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Maine Prepares for Possible Shutdown of MMA Railway
07/30/2013   Reported By: Jay Field

Montreal, Maine & Atlantic Railway says it has no plans to stop operating in Maine in the wake of the derailment and fire in Quebec that killed 47 people. But that hasn't stopped the state from preparing for just that scenario. Maine transportation officials say the state would be foolish not to make such continegency plans, which have been prompted, in part, by concerned phone calls from some of the customers that ship freight with the railroad. Jay Field has more.

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Shippers from around Maine are calling the Department of Transportation, asking the same basic question about MMA: "If they should stop serving or if they should file bankruptcy, what would happen?" says Nate Moulton, who oversees the rail program at the Maine Department of Transportation.

MMA's customers in Maine include Great Northern Paper in East Millinocket. Moulton would not say which MMA customers had called the state.

"We're trying to be a resource, as much as anything, to those businesses and shippers, talking about what the process would be and what the opportunities, for them as shippers, to weigh in to that proceess are," Mounton says.

Moulton and his staff have also been working with MMA and its customers to solve a more immediate problem.

"Obviously that line is severed at Lac Megantic. And so, there's shipments that usually go that route that have been - had to be rerouted to find their way - whether it be west or south or whatever," Mounton says. "They've been working with us on that, as well as the other railroads in the state, to get that traffic moved."

In an e-mail, MMA's Chairman Ed Burkhardt said the railroad has no current plans to stop operating in Maine. But despite Burkhardt's assurances, questions about MMA's future are likely to continue.

Since the derailment and fire in Lac Megantic, the railroad has laid off nearly a third of its workforce in Quebec. Authorities in the province have raided MMA's offices as part of their investigation into the accident. Quebec's environment minister has invoked the government's executive powers in an effort to force the railroad to pay damages related to ongoing environmental impact and cleanup. And families of the 47 people killed in the explosion have begun filing lawsuits against MMA.

"Most of the expert opinion I've seen thinks they can't survive this Lac Megantic disaster," says Chop Hardenbergh, who edits the newsletter Atlantic Northeast Rails and Ports. Hardenbergh says in addition to all the financial and legal exposure MMA faces, the inability to move freight through Lac Megantic means the railroad can no longer transport oil from out west to the Irving Refinery in Saint John, New Brunswick.

"Anything they turn over to other railways, which originates on their own line, which is basically Great Northern Paper, they only have what's called a short haul," Hardenbergh says. "They have to take it to either Pan Am or New Brunswick Southern, which is a move of, say, 50 miles, when they could be hauling it all the way to Montreal and making a lot more money off of it."

Hardenbergh says the most likely scenario would be one where MMA declares bankruptcy and sells off its remaining assets to another railroad that's eventually able to reopen the lines running through Lac Megantic.



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