State making preparations should Montreal, Maine and Atlantic Railway fold

A firefighter and an emergency crew work on the site of the train wreck in Lac-Megantic, Quebec, July 16, 2013.
REUTERS
A firefighter and an emergency crew work on the site of the train wreck in Lac-Megantic, Quebec, July 16, 2013.
By Nick Sambides Jr., BDN Staff
Posted July 30, 2013, at 7:27 p.m.

AUGUSTA, Maine — State officials are talking to four Maine rail haulers about running Montreal, Maine and Atlantic Railway operations should the company seek bankruptcy protection in response to its runaway train destroying the center of a Quebec town earlier this month.

The idea is to protect Maine businesses that use MMA as an artery for supplies and products, Nate Moulton, director of the state’s industrial rail access program for the Maine Department of Transportation, said Tuesday.

“What we are not doing is predicting the future,” Transportation Department spokesman Ted Talbot said Tuesday.

“We would be remiss if we did not have a contingency plan ready to go,” Talbot added. “We want to ensure that they [Maine businesses] have viable options to move product should MMA suddenly shut down.”

The rail hauler laid off at least five more Canadian workers on Tuesday in addition to 60 Americans and 19 Canadians let go July 18 after some of the runaway train’s tankers exploded in Lac-Megantic, killing an estimated 47 people, on July 6.

The tracks through the lakeside town remained closed Tuesday as Canadian officials continue to investigate and clean up the disaster site. U.S. officials are reviewing safety records and track conditions in response to the disaster.

The provincial government of Quebec signed a legal order on Monday obliging the freight hauler and World Fuel Services, whose subsidiary sold the light crude oil carried by the train’s tanker cars, to pay cleanup costs.

Crews are working to clean up an estimated 1.5 million gallons of oil from the nearby lake, river and ground.

Lac-Megantic Mayor Colette Roy-Laroche complained on Tuesday that MMA had not paid cleanup crews. She said the town has paid about $7.57 million for the work and that its notice to MMA was the second reminder that the town needs to be reimbursed.

World Fuel Services said it was surprised by the government action as it was the first time the government had said the company bore any responsibility. MMA has yet to comment on Roy-Laroche’s charges.

Montreal, Maine and Atlantic Railway is headquartered in Hermon and has about 200 customers in Canada, Maine and Vermont. The Lac-Megantic line is its primary route, company president Robert Grindrod has said.

The company has kept some of its trains moving and worked with other rail shippers to keep its customers’ needs met, Grindrod said. Ed Burkhardt, president of MMA’s parent company, said Monday that bankruptcy was among the possibilities the company was studying.

The state has five freight haulers: Eastern Maine Railway-Northern Maine Railway; Maine Eastern Railroad; Montreal, Maine and Atlantic Railway; Pan Am Railways; and St. Lawrence and Atlantic Railroad.

State rail shippers have called transportation officials with questions about what would happen if MMA folded or sought protection. Under a railway bankruptcy proceeding, the federal government’s Surface Transportation Board would appoint a trustee to operate the railway, Moulton said.

The board would seek to create as little disruption in rail service as possible and probably would be open to state advice. Transportation officials have had some experience dealing with railroad bankruptcies and railroad company abandonment of tracks, which are very similar circumstances in that government officials seek uninterrupted services to businesses, Talbot said.

“We are not doing this from scratch,” Talbot said.

Reuters contributed to this report.

http://bangordailynews.com/2013/07/30/news/state/state-making-preparations-should-montreal-maine-and-atlantic-railway-fold/ printed on July 10, 2014