[LabComm] CN Railcar Shortages Threaten Regional Economic Stability -- James

[BC NDP NEWSWIRE]

CN Railcar Shortages Threaten Regional Economic Stability -- James

NDP Leader Asks Auditor General To Assess Impact on Local Business and Communities

Vancouver -- In the wake of reports of shipping delays and rail car shortages along the former BC Rail line, BC's independent Auditor General needs to assess the impact of CN's poor performance since purchasing BC Rail from the Gordon Campbell Liberal government, NDP Leader Carole James said today. 

"Concerns coming from shippers and mills along the rail line demonstrate a clear need for the Auditor General to determine why such problems are occurring," said James. "All Northern and Interior residents hear from the Liberal government is spin; they deserve to know what's really going on along the former BC Rail line."

According to a Canfor Daily Newsletter, released on March 23, 2005, warehouse pulp inventory "has reached a critical level" due to a lack of railcars available for transferring goods to market. 

As a result of the backlog, warehouses are forced to erect temporary shelters for goods, and businesses are incurring financial penalties for late delivery. An increased use of trucks, as an alternative to transport goods, is having an economic impact on the bottom line of local businesses as truck shortages also loom on the horizon.

"The failure to get products to market in a timely fashion is limiting the ability for industries to prosper, and threatens economic stability and job security for the region," said James 

The government's briefing on the sale of BC Rail in November 2004 claimed that reduced rates and faster shipping times were to be among the benefits of the sale. 

"These benefits are not being realised by the mills dependent on the rail line," said James. "CN's failure to deliver on the government's public commitment is having a significant and negative impact on regional industry."

James said that given the political sensitivity surrounding this issue, and the partisan interests of all participants as the provincial election nears, it is appropriate for the Auditor General to investigate why these delays are happening, if they constitute a breach of commitment, and what remedies exist to assist businesses negatively impacted thus far.

"It is my sincere hope that the Auditor General will agree to review and assess the impact of the current situation for the benefit of regional industries, local communities and the public trust."

-30-

---------------------------

Wayne Strelioff
Office of the Auditor General of British Columbia
8 Bastion Square
Victoria, BC
V8V 1X4

SENT BY FAX TO:250.387.1230

March 30, 2005

Dear Sir,

A number of concerns have recently been brought to my attention with regard to service levels provided by CN since the sale of BC Rail.

It has become apparent that delays in shipping times and railcar shortages are posing a threat to northern industry. These concerns coming from shippers and mills along the rail line must be addressed, and demonstrate a clear need for your office to determine why such problems are occurring.

According to a Canfor Daily Newsletter, warehouse pulp inventory "has reached a critical level" due to a lack of railcars available for transferring goods to market. This concern is coming from a number of mills, and as a result some operations have had to erect temporary facilities to store finished pulp inventory that, due to railcar shortages, is unable to be shipped.

According to the government's briefing that outlined details of the sale of BC Rail to CN in November 2004, reduced rates and faster shipping times were to be some of the benefits of the sale. These benefits are not being realised by the mills dependent on the rail line. 

CN's failure to deliver on the government's public commitment is having a significant and negative impact on regional industry.

I am aware that CN has officially stated that poor weather is to blame for the shipping backlog and railcar shortages. However, managing northern BC winters should come as no surprise to CN, nor do weather conditions answer for the lack of railcars operating on the line. In fact, BC Rail faced such weather conditions and never had such shortages occur.

I also have broader concerns that CN's railcar shortage is North America-wide, and will only worsen as export traffic increases to meet the growing needs of the American market. For example, backlog at the Port of Vancouver will potentially be the next point of concern in the shipping line -- a reality that would further impact the region's ability to be competitive and efficient.

With shipping backlogs, I can only assume that mills are incurring financial penalties based on late delivery and may even be facing a loss of valuable customers due to an inability to meet delivery targets.

It is my further understanding that mills are now relying more heavily on trucks for shipping in an effort to meet delivery deadlines. Such trucks are already at a premium and as a result, a truck shortage is already on the horizon.

The failure to get products to market in a timely fashion is limiting the ability for the pulp industry to prosper, and threatens economic stability and job security for the region. 

I am sure you would agree that all of the above are undesirable and hold potentially devastating outcomes for our province.

Given the political sensitivity surrounding this issue, and the partisan interests of all the participants as we enter the election period, it is appropriate for the Auditor General to investigate why these delays are happening, if they constitute a breach of commitment, and what remedies exist to assist businesses negatively impacted thus far.

There are a number of outstanding questions with regard to the sale of BC Rail. These questions have been asked often, but without an independent assessment of the impact of the sale they have not, and will not, be answered. 

What I have raised today only adds to those mounting unanswered questions. It is now time for answers.

It is my sincere hope that your office will agree to review and assess the impact of the current situation for the benefit of regional industries, communities and the public trust.

Sincerely,

Carole James
Leader, BC News Democrats 

cc. Gordon Campbell, Premier

To unsubscribe or change your settings go to: http://www.e-2ve6y.signup2.bc.ndp.ca/
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://bcfed.net/pipermail/labcomm/attachments/20050330/0fb7a466/attachment.html>