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Columbia Journal logoVolume Nine, Number Two    April 2004    www.columbiajournal.ca

    BC Rail Sale Sidetracked

    Jim Lipkovits and Marco Procaccini

    The BC Liberal government’s move to sell BC Rail, already marred in scandal, has taken another hit as newly leaked documents showing a secret deal to sell railroad lands to the Canadian National Railway for just one dollar have come to light.

    BC Rail Sale SidetrackedIn addition, the documents, obtained by the NDP opposition, say the government is planning to do this under a one thousand year lease agreement with the company.

    "The scheme to sell BC Rail was already under a considerable cloud of suspicion due to the police investigation of key BC Liberal officials and allegations by rival bidders of leaks of confidential information," said BC NDP leader Carole James, adding that the privatization deal should be halted because of the scandals. ”In addition, the leaked sections of the agreement allow -- after just five years -- for the sale of public land under rail lines to CN for one dollar. These lands include very valuable waterfront properties between North Vancouver and Squamish.”

    The Liberals had repeatedly promised during the 2001 provincial election campaign that they would not sell off BC Rail if they formed the next government. Shortly after they were elected, they began the process to do just that.

    Since the release of these documents, critics are now challenging the government’s claim that it will make about $1 billion from the sale of the highly profitable railway, since the huge land give-away and other taxpayer funded bonuses for CN are now estimated to cost around $1.2 billion.

    The documents are also adding more fuel to the accusations influence peddling by the government and collusion with CN. Influence peddling is one of the suspicions of police investigators who raided the legislature last December. Several other rail firms that had bid on the sale are also alleging it.

    Freelance journalist and political commentator Bill Tieleman revealed in the Georgia Straight that three other bidders, Canadian Pacific Railway; OmniTRAX, in partnership with Burlington Northern Santa Fe Railway, and RailAmerica had complained that the bidding process was stilted toward CN.

    “Several media reports said the government was determined to award the deal to CN. CN has donated about $150,000 to the B.C. Liberals since 1994,” Tieleman wrote. “CP wrote in a bitter private letter, dated November 21, 2003, and copied to the premier's office, that the government's handling of the BC Rail deal was ‘extremely prejudiced,’ that CN had been provided ‘enhanced access to shippers,’ and that CP was formally withdrawing from the bidding.”

    James’ call to stop the sale has been echoed by a growing coalition of municipal councils, labour, small business and residents’ organizations, both along BC Rail routes and across the province.

    The group recently sent a letter to Liberal Premier Gordon Campbell demanding the sale be stopped.

    “A broken promise and a criminal investigation betray the trust of the people of British Columbia,” the letter said. “The only responsible decision you and your government can make is to suspend the sale of BC Rail until matters related to the raid on the legislature have been fully investigated by the police.”

    The letter was signed by Fort St. James Mayor Jim Togyi, Quesnel Mayor Nate Bello, and North Vancouver City Mayor Barbara Sharp and by nine Councilors from Williams Lake, Prince George, Squamish and North Vancouver City, and six large business enterprises in the region, along with representatives from railway unions.

    The coalition is also calling on the federal Competition Bureau, which has to rule on the legitimacy of the sale before it can take place, to block it. It is also considering court action to stop the government’s move.

    But the government is still pressing ahead with the sale, claiming it will be an overall plus for BC communities and the economy.

    Despite audited financial statements showing the provincially owned rail system returned a profit in 19 of the past 20 years, Campbell insists that, “recent financial losses for the year preceding the sale shows BC Rail is a money-losing public venture.”

    Transportation Minister Kevin Falcon has charged that BC Rail does not have enough rolling stock and other resources to provide adequate services during peak periods, such as during the grain harvest season.

    He also says that despite his admission that the government did provide privileged information to CN Rail, there was no actual wrongdoing, according to the government’s appointed fairness commissioners.

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