Firm that bought railway involved in Lac-Megantic disaster wins approval to operate in Canada

Posted June 25, 2014, at 2:17 p.m.

PORTLAND, Maine — Canadian regulators have granted the Central Maine and Quebec Railway approval to start running its trains on track formerly owned by the Montreal, Maine and Atlantic Railway, which operated an oil-carrying train that crashed in July 2013, killing 47 people in a small Quebec town.

The Canadian Transportation Agency on Tuesday determined the new railroad operator proved that it has adequate liability insurance to qualify for a certificate of fitness from the agency.

That approval will allow the railroad to restart operations in Canada. In May, it restarted the U.S. operations of the former Montreal, Maine and Atlantic Railway, which filed for bankruptcy protection after the July 2013 disaster in Lac-Megantic, Quebec.

The new railroad operator is owned by Fortress Investment Group, which acquired the railroad in a bankruptcy sale approved in the United States in January through its subsidiary Railroad Acquisition Holdings. The $15.85 million sale of U.S. assets closed in May and is set to close in at most five days from the regulatory approval issued Tuesday, according to bankruptcy filings.

John Giles, who was not immediately available for comment Wednesday, said in May that the company’s first priority would be investing $10 million in improvements on portions of track for which federal regulators require repairs before it can run its trains at full speed.

Giles told the Canadian Broadcasting Corp. in May that he has promised Lac-Megantic leaders that the company would not transport crude oil through the town until track improvements were made. He said he hopes the railroad will be able to compete for crude oil business by January 2016.

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