Canadian Railroads > After CM&Q, would CP go for the NBSR and EMRY also?

With the acquisition of the CM&Q, what is the possibility that CP will eventually make an offer to the Irving Group for purchase of the New Brunswick Southern and Eastern Maine Railways to complete their ownership of the line all of the way to Saint John?  Does CP have first right of refusal regarding any possible sale of the line?       

CP may have already made an offer, but there are several reasons why Irving would say (or perhaps has already said) "NO".

CP is probably only interested in the old CP main line, from Brownville Jct. through to Saint John.  The former BAR is just a branchline with a bunch of "small" local industries, the kind of thing big Class 1s could care less about.

However for JD Irving (the owner of NB Southern, EMR, etc.) their present network is a critical part of their pulp and paper manufacturing process in Saint John.  It's a virtual conveyor belt from St. Leonard, across the river from Van Buren, ME, through Ashland where there is another lumber mill, and on to Saint John where the woodchips are consumed by the pulp mill at the reversing falls.  Irving doesn't want that conveyor belt disrupted by anybody else whose priority may not be making paper.  Irving spent a considerable amount of money to construct a bypass from the old BAR Millinocket Sub to their own ex-CP main line just east of Brownville Jct. so that their trains would not have to travel through Brownville Jct.  At the time, Brownville Jct. yard was controlled by MM&A, and that dysfunctional operation would frequently leave the yard plugged with no way for the Maine Northern trains to get through.

On my last visit up there, a year ago, we heard a southbound train between Ft. Kent and Millinocket with power problems.  This train consisted of woodchips and cars from CN for CMQ (to be delivered to Brownville Jct.).  The instructions from the Train Master that night were to, "leave the CN and CMQ cars and take the chips."  If somebody else was running the show, I think it might have gone the other way around, and Irving doesn't want to take that chance.  They have a real stake in the business (unlike Fortress), so hanging onto it makes sense.

Another factor is that, unlike MM&A and Iron Road before them, Irving has deep pockets, and if the business case can be made, they're not afraid to spend money.  It's a privately owned company, so unlike CP, they don't have to answer to shareholders and PSR gurus.  It sounds like they have some "new" power on lease to handle the extra tonnage, and rumours are going around that the number of trains between Saint John and Brownville Jct. should double in the next month.

Just my two cents.  Worth what you paid for it!  :-)

GTD

 

Northern Wrote:
-------------------------------------------------------
> With the acquisition of the CM&Q, what is the
> possibility that CP will eventually make an offer
> to the Irving Group for purchase of the New
> Brunswick Southern and Eastern Maine Railways to
> complete their ownership of the line all of the
> way to Saint John?  Does CP have first right of
> refusal regarding any possible sale of the line?
>  

Irving has long followed the practice set by J.D. Irving, the company founder .... you buy land (and companies) you do not sell them.
That simple philosophy has worked for them for many years.

    

Will MacKenzie
Dundas, ON

cn6218 Wrote:
-------------------------------------------------------
> However for JD Irving (the owner of NB Southern,
> EMR, etc.) their present network is a critical
> part of their pulp and paper manufacturing process
> in Saint John.  It's a virtual conveyor belt from
> St. Leonard, across the river from Van Buren, ME,
> through Ashland where there is another lumber
> mill, and on to Saint John where the woodchips are
> consumed by the pulp mill at the reversing
> falls.  Irving doesn't want that conveyor belt
> disrupted by anybody else whose priority may not
> be making paper.  

How come CN doesn't just haul the chips to St. John themselves? Why surrender them at St. Leonard?

TIA,

Rob L.

Thats a good question about the chips.  CN handles the lumber that comes out of the mill, but an MNR crew goes across the river, gets a track warrant to use the CN main line, and then goes into the mill to pick up the chips.  CN never touches them.  Perhaps there is some old agreement from BAR days that allows them to do this.

GTD