PROVINCE PURSUES REASONABLE NET SALVAGE VALUE FOR SHORT LINES

Released on February 23, 1999

Highways and Transportation Minister Judy Bradley today announced that

Saskatchewan is applying for changes in the way rail lines are valued

to make short lines more affordable for groups in Western Canada

interested in buying them.



"We are asking the Canadian Transportation Agency to exclude the value

of rail line upgrades, paid for by the federal government, when they

are determining the net salvage value of a rail line," Bradley said.



Before a railway abandons a line it is required to offer the branch

line to the federal, provincial and municipal governments for net

salvage value. To date, the railways have been including these costs

when determining the sale price.



"To purchase these branch lines, we are required to pay for upgrades

that taxpayers have already paid for," Bradley said. "When

rehabilitation upgrades are included, the net salvage value of the

track goes up from about $20,000 per mile to $60,000 per mile putting

the cost out of reach for many groups trying to save branch lines in

their area."



Between 1977 to 1989, the federal government invested over

$600 million to upgrade Saskatchewan's grain dependent branch line

system. There are many years of useful life left in these assets.

This program was called the Prairie Branch Line Rehabilitation

Program and Canadian National Railway received the largest share

of the proceeds.



The Canadian Transportation Agency is being asked to consider a

general case, which would apply to all rehabilitated branch lines

in the province. Generally, the agency decides these types of

issues within 120 days of filing.



"Ultimately, we want to lower the purchase price of abandoned

branch lines across the province to improve producer and

community groups chances of owning and operating viable short

line railways," Bradley said. "There are several groups

currently involved in negotiations that would benefit

significantly from a favourable ruling."



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For more information, contact:



Bill Cooke

Grain and Rail Specialist

Highways and Transportation

Regina

Phone: (306) 787-5526