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UMTI director discusses Port of Churchill shutdown

July 29, 2016 — 

Adolf Ng, director of the Transport Institute at the University of Manitoba’s Asper School of Business, spoke to Martin Cash at the Winnipeg Free Press about the recent decision of Omnitrax Canada, owner of the Port of Churchill and the Hudson Bay Railway, to shut down operations for the Port of Churchill.

According to the article, a group of leaders from Northern communities met with provincial cabinet ministers to find solutions to the closure and its possible impacts on the local economy.

Omnitrax has said negotiations with a consortium of Northern First Nations to acquire the assets have been going on for several months.

But the point has been made by several observers that without changing the revenue model it won’t matter who owns the assets because it will always be difficult to turn a profit.

Adolf Ng, the director of the Transport Institute of the Asper School of Business at the University of Manitoba, said, “That kind of transportation infrastructure has high fixed costs and is very capital intensive. Even if they (a First Nations consortium) took it over it will still be a small scale operation and they will still struggle to sustain long term operations.”

But Ng said that the operation of the rail line is obviously crucial to the northern indigenous communities and it makes sense that they should be part of an ownership scenario. But he suggested that a joint venture with a well-capitalized international port operator might make sense.

“The fact that Omnitrax is looking to leave the market highlights the urgency that the Churchill Gateway needs to think of a way to make it more integrated with the global logistics or global supply chain,” Ng said.

Read the full article.

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