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State of forest industry stalls rail extension plan in Timmins.

A study conducted early last year showed extended rail service in Timmins was feasible, but given the current economic conditions for the forest industry, it is too expensive.

A project team of the City of Timmins joined by Grant Forest Products, Tembec Industries, Domtar and Porcupine Joint Venture commissioned the study by Canarail Consultants out of Montreal. Timmins Economic Development Corp. economic development officer Clara Lauziere says the study found that extending a freight rail service from lines east of the city to serve forestry companies at the west end of the city was at least feasible.

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"Once the study was completed, the partners sat back down and talked about what the study said about what the initial investment was going to be. It was decided they were not going to move forward with implementation," Lauziere says. "It's not a good time with all these issues facing the forestry industry like softwood lumber.

"It's still on the table for the future. It's just not a good time to move ahead, now," she says.

The 100-page report indicated the cost for such a venture would be about $30 million and would enable forestry companies like Domtar, Grant and Tembec to transport more of their product by rail. Lauziere says the study did show there would be an economic benefit and forestry companies would be able to save some money on transportation.

The study identified a route from Ontario Northland freight rail lines east of the city, circling to the south of the city and coming back up to the west end. As it is, if the various forestry companies wish to ship materials by rail, it first has to be put on trucks and transported through the city to depots east of the city. Expansion of rail service has already been identified as an important step in the city's strategic plan.

"Obviously, issues like insurance rates going up have hit a number of sectors and it has caused transportation costs to increase. The costs for trucking have gone up exponentially," she says. "They (the partners) were saying that if that trend were to continue then they would have to look at this."

Lauziere says, in addition to the cost, there are issues about where the wood goes as well, since not every destination is served by rail.

"For information purposes, the study was great and everyone is extremely happy with the results," she says. "It's just not the right time to move forward."

Simply going through the exercise has proven a valuable experience for all the parties involved and points the way to future collaborations, says Lauziere. However, some information that was collected by the report such as how much each company could save as a result of this proposal is still kept close to the vest for competitive reasons.

The study remains the property of the partners and, if they choose, they can move forward with the plan in the future, she says.

By ANDREW WAREING

Northern Ontario Business
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Author:Wareing, Andrew
Publication:Northern Ontario Business
Geographic Code:1CONT
Date:Mar 1, 2004
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