Owner of MMA railway says ‘Maine is not a growth state’

Posted Aug. 09, 2013, at 2:04 p.m.
Last modified Aug. 10, 2013, at 9:14 a.m.

Despite being recently bailed out by Maine taxpayers, the railroad owner whose runaway train devastated a Canadian town last month said Friday that his business needs one-man crews to remain solvent because businesses along the tracks cannot afford more manpower.

“All of it is too far [apart geographically] and the industries are too weak,” Rail World Inc. President Ed Burkhardt said Friday.

The owner of the railway, whose runaway train was hauling crude oil and killed 47 people when it derailed in Quebec last month, then criticized the state’s business climate.

“Maine is not a growth state or a business-friendly state so it is very difficult to run a railway there [without one-man crews],” Burkhardt said.

Maine Department of Transportation Commissioner David Bernhardt disagreed with Burkhardt in a statement released late Friday afternoon.

“Safety within the rail industry is an individual operator’s responsibility. The people of Maine or current economic conditions are not to blame for this [Lac-Megantic] tragedy,” Bernhardt said.

“The rail industry plays a significant part in Maine’s economy. As the Maine DOT continues to work with our Canadian counterparts in ensuring there is minimal disruption to businesses, we are extremely optimistic about the future of rail in Maine,” Bernhardt added. “We believe profits will increase, jobs will be created and the people of Maine will benefit greatly by the continued growth of products moving by rail in this state.”

Burkhardt was defending Montreal, Maine and Atlantic Railway’s safety record with one-man crews against Bernhardt’s statement Thursday that the next carrier to operate MMA’s rail lines in Maine, Vermont and Canada might hire more workers to staff trains with two-man crews.

MMA, Bernhardt has said, is the only rail company in Maine that employs one-man crews using remote-control devices. The other rail operators, Bernhardt said, also have good safety records. Bernhardt did not indicate whether he believed that a second rail worker on the Lac-Megantic train would have prevented the disaster.

Burkhardt echoed Gov. Paul LePage in decrying Maine’s business climate, saying that he doubted another rail company could function in MMA territory without one-man crews.

MMA introduced the one-man crews at about the same time the railroad said it would abandon more than 200 miles of tracks in northern Maine because running it was not profitable. Voters in 2010 approved having the state borrow $7 million to help the state purchase the tracks.

State lawmakers also allocated $7 million from the state’s reserves to the purchase, with $3 million pledged by shippers using the line. Eastern Maine Railway, a subsidiary of New Brunswick-based J.D. Irving, Ltd., now operates the tracks.

MMA got $20.1 million from the sale. The funding came from a $47.8 million bond package approved on the June ballot that year.

On Friday, Burkhardt said the one-man train issue was irrelevant to the Lac-Megantic tragedy. One-man trains are common in several other countries whose railway operators cannot believe that U.S. rail operators pay second crew members to “sit around doing nothing,” Burkhardt said.

Burkhardt has said that the engineer might not have set enough brakes to keep it stationary before leaving the train. A fire was discovered aboard the engine that powered the airbrake system, requiring firefighters from a nearby town to douse the flames. It is unclear who turned off the engine, cutting power to the airbrakes, but the train accident occurred about an hour after firefighters left.

U.S. Reps. Mike Michaud and Chellie Pingree recently introduced legislation that would ban one-man trains from carrying hazardous materials in the U.S., an effort Michaud called common sense.

The accident forced MMA to lay off about 85 people, spurred investigations and safety reviews and forced MMA and its Canadian arm to file for bankruptcy on both sides of the border.

Canadian authorities continue to investigate the cause of the accident.

Burkhardt said he suspects that the trustee the bankruptcy court will appoint to run the company as the case continues will find — as MMA’s leaders did — that one-man crews are critical to the company’s solvency.

MMA, he said, “would have been long gone” without one-man crews. The company has also opted to stop shipping oil, which was a key element to its recent economic rebound.

Burkhardt joins Forbes Magazine which named Maine the worst state for business for the third year in a row in December 2012. The annual ranking put Utah at the top.

Burkhardt’s candor and visit to Lac-Megantic several days after the accident, which town residents regarded as tardy, were among the reasons several publications dubbed him the most hated man in Canada.

On Friday, Burkhardt expressed concern that businesses along his company’s rail line, including some large businesses in Lac-Megantic, were being effectively strangled by Canadian authorities’ keeping the line closed. The closure forces the businesses to transship goods and pay much higher rates than they would if the line were reopened.

Environmental cleanup continues, but the line, he said, has been cleared of debris and rail workers can have it operational within a few days, Burkhardt said.

“The industry there desperately needs rail service, but [some Canadian leaders] never want to see a train run through this community again,” Burkhardt said. “I thoroughly understand the concerns the people in Lac-Megantic have. They suffered the worst possible tragedy and you don’t suddenly start running trains through there again.”

The court-appointed trustee, who will be charged with running the railroad to preserve businesses that use it, will also need to keep the company solvent. The trustee might find that charge difficult to fulfill without significantly cutting back on the number of trains run or significantly increasing railway customers’ costs, Burkhardt said.

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