BC Rail odds and ends

I know I used this picture just the other day.  But check out the words behind the salesman… “BC Rail Partnership Investment”.  Partnership Investment?  How did the sale of BC Rail to CN turn into a “partnership investment”?

The answer is, it never did.  At no point in time was the BC Rail deal a partnership.  That’s according to documents the ministry of Finance provided to the Evaluation team in the fall of 2002.

Earlier that year the Premier and staff met with Mayors of communities affected by the sale of BC Rail.  The mayors were given a worst case financial scenario (more on that later) to soften them up for the government’s reversal of a key campaign promise.

According to Evaluation Committee notes, the mayors, amongst other things, told the Premier they wanted to see more of a partnership.

Bingo!  Off they went trying to determine how a sale could be turned into a partnership.

So the Evaluation Committee asked about the definition of a partnership.  And it seems that, unlike a sale, the deal would have to retain a significant measure of ownership and control on the part of the government to be a legally defined partnership.

That wasn’t going to happen.  As I reported earlier, the Evaluation Committee was always clear – the restructuring of BC Rail was a sale, clear and simple.

But the “partnership” word stayed put in the BC Liberal discourse because someone wanted to fudge the truth.  It’s called spin for a reason.


Throughout the fall of 2002 and spring of 2003 the Evaluation Committee, BC Rail Executives and various government ministers and staff toured a presentation on BC Rail around stakeholder groups, including the aforementioned Mayors group.

The presentation laid out a dire financial picture of declining revenues and increasing capital costs adding up to growing losses.  It was helped along by some highly questionable charges that turned surpluses into losses, as Will McMartin has documented.

The presentation also casts forward for its bad news, in particular showing a significant decline in revenues related to coal shipments.  In an April 2003 version of the presentation, under the heading “Narrowing and shrinking revenue base” the slideshow noted that “NE coal traffic ended in April 2003, ending BC Rail’s only efficient unit train operation.”

But was that the end of the coal opportunity?

Not according to Chris Trumpy, the head of Treasury Board staff.  Trumpy, writing the day after an April 24th presentation of the slideshow, was concerned that the bid documents outlining the opportunity to prospective buyers, undervalued the railroad because they didn’t take into account future opportunities.

Like coal.

“i wonder wheter you feel it would be advisable to include in this para how much coal is in the province – there are huge reserves of high quality coal available and depending on what happens to commodity prices could present an opportunity (this is after all a marketing document)”, Trumpy wrote.

Telling stakeholders and the public one thing, bidders and donors another.

That might be the modus operandi for this government and this deal.

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