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CEO of VIA Rail Yves Desjardins-Siciliano is photographed at Union Station in Toronto, Ontario, Tuesday, December 9, 2014. Desjardins-Siciliano pitched the rail service’s $3-billion proposal for a dedicated track project to a group of private investors.Kevin Van Paassen/The Globe and Mail

The head of Via Rail Canada Inc. brought his pitch for private investment to Toronto on Thursday, promoting a chance to reshape the money-losing passenger-train service.

Yves Desjardins-Siciliano told a room full of bankers, pension-fund managers and developers the $3-billion proposal to buy and build dedicated passenger train tracks in the busy Toronto-Ottawa-Montreal corridor could bring double-digit returns to a consortium of investors in the Crown corporation.

"We are striving to make Via Rail more relevant to Canadians … while not over overburdening Canada's taxpayers," Mr. Desjardins-Siciliano said. "A corollary to that may be a way for the private sector to put its shoulder to the wheel."

Most of Via Rail's trains travel on rails owned by freight carrier Canadian National Railway Co., leading to congestion and delays that drive away customers. Mr. Desjardins-Siciliano said passenger trains that travel at 110 miles an hour are incompatible with much slower cargo trains. He pointed to Via Rail's on-time performance of 63 per cent in the first quarter, compared with 71 per cent a year earlier. In the first three months of 2015, Via Rail's operating loss was $86-million.

Dedicated tracks and more frequent service in the key Toronto-Ottawa-Montreal corridor would help the company boost ridership and revenues while capitalizing on a demographic shift that is fostering an interest in train travel, he said. Younger people care little about car ownership, one-quarter of Canada's population will be more than 65 years of age by 2040 and many immigrants come from countries where trains are dominant modes of travel, he said.

Via service falls under three categories: long-distance travel and tourism in Western and Eastern Canada, mandatory service in rural and remote areas, and intercity travel in the busy and densely populated Windsor-Quebec corridor, which carries the vast majority of Via Rail's 3.8 million passengers at a government subsidy of $48 a person. Via is considering offering investors a stake in the busiest part of the latter section, Toronto-Montreal-Ottawa, and predicts ridership could increase by 3.5 times with dedicated tracks and better service. Currently, 87 per cent of trips between Toronto and Montreal are by car, a number that has risen from 33 per cent in 1990, as Via service has deteriorated.

Mark Romoff, chief executive officer of the Canadian Council for Public-Private Partnerships, said there is a lot of interest in Canada and overseas in a possible partnership with Via.

A spokesman for CN said there are inevitably "trade-offs" when freight and passengers operate on the same tracks, but noted traffic on the Windsor-Quebec corridor moves well. "CN requires all of its rail network in the Quebec City-Windsor corridor and none of it is for sale. Moreover, VIA Rail has not requested the purchase of any portion of CN's track in the corridor," Mark Hallman said.

Mr. Desjardins-Siciliano said a high-speed rail project is not under consideration, referring to Via Rail's proposal as "high-frequency."

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 23/02/24 4:27pm EST.

SymbolName% changeLast
CNI-N
Canadian National Railway
+0.14%131.61
CNR-T
Canadian National Railway Co.
+0.27%177.69

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