A $1.2 billion investment and at least 400 jobs depend on rail service being maintained in north Chatham-Kent, according to Michael Burton, director of economic development.
Burton told The Daily News Wednesday that despite some public criticism of the municipality's purchase of a 26.2 mile CSX rail corridor, including 180 acres of land, between Chatham, Dresden and Wallaceburg, it is a huge win for the municipality.
He said Chatham-Kent has gone from a $6.2 million liability to a cost of $800,000 as a result of an agreement with Canadian Pacific for the sale of the fixtures, such as rails and ties, but not the land, working out to $3.2 million.
Last year, the municipality appealed the $6.48- million net salvage value set by the Canada Transportation Agency, calling the price too high. The municipality eventually entered into a terms of settlement with CSX Transportation, with net salvage fixed at $4 million.
Burton said his department is holding talks with two Chinese companies considering locating in Chatham-Kent and said both would require rail transportation.
"It could become the most successful 26-mile stretch of railway in Canada if the two Chinese companies commit to building in Chatham-Kent,'' he said.
Both Burton and Stuart McFadden, his deputy director, said the search is on now for investors who would want to operate a rail line.
"If it doesn't operate, it will hinder future development in north Chatham-Kent,'' said McFadden.
He said had the proposed Shell project near Corunna become a reality in 2006, the line would have high usage today.
McFadden said six companies on the line currently require rail service and it provides market competitiveness for the agriculture sector.
He said even if the rail line moved only 1,400 cars a year it would equate to approximately 3,000 semi-truck loads on the highways.
"Without the rail line being operational it will have an effect not only on the six companies on the line but on hundreds of local farmers that use their services due to competition,'' he said.
McFadden said having a rail line as an option allows traders to sell their products to more customers which increases the price at the farm gate.
At the same time, he said if the rail doesn't operate and the tracks are lifted, the corridor has multiple uses that could create additional revenue for the municipality, including a right-of-way for cell towers, transmission lines or gas and water lines.
McFadden said Chatham-Kent currently spends about $100,000 annually for rail crossing agreements along the corridor. If rail service stops, the $100,000 would be an annual savings to the municipality.
He said the six companies currently using the line employ approximately 60 direct employees.
McFadden said if the line is to have any success it will have to be on the strength of its business base.