I will admit I’m a bit surprised that CN is actually agreeable on this sale, but we have to assume that they know far more than we do about their economics and future business projections. They are going in with their eyes open and their shareholders’ interests in mind.
Quite likely that the line has impending capital needs which they will gladly let ML pick up. Sure, ML could pay CN to make the improvements, but that accounting is murky and the pace of the work is hard to enforce - look at how long the West Harbour connection took. Better for mL to have clearer line of sight snd direct control of the work, for ML it’s a core activity where for CN it’s an annoying distraction.
And, when you look at how all the yard and industrial trackage has been pulled up especially at Merritton and Niagara Falls - the future business will mostly be through traffic, for which rerouting to Sarnia may be quite viable. For that matter, they may be happy to let the business go if it is not bringing them a favourable return - the downside of the privately owned railway model is that there is no duty to serve, and our railways regularly turn away willing customers if the return isn’t there. I wonder how much revenue CN gets to haul cars from Fort Erie to Hamilton - NS and CSX may get the long haul.
To be less wordy - if CN is ok with it, who are we observers to argue. A model of publicly run passenger rail owning its own tracks is far more favourable than a tenant relationship.
- Paul