This HuffPost Canada page is maintained as part of an online archive.

Montreal Maine & Atlantic Railroad Suspended By Canadian Transportation Agency

Transport Agency Shuts Down MM&A
CP

The Canadian Transportation Agency has effectively stopped the Montreal, Maine & Atlantic (MM&A) railway from operating in Canada over concerns the company involved in the Lac-Megantic disaster isn't adequately insured.

The agency had renewed MM&A's certificate of fitness as recently as last month, but in a statement issued Tuesday, the CTA said the company had not managed to assure them it has the necessary insurance to continue operating.

Faced with multiple lawsuits and cleanup costs estimated at more than $200 million, MM&A filed for and got bankruptcy protection last week, about a month after the July 6, explosion that levelled parts of downtown Lac-Megantic, Quebec. Forty-two people have been confirmed dead in that blast, with five still listed as missing.

"This was not a decision made lightly, as it affects the economies of communities along the railway, employees of MMA and MMAC, as well as the shippers who depend on rail services. It would not be prudent, given the risks associated with rail operations, to permit MMA and MMAC to continue to operate without adequate insurance coverage," Hare said, referring to the Canadian and U.S. divisions of the railroad.

More From Canadian Press: OTTAWA -- The company at the centre of the Lac-Megantic, Que., train disaster has had its operating licence suspended in Canada, in a severe blow to an already crippled railway.

The Canadian Transportation Agency announced Tuesday that it's revoking the certificate of fitness for the Montreal, Maine & Atlantic Railway.

The federal agency said it contacted the company to ensure that it has topped up its insurance, following the myriad financial claims against it in the wake of the derailment.

But the agency said it's not satisfied the embattled company has purchased sufficient new insurance _ so the licence for the railway and its Canadian branch will be revoked as of Aug. 20.

"This was not a decision made lightly,'' said Geoff Hare, chairman of the arm's length federal regulator.

"It affects the economies of communities along the railway, employees of MMA and MMAC (Montreal, Maine & Atlantic Canada), as well as shippers who depend on rail services.

"It would not be prudent, given the risks associated with rail operations, to permit MMA and MMAC to continue to operate without adequate insurance coverage.''

The railway has already filed for bankruptcy protection and its survival now seems a longshot.

Forty-seven people died when an MMA train slammed into Lac-Megantic, Que., and erupted into fireballs on July 6. Since then, several lawsuits have been filed, a criminal investigation is underway, rail standards have been tightened, and the provincial government has demanded money from MMA for cleanup efforts.

In its statement, the agency also said it will undertake a review this fall of insurance coverage at federally regulated railways, given the ongoing increase in shipments of crude oil and other hazardous materials.

An official in the office of MMA chairman Ed Burkhardt, contacted this morning, said he wasn't yet aware of the licence suspension.

Also on HuffPost

Close
This HuffPost Canada page is maintained as part of an online archive. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.