Lacking rail link, Churchill expects to receive ice road by Christmas

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Churchill has been without a land link since spring flooding led to the closing of the railway, but an ice road to the remote Manitoba town on the shore of Hudson Bay is expected to be completed by Christmas.

The new road over frozen muskeg, waterways and rock covers about 60 kilometres of the 280-km stretch, said Mark Kohaykewych, owner of Polar Industries Ltd., which has built ice roads all over Canada's north.

"Things are freezing quickly up there. We're having ideal conditions – minimal snow and cold temperatures," he said by phone.

Churchill's 900 residents have had to rely on planes and boats for supplies since the Hudson Bay Railway sustained washouts in May and closed. The federal government sued the railway's owner this week for failing to repair and operate the line, in violation of a 2008 agreement. Ottawa is seeking about $20-million it says it contributed to the railway's upkeep.

Omnitrax Inc. has refused to repair the damaged rail line, which runs over unstable tundra and terrain ill-suited to heavy trains. OmniTrax, owner of several small railways, says repairs will cost at least $43-million, and it is focused on selling the port and rail line.

The company has threatened Ottawa with a complaint under the North American free-trade agreement. The company said its 1997 purchase of the Port of Churchill and the railway were rendered not viable by the government's dismantling of the Canadian Wheat Board, the HBR's main shipper.

Once the ice road to Churchill is complete, large snow-tracked vehicles will haul trains of one to four sleighs carrying a total of 15,000 to 20,000 pounds of goods, Mr. Kohaykewych said.

A crew of about 20 men and 15 pieces of heavy machinery are working north of Gillam, Man., packing down the route and flooding creeks and rivers where the ice is too thin. The company based near Winnipeg is partnering with contractors that work in the region and has applied for government funding to cover the costs of the $3-million project.

"It's definitely one of the most challenging and most remote projects we have ever done. We're making history here – making a path to a place that's never been accessed by road," he said. "It goes from one extreme to the other. We start off in the rocky Canadian Shield and then we cross into muskeg and the last half of it is going into tundra."

Crews are staying in a mobile camp or in nearby trappers' cabins owned by Fox Lake First Nations, a partner in the project.

Meanwhile, Ottawa said late on Thursday that Toronto-based Fairfax Financial Holdings Inc. has expressed an interest in buying the railway, port and other assets in partnership with two previously named parties, Missinippi Rail and One North. The government said its chief negotiator is working exclusively with the Fairfax-led group.

"The Churchill rail corridor and the Port of Churchill are important pieces of infrastructure for northern communities and to the economy of Canada," said Paul Rivett, president of Fairfax, in a statement. "Partnering with First Nations and communities is the right model for this investment."

Fairfax has a large stake in Regina-based grain processor and exporter AGT Food and Ingredients Inc., raising the possibility Churchill could resume its grain-terminal operations under new owners. Churchill is a deep-water port with shorter transit times to Europe. However, its short shipping season reduces its commercial viability.

"We have deep experience in infrastructure projects and have the necessary operational expertise to run short-line railways in partnership with our investee company AGT Foods. The key is that the plan has to be viable and profitable in the long term as a business," Mr. Rivett said.

OmniTrax said on Friday that it has not been contacted by Fairfax about a sale. "That said, we continue to welcome a sale that would provide fair value for the assets and a solution for the people of Churchill," the company said in an e-mail.