CBNS: Revised Agreement With Province Better For All

G&W and NS Province Agree to Lower Monthly Costs to Keep Out-of-Service Sydney Rail Line in Shape to Serve Potential Terminal.

14 May, Sydney NS — The Nova Scotia Provincial Government and the Cape Breton & Central Nova Scotia Railway (G&W) have reached an updated agreement to preserve and maintain the out-of-service Sydney subdivision rail line between St. Peter’s Junction and Sydney NS.

The government says the company will not apply to abandon a portion of the rail line, and the province will reimburse valid expenses up to $30,000 a month to maintain the line for future service. In 2015, G&W discontinued running trains from Port Hawkesbury to Sydney in 2015 due to diminished railcar traffic.

Better deal

In previous agreements, the province had been spending up to $60,000 a month to keep the line open, while developers pursue a container terminal project for Sydney harbour. Proponents say a working rail line is critical for that kind of port development.

Earlier this year, Nova Scotia Business Minister Geoff MacLellan said he would need to see strong progress toward a viable port project before continuing the subsidy, which expires annually on 31.March.

“For us, part of it was just the stability, the certainty in knowing what the financial outlay looked like on a month-over-month basis, and of course on the annual basis, as well,” MacLellan said.

The former agreements required CBNS to submit invoices for the costs incurred to maintain the line in case sufficient rail traffic ever returns. The maintenance requirements are the same under the new agreement, but there is less administrative burden because receipts are not required, MacLellan said.

Container terminal still viable?

Sydney Harbor Investment Partners (SHIP) has an exclusive deal with Cape Breton Regional Municipality to develop a container terminal in Sydney harbor. MacLellan said SHIP has lined up a significant amount of funding, indicating that international financiers support the project. “I believe there’s life in this project,” MacLellan said.

MacLellan said the new subsidy agreement was worked out before the COVID-19 pandemic, but he would not have struck a different deal if he was negotiating now. “What the long-term impact is going to be from COVID with respect to something like the global shipping sector … there’s really no way to determine that,” he said.