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Firefighters apply water to railway cars a day after a Montreal, Maine and Atlanic train derailed, causing explosions of railway cars carrying crude oil in Lac-Mégantic, Que., on July 7, 2013. (Paul Chiasson/The Canadian Press)
Firefighters apply water to railway cars a day after a Montreal, Maine and Atlanic train derailed, causing explosions of railway cars carrying crude oil in Lac-Mégantic, Que., on July 7, 2013. (Paul Chiasson/The Canadian Press)

Crude oil transport revitalized rail company at centre of disaster Add to ...

Until the horror in Lac-Mégantic, the Montreal, Maine and Atlantic Railway had been regarded as a turnaround story, finding success by catering to the growing demand for shipping crude oil by rail.

The company began operation in January, 2003, as a unit of Chicago-based Rail World Inc. Its chairman, Edward Burkhardt, specializes in revitalizing railways around the world that serve key geographic and market niches.

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Mr. Burkhardt had success in the 1980s, invigorating Wisconsin Central, which is now part of Canadian National Railway Co.

He also acquired and ran for four years a handful of U.K. freight lines, which British Rail privatized in the mid 1990s, according to reports and Rail World’s website. He did not return requests for comment Sunday.

Mr. Burkhardt has also sat on the board of directors for railways in New Zealand, Australia and Poland.

To form MMA, Mr. Burkhardt acquired regional lines owned by bankrupt Iron Road Railways and joined them together into a network that could take crude and other commodities from major railways and deliver them to connecting junctions in Maine and New Brunwick. Its primary line links Montreal and Bangor and runs through Lac-Mégantic.

In a 2007 issue of the railroading magazine Trains, Mr. Burkhardt noted that the bankruptcy of MMA’s previous parent had wounded morale in the company. “The work force was disillusioned and bitter,” Mr. Burkhardt said in 2007. “It’s taken a while to turn them around, but it’s starting now.”

The company suffered during the 2008 recession and was hurt by slumping demand for shipping forestry products. Conditions were bad enough that the railway was forced to divest stretches of its network.

In 2010, it sold nearly 375 kilometres of underused track in Northern Maine to the state government. MMA was in the process of abandoning that line prior to the sale, which would have cut rail service to that portion of the state, according to a press release at the time from the governor’s office.

However, the company has benefited from energy producers’ recent and growing appetite for shipping crude oil by rail. Until this weekend, MMA was on an upswing.

Crude by rail “is increasing revenue after a long period of near revenue starvation,” the railway’s chief executive Robert Grindrod told the Bangor Daily News last summer.

The growth in crude shipments, however, had prompted concern among authorities in Maine, according to reports.

The railway, headquartered in Hermon, Me., near the city of Bangor, is seen as a critical conduit for crude coming from the Bakken region in the west and the oil sands in the north to Irving Oil’s refinery in Saint John, N.B.

The company’s 73-car train, which derailed and exploded in the centre of Lac-Mégantic early Saturday, was destined for Brownville Junction in central Maine.

MMA’s vice-president, Joe McGonigle, citing security and business confidentiality reasons, wouldn’t specify Sunday which companies the crude was being shipped for.

Follow on Twitter: @Guy_Dixon

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