Bob Schmidt's Response to letter: the future of the W&H line

Ross,

Thank you for your continued interest in the W&H. When we last spoke I mentioned that I have been communicating with various groups interested in utilizing the railway and/or right of way for various recreational activities. Some of these included an active trail, rail-biking on the existing inactive tracks, and the possibility of excursion trains. No one in these groups have made a concrete proposal for us to consider.
Unfortunately as is the case when we have explored some of these initiatives as a company, the analysis proved that the rail activities did not produce positive cash flow. And further, we have costs associated with having others utilizing the right of way or rails for some of these initiatives, such as liability insurance, maintenance, taxes, just to name a few. However, often certain groups can secure funding for these operations for warranted and good social policy. Whether its from  departments of Natural Resources or Parks, or Health and Wellness, we are quite open to working together with any parties who come forward with a meaningful proposal which can work in unison with a freight rail operation.

As you may have seen, our 99 year lease with CN for the line from Windsor to Windsor Jct expired on January 1, 2013. We were unsuccessful in negotiating an extension of the lease or a purchase with either a price or terms that we could afford. As a result, CN has put the line up for sale or ultimate abandonment. As you know, our primary corporate goal is viability from freight traffic and revenue. Although the W&H can survive fine with just gypsum traffic when it returns, a preservation of the interchange with CN gives the company much more opportunities to pursue freight traffic in the future. Thus, most of our efforts this last few months has been dedicated to preservation of the 31 miles from Windsor to Windsor Jct interchanging with CN. This is very important for not only freight opportunities, but potential commuter rail, interchange of equipment for excursions etc. We are presently working with the Nova Scotia Economic and Rural Development Authority for assistance on this initiative. We are prepared to take on the responsibility of this liability but need assistance with the provision of affordable financing. Any thoughts you have on support of this initiative would be appreciated.

Of importance with this initiative is the possibility of Municipalities or Provincial departments working together to potentially lease part of our right of way for a trail or any other cooperative potential use. All of your ideas and suggestions are good and admirable, but I believe they are more appropriate for a government authority to undertake and to lease any of our lands or buildings for these purposes.  Any proceeds from some of these opportunities would go directly to paying the debt service for the acquisition of the CN leased line. Again, I have had several meetings and discussions with various of the entities mentioned above, but no one has said affirmatively that they would like to move forward with any specific initiative. I am attaching a brief Power Point presentation which gives a general outline of the support and merits of preserving the CN leased line form Windsor to Windsor Jct. I do like all of your ideas, however we, as a private company focused on freight rail traffic are not able to do these items gratuitously.  However as mentioned, any of these initiatives you suggested, undertaken by a separate non-profit or government entity would be welcome.  We would be happy to work together and if structured properly, we could receive some economic benefit which could go a long way to preserving the entire rail corridor for all of our mutual benefit.  Any thoughts you have with respect to this Power Point and enlisting support for these initiatives would be appreciated.

I look forward to talking further in the future.

Sincerely,

Bob Schmidt

President

The Windsor & Hantsport Railway