. CPR has aggressive plans for service improvement and cost reduction and needs the assistance of Information Technology to help meet these strategic goals. Selective outsourcing enables CPR to focus its internal Information Technology expertise on implementing new computer applications and IT services at CPR to help meet corporate goals.

A tremendous amount of work is required to position Canadian companies and Canada in the global economy of the 21st century, said David O'Brien, Chairman, President and CEO of Canadian Pacific Limited. In an address on May 19, 1999 to the Calgary Chamber of Commerce, Mr. O'Brien warned business leaders that to survive and prosper in the 21st century, Canada faces two critical challenges. The first is to make Canada a better place to invest so that we can attract new capital, create new jobs and retain highly skilled workers. The second challenge is to develop more Canadian-based, internationally competitive companies. Canada is sliding down the global competitiveness scale and unless Canada improves its competitive position, the country's standard of living will continue to decline compared with the rest of the developed world. To create a better environment for investment, Canada needs meaningful tax relief, increased productivity and greater innovation. Mr. O'Brien said that "human and financial capital goes where the growth prospects are brightest and the rewards the highest, and, today at least, that place is not Canada". Canada also needs to develop more companies that have the size, scale and skills to compete internationally. Most of our large corporations are small in scale compared with their competitors in other countries, partly because of our relatively small domestic markets.

This makes it all the more important for Canadian companies to build stronger competitive positions at home so they will become effective players in the international arena. Without a sufficient number of successful international flagship companies, the brain drain from Canada will be accelerated and Canada's largest companies will have a difficult time even defending their home markets.

Canadian Pacific Railway (CPR) and the Canadian Council of Railway Operating Unions (CCROU), representing approximately 4,400 train crew personnel, announced May 24, 1999 that a four-year contract settlement (January 1, 1999 to December 31, 2002) has been reached. The settlement is subject to ratification by CCROU members, a process expected to take approximately five weeks. The CCROU is comprised of two international unions, the Brotherhood of Locomotive Engineers (BLE) and the United Transportation Union (UTU). The first major railway labour settlement to extend beyond 2000, the tentative agreement provides for wage increases of two per cent in each of the four contract years. In addition to benefit and pension improvements, the agreement contains provisions for improved productivity by allowing greater flexibility in training and scheduling. The agreement also renews gainsharing, pay for performance program designed to improve customer service and safety as well as reduce costs. CPR currently has national agreements in effect with all of its Canadian unions, representing roughly 13,400 employees.

CPR will soon bring into full revenue service its new short-haul intermodal freight system that it has been testing for more than two years in the Montreal-Toronto corridor. CP has invested C$48 million to expand this innovative service. New railway equipment combined with the construction of three new terminals will allow for the introduction of full revenue service between Montreal and Toronto and its extension to Detroit by the end of 1999.

More than two years of successful commercial trials in the Toronto-Montreal freight corridor, using Iron Highway equipment, has enabled CPR to commit itself to this innovative concept. To be named "Expressway" when new equipment and terminals are operational, the service is designed to work in partnership, rather than in competition, with truck operators. It reduces fuel and tractor investment costs, is an effective way to deal with driver shortages by reducing the need for unpopular over- night runs, and allows big highway trailers to avoid crowded roads. It supports the dock-to-dock trucking industry with: scheduled, fast train runs that approximate truck transit times between cities; 15-minute terminal turn-around times for drivers picking up and delivering trailers; the ability to carry highway trailer bodies as they are, without heavy and expensive reinforcement. Using 240 new platforms produced by National Steel Car in Hamilton, Ontario, Expressway will soon boast enough railway equipment to provide a total of 60 trailer slots in each of four specially designed trains. This is triple the load capacity of the test project. There will be two 60- trailer trains each day in each direction. A new terminal west of Greater Toronto in Milton will be opened this summer. Another new terminal will subsequently open in Montreal, with a third slated for Detroit by the end of 1999. The Toronto and Montreal centres will replace existing facilities while the opening of the Detroit terminal will mark extension of the service west of Toronto for the first time. Truckers will be able to make reservations for the next available train departure by phone, fax or the Internet, with terminal check-in via hand-held computers like the ones used at some airport car-rental lots. CPR decided to continue and expand it after truck carriers participating in the pilot project accepted it as an effective alternative for intercity road hauls in corridors where railways had not previously been contenders for time-sensitive shipments. The 24 train departures each week between Toronto and Montreal have attained an on-time performance average of 95%.

VIA

Via Rail has been ordered to pay up to seven years in lost wages and benefits to a former train chef fired while on sick leave. The Canadian Human Rights Tribunal also instructed VIA to allow John Mills of Louisbourg, N.S., to return to his Halifax based job with full seniority. Mills filed a complaint with the Canadian Human Rights Commission in 1992, alleging that Via Rail would not allow him to return to work after he injured his back while working. The Federal Court eventually overturned that complaint. In 1994, he filed a second complaint after he was fired by VIA while still on sick leave, alleging that his employer discriminated against him because of his disability. The tribunal findings, said that VIA was at fault since it had no physical standards for on-board jobs that it could compare to Mills's ability, and no testing to see what he could lift. Via Rail was also ordered to pay Mills C$3,000 for hurt feelings.

Via Rail announced it will operate a once-weekly tourist train, to be known as the Bras d'Or, between Halifax and Sydney, Nova Scotia in the year 2000. The plan was welcomed yesterday by Cape Bretoners who have been lobbying for restoration of regular passenger service since it was cut by Via Rail a decade ago. A via Rail spokesman, says the company has no plans for anything beyond the tourism-related initiative. The train will accommodate up to 186 passengers with a one-way ticket costing C$210.00.

VIA 88, which operates in part on the Goderich-Exeter operated Guelph Subdivison May 6, had CN SD60F 5518, AMTRAK B32-8 Pepsi Can 512, and VIA F40PH 6421. The CN SD60F was added because the VIA crew were not familiar with the operation of the Amtrak locomotive. VIA 88 is the Chicago-Toronto run. The four cars on the train were AMTK 35011, 34049, 34063, 35005.

The American Orient Express is due to arrive in Halifax Nova Scotia three times this summer. It arrives at 1700 July 15, July 25, and August 4, and leaves at 0925 on July 18, July 28, and August 7. The power is expected to be freshly painted CN GP40-2's 9671 and 9672 with one Amtrak F40.

Here's the consist of the first 30-car Canadian, VIA No. 1, westbound, of 1999! VIA F40PHs 6442, 6445, 6431, Baggage car 8605; coach 8125, 8122; Skyline Domes (lounge, Coffe Shop, 24 seat diner, 24 seat dome) 8504, 8515; Manor Sleepers (3 sections, 4 roomettes, 1 compartment, 5 double bedrooms) 8318, 8336, 8332, 8321; Skyline Dome 8517; Manor Sleepers 8341, 8311, 8329; Diner (48 seats) 8414 Manor Sleepers 8310, 8303; Chateau Sleeper (3 sections, 8 roomettes, 1 drawing room, 3 double bedrooms) 8206, 8201, 8223; Skyline Dome 8516; Chateau Sleeper 8229, 8228; Manor Sleeper 8338, 8322, 8342; Diner 8402; Manor Sleeper 8339 Chateau Sleeper 8225, Manor Sleeper 8309; Park Sleeper Buffet-Lounger Dome Observation (1 drawing room, 3 double bedrooms, 24 seat done, lounge) 8708.

SHORTLINES

RaiLink Ltd. announced May 4, 1999 the financial results for the first quarter of 1999. Net income for the quarter ended March 31, 1999 was $844,000 ($0.10 per share) compared to C$563,000 ($0.08 per share) for the corresponding quarter in 1998. This represents a 25% increase in earnings per share and a 50% increase in net income. Operating income increased by C$1 million to C$1.7 million for the quarter ended March 31, 1999, an increase of 145% over the corresponding period in 1998. For the quarter ended March 31, 1999, RaiLink achieved record operating revenue of C$11.9 million, representing growth of 63% from the C$7.3 million in operating revenue for the corresponding period in 1998. RaiLink's operating ratio (being operating expenses as a percentage of revenue) for the quarter ended March 31, 1999 was 85.8%. This equates to an improvement of 4.7 points from the 90.5% ratio reported in the first quarter of 1998, and a 1.8 point improvement from the 87.6% ratio reported for the year ended December 31, 1998.

RaiLink's Ottawa Valley property had an excellent first quarter. Strong traffic levels produced operating revenues and income that exceeded both expectations for the quarter and the prior year's results. RaiLink's Mackenzie Northern property continued to experience difficulties. Its performance in the first quarter was below expectations due to traffic levels for fuel oil and grain being below target. Seasonal movements of fuel oil to Canada's north were down due to a reduction in demand resulting from warmer winter weather than normal, reduced mining activity, and a shorter shipping season due to late establishment of the northern ice road network. Grain traffic continues to lag as well, generally mirroring the decline in grain traffic in 1999 experienced by both of Canada's major railways.

RaiLink's 1999 first quarter results include equity in income of its 26.3% owned affiliate, Quebec Railway Corporation (QRC) of $186,000, an increase of $4,000, or 2% from the same period in 1998. QRC's 1999 results were negatively impacted by lower than expected traffic from forest product shippers on two of its lines. At the end of February 1999, QRC commenced operations on a 118-mile addition to its Chemin de fer de la Matapedia property and completed the acquisition of a railcar ferry that operates between Baie Comeau and Matane, Quebec. RaiLink commenced operations on March 21, 1999 on 271 miles of track located northeast of Edmonton, Alberta. The acquisition of the line from Canadian National was originally announced in August 1998 but the closing of the transaction and the start-up of operations were delayed pending completion of labour negotiations by CN related to the sale. The transfer of operations went well and initial operations are proceeding as expected.

RaiLink announced after stock markets closed May 17, 1999 that RailAmerica is offering C$8.75 per share in cash, a 9.4 per cent premium over the stock's closing price of C$8.00 in a deal valued at C$73.2 million. RailAmerica has 14 railroads with 9,000 kilometres of routes in eight U.S. states, Australia, Canada and Chile. It also owns Kalyn/Siebert Inc., a truck trailer manufacturer with factories in Gatesville, Texas, and Trois-Rivieres, Quebec. RaiLink had been looking for companies interested in a merger, buyout or alliance since February 1999, after U.S. short line operator OmniTrax Inc. of Denver rapidly bought up 24.8 per cent of RaiLink's outstanding common shares. At the time, RaiLink adopted a short-term shareholders right plan or poison pill to ensure fair treatment of all shareholders. The C$8.75 per share offer is substantially more than RaiLink's share price of C$4.55 before it adopted the poison pill. The stock has traded as low as $4.55 and as high as $12.00 in the past year.

CANAC Inc. has been awarded two contracts with a total value of more than C$17 million for construction and reconstruction on the Roberval-Saguenay Railway, owned by Alcan Smelters and Chemicals Ltd. Part of a C$2.2 billion project to build the new smelter in Alma, Quebec, this contract calls for the reconstruction of the 28-km Port Alfred-Jonquiere line and the 16-km Alma-St-Bruno line, as well as the construction of 11-km of new track at the new plant site in Alma. According to the contracts which were awarded by Alcan following a call for tenders earlier this year, CANAC will supply the labour and all the specialized railway equipment, as well as the ballast required to refurbish and build the three sections of the Roberval-Saguenay railway. Alcan will provide the wooden ties and rails for the project. The work will be completed in 1999 with a small amount carried into the summer of 2000.

BC Rail M420(W) 642, the star of Atomic Train, was purchased by Genesee Valley Transportation. The unit arrived in Scranton, PA, at 1800 hours on Saturday May 15, 1999. It's a running unit and is in the shop to be Americanized with ditch lights fore and aft, some pilot changes, GVT heralds and other items. After that, it'll be shipped north to work in the Utica, NY area.

Residents and visitors to the British Columbia's Okanagan Valley will soon be able to ride the rails off The Okanagan Valley Wine Train starting Friday, June 4, 1999, departing Kelowna British Columbia at 5:00 pm using former VIA passenger cars. The Okanagan Valley Wine Train will operate with 11 cars and can accommodate 450 passengers in three different seating options. Special Event Bookings can accommodate up to 1000 passengers. Operated by FUNTRAIN CANADA INC. over Canadian National Railway lines, the train promises to add value to the regional economy and offer a boost to British Columbia's tourism industry. The Wine Train is a division of Nagel Tours of Edmonton Alberta, which has been serving Canadian motorcoach travellers for over 22 years. The six hour journey on the Okanagan Valley Wine Train will operate Wednesday through Saturday departing at 5:00 pm and Sundays at 11:00 am through October 31st, with special feature trips celebrating the annual Okanagan Wine Festival, Christmas, and the Eve of the Millennium.

Cando Contracting's Central Manitoba Railway (CEMR) commenced operation Sunday, May 2, operating the former CN Pine Falls and Carman Subdivisions. Their interchange point will be Symington Yard. It appears that Central Manitoba have renumbered their four ex-CN GP9u's 4007, 4020, 4025, 4026 to, 4000-4003. CEMR 4003 was at Lambton Diesel, Sarnia, and was then sent to the Magma Frame Plant in St. Thomas, Ontario to join SW1200 1110 and SW1200RS 1329. The number of loaded railway cars emerging from this new automotive frame plant have increased substantally, and the two smaller switchers were unable to handle the increased traffic load.

It is expected that North America Railnet will be taking over the CN Grande Cache and Grande Prairie Subdivisons as of June 19, 1999. Motive power may well be leased GE units from the Livingston Rebuild Center's fleet, of models C30-7, B30-7, and B23-7.

RaiLink Ottawa Valley will be moving The Ringling Brothers, Barnum and Bailey Circus train (54 cars) from Romford Ontario to Pembroke Ontario on Tuesday June 22, 1999. It will likely go through North Bay in the evening stopping for a crew change only. The return trip will be going through North Bay likely during the evening on June 28, 1999. CP runthrough power shall be utilized.

Who would have expected this? The Grand Canyon Railway at Williams Arizona has purchased former VIA FPA4 6776 and B-unit 6860 from the Portola Railroad Museum, which brings the total to five "A" units and two "B" units. The additional power is primarily for a second train the Grand Canyon plans to operate in the spring of the year 2000. The GCR now owns FPA4's #6762, 6768, 6773, 6776 & 6793 and FPB4's 6860 & 6871.

I normally don't look at photographic websites however F. David Shaw, a Canadian collector of railroad negatives, slides and memorabilia now has his own website. Knowning Dave for an number of years I have come to realize his technique and grasp of the subject is superb. The website address is www.railwaymemories.net

MOTIVE POWER

Canadian National

Canadian National SD75 5785 was released from Alstom May 14, SD75 5786 delivered May 19. Retired April 9, SD40 5066; May 18 SW1200RS 1343.

Off lease: SD40 5218 was returned mid May from New Brunswick East Coast leaving them with only GP9u's 4137 and 4142 on lease; Ottawa Central returned leased CN GP9u's 4036 and 4107, May 25 and now has no leased power.

Forty 40 retired SD40's now in Alstom, Montreal for the BNSF rebuild program are as follows: 5003, 5004, 5007, 5008, 5012, 5016, 5019, 5022, 5024, 5027, 5031, 5032, 5036, 5041, 5044, 5052, 5053, 5054, 5055, 5056, 5058, 5061, 5063, 5066, 5069, 5075, 5105, 5121, 5132, 5141, 5161, 5162, 5165, 5213, 5227, 5235, 5239, 5915, 5918, 5926. Of note, 5061 was one of two Dash-2 prototypes many years ago. The other one was 5013. The 5058 was a B-unit for the past few years. The last three are GTW units.

Presently there are 41 SD40's left on CN's roster. Fifteen are assigned to Vancouver BC for transfer service, in sets of three. The balance are assigned to Symington for maintenance and roam the system: 5000, 5001, 5013, 5015, 5020, 5023, 5025, 5028, 5030, 5035, 5038, 5048, 5049, 5051, 5055, 5060, 5068, 5072, 5074, 5078, 5081, 5083, 5096, 5101, 5109, 5116, 5129, 5139, 5154, 5201, 5210, 5215, 5217, 5218, 5222, 5223, 5228, 5229, 5230, 5232, 5233.

CANADIAN PACIFIC

The following locomotives were being prepared during May 1999 for sale to UniCapital; the locomotives are apparently going to the Livingston Rebuild Centre: SD40-2s 5422, 5427, 5429, 5430 ( leased from GATX in 1991, purchased in March 1994), SD40-2s 5622, 5628, 5632 (all built in 1972), and SOO 787(built 1975). In addition is understood the Dakota Minnesota & Eastern has purchased CPR SD40s 5501, 5513, 5517, 5520, 5537, 5545, 5549, 5554, 5557, 5561, 5562, 5563 all built 1966-1967. In May 1999 CPR posted on their website the following locomotives as being for sale: SOO GP9 410: CP F7Bs 1018, 1019; CP SD40-2s CP 5855, 5838; D&H formerly CP SW8 6702.

At Thief River Falls Minnesota on May 9, 1999 the following locomotives were observed in various states: Adjacent to the mainline (to the east, from north to south) were SD40s: SOO 753, CP 6403, CP 6400, SOO 747, SOO 756, CP 6408, CP 6406, CP 752, CP 741, CP 6410, CP 751, CP 6405, CP 6407, and SOO 781; stub track, grain elevator lead (north to south) were: SOO slug 2118, SD40s SOO 744, CP 740, SOO 748, CP 6409, SOO 750, SOO 6401, SOO 739, CP 749; roundhouse lead(s): HLCX 6211 (ex-DM&E, alone), DMVW 6327 (with trucks back on now), 4652 (ex-Guilford, B&M with numbers 506 and 301 clearly visible on cab side, covered with black paint). No "CP" or other reporting marks visible, numbers only. Between roundhouse and turntable, SOO SW1200 328 was parked. Adjacent to the roundhouse, CP 4607 and CP 4617. The 4617 still had its entire long hood sitting on the ground nearby, with no visible mechanical components missing. Behind the roundhouse were SOO 738 and 745. Stored. At one of the grain elevators was switcher ILSX 900. Yard power consisted of CP 4437 and SOO 4446. Also near the yard office, SOO 4410, SOO 2026. At Glenwood, Minnesota on May 9, 1999 stored west of the station from east to west SD40-2s CP 760, CP 776, CP 785, CP 783, CP 780. At Glencoe, Minnesota May 9, 1999 at the Green Giant plant on the west end of town (from east to west): GP15Cs SOO 4106, SOO 4103, SOO, 4104, SOO 4105, SOO 4101, GP30C SOO 4300, SOO 4301.

SHORTLINES

CANX SW1200RS's 1349, 1361, 1360 were leaving Montreal May 14, 1999 enroute to Pioneer Chlor Alkali, Henderson, Nevada; Canac has sold M420W 3501 to the St. Lawrence & Atlantic Quebec; CFMG/NBEC 6908, 6909, 6910 all released from Alstom April 28.

New Ontario Northland SD75s are on the erecting floor at Alstom. It is expected these locomotives will be delivered starting the first full week of June 1999 in the latest paint scheme number 2100-2105. It is expected by the third week of June all locomotives will be on ONR property.

Thank you to the following for the July 1999 Canada Calling: Rainer Auer, Kevin Burkholder, Gerry Burridge, Bruce Chapman, Mike Del Vecchio, Tim Green, Roman Hawryluk, Joseph F. Kazmar, Randy Kotuby, Jim Sandilands, CPRSOO/CNET SIG mailing lists, Canada Newswire and others.

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