financial difficulties could jeopardize the proposed Alaska-Canada railway project
An ambitious plan to build a 1,600-mile railroad that would link the rail systems of Alaska and Canada is on hold and appears to be under threat.
A year ago, former Alaska Lieutenant Governor Mead Treadwell and other heads of state were excited about the Alaska to Alberta Railroad project to build a road from northern Alberta to the eastern interior of Alaska to transport raw materials such as minerals or bitumen for export.
“We hope to start getting the official permits with the environmental impact assessment process at the end of the year or early next year,” Treadwell said in an interview last September.
But now it’s hard to find that initial enthusiasm. Treadwell, the vice president of the project, does not speak publicly about the $ 17 billion project. In addition, the president of the Calgary-based railway company left, along with other senior executives, after being accused of financial improprieties.
Meanwhile, those still in the business seek to protect it from creditors to avoid liquidation while they try to sell it or refinance the project. And the proposed railroad’s main lender is in receivership as authorities investigate allegations of financial wrongdoing.
All of this has left Alaska Railroad President and CEO Bill O’Leary wondering about the future of the project.
âIt certainly seems like a tough situation at this point,â he said, âand I think most of their efforts are aimed at trying to figure out what their next steps are.â
O’Leary said in a recent interview that he still supported the idea of ââan Alaska-Canada railroad that would connect to the Alaska Railroad. It’s a concept that has been proposed several times over the years, and he says the Alaska to Alberta railway proposal is the most promising he’s seen. Now, however, he is uncertain about his future.
“But, at this point, I’m not sure I have – I know I don’t have any – inside information on how this is all going to play out,” he said.
Fairbanks Economic Development Corporation President and CEO Jim Dodson also strongly supports the project. But he says he, too, is now worried about whether that will come to pass.
“All a mess about the financing of the project,” he said. “Whether the guy who owns it is in financial difficulty, or whether it is an institution that is in financial difficulty …”
The owner is Winnipeg businessman Sean McCoshen. And evidence uncovered by investigators suggests he and the lender, Bridging Finance, are both in trouble. CBC reports that an Ontario Securities Commission investigation uncovered numerous financial “irregularities” between McCoshen and Bridging Finance. And according to the Toronto Globe and Mail, millions of dollars from the lender intended for the rail project were instead transferred to McCoshen’s personal bank account. His name no longer appears on the A2A company website and the Globe and Mail claims he has not been seen for over two months now.
âHonestly, I don’t know if we still have to hope,â Dodson said.
He says he’s trying to keep his judgment on the company and its ability to build the A2A railroad. But he adds that it is difficult to stay enthusiastic, especially since the company has not provided any information on the project since it issued a statement three weeks ago announcing its bankruptcy and the receivership of the lender.
âTo my knowledge, no further clarification has been offered,â Dodson said.
Some clarity may come from an Alberta judge’s decision on Monday to appoint an interim receiver and allow it to take control of the Alaska to Alberta Railway and manage its operations and assets.
A knowledgeable person on the issue who spoke in the background said the judge’s action should pave the way for either selling the business or refinancing the project.