CP ordered to lift embargo against MMA
Canadian Pacific Railway has been ordered by a federal agency to resume the transfer of cargo traffic to Montreal Maine and Atlantic Railway.
Calgary-based CP had expressed concerns about the fitness'' of the insolvent short-haul railroad to safely handle hazardous substances in light of the deadly derailment and crash last month that devastated Lac-Megantic, Que.
But MM&A told the Canadian Transport Agency that it was suffering it irreparable financial harm by CP's boycott and the CTA issued an order late Wednesday that overrides Canadian Pacific's decision.
Canadian Pacific says it is reviewing its legal options.
While we disagree with this order, we have taken immediate steps to comply,'' CEO Hunter Harrison said in a news release. `The CTA, as federal regulator, has satisfied itself that MM&A is fit to operate and has adequate insurance to do so.''
The rail tankers that derailed in Lac-Megantic — causing a fire that killed 47 deaths, displaced thousands and destroyed the city's core — were carrying crude oil that originated in the U.S. Midwest and carried part of their journey by CP.
MM&A is a short-haul railway that was hired to move the tankers on one leg of a journey between the U.S. Midwest and an Irving refinery in New Brunswick.
CP Rail issued an embargo after the agency withdrew MM&A's certificate of fitness, which suspended its ability to operate. The transportation agency agreed to reinstate the certificate three days later, allowing MM&A to continue to operate until Oct. 1, providing it proves holding adequate insurance.
Canadian National Railway had initially also cut off Montreal Maine & Atlantic from receiving interchange traffic but voluntarily resumed the practice.
A Quebec court overseeing MM&A's creditor protection case is convening Friday morning to decide whether to provide the insurance guarantees that would allow the railway to meet the agency's requirements to regain its operating licence.