Canada: Sherbrooke – Montréal railway project supported by real estate development

The project for the modernisation of Sherbrooke – Montréal railway link will cost CAD 300 million (around USD 230 million), according to the latest report elaborated by Bluejay Advisors. As the current owner of the railways does not want to invest, part of the funds might come from the real estate.

Montréal
Sherbrooke rail station

The report indicates a cost of CAD 124 million (USD 95 million) necessary for the relocation of Farnham rail station, CAD 91 million (around USD 70 million) for the rehabilitation of the railways and another USD 10 million (USD 7.6 million) for the construction of a multi-modal railway station for Sherbrooke and Magog.

The document stipulates that the current owner of the railway, Central Maine and Quebec Railway (CMQR) is not interested to invest in the modernisation of infrastructure, but could sell it for USD 20-30 million, keeping the right for operation. “They are not trying to sell no matter what, but it is an option they consider”, says Michael Howard, special councillor of the urban planning and design office of Sherbrooke. He is also a member of the executive committee composed of the representatives of the cities located along the railway route.

François Rebello, President of the Night Trains Foundation, which manages the financing of this initiative, is turning to real estate developers to complete the budget. “I must work to generate revenues around real estate projects in order to make railway investments profitable”, he explained in reference to the project developed by Brightline in Florida.

The project can create 400 jobs

According to first estimates, the participation of the cities will amount to CAD 21.5 million (USD 16.5 million), but it might drop. It is estimated that the project will generate 400 new jobs and annual revenues of CAD 57 million (USD 44 million).

During the discussions on the railway project, several localities have stepped in. One of them is Farnham which offered to grant a 10-year financing by instalments of almost half a million Canadian dollars (around USD 383,000 American dollars) to the Night Trains Foundation. Bromont took its example a committed to CAD 1 million (around USD 765,000) over the same period. Sherbrooke will have to assume most of the financial envelope by granting CAD 3 million (USD 2.3 million) spaced out over a decade. Bromont will use one of the railway stations in the region, just like Farnham.

The missing CAD 44 million (USD 33.7 million) were expected from two governments, the regional and the central governments: 18 million (USD 13.7 million) from Québec and 26 million (almost USD 20 million) from Ottawa. However, these initial estimates have been increased.

Maximum speed of 130 km/h

The project specifications indicate that trains will be capable to reach a maximum speed of 130 km/h between Brossard and Bromont and of 100 km/h between Bromont and Sherbrooke. Beside passenger trains, the project also envisages the construction of a new intermodal centre in Magog industrial park to permit the stationing of the wagons during seasonal changes and during economic periods with less activity. It will generate 4,000 additional wagons a year on a ten-year period. Magog centre will also eliminate stationing along the railways, while the boarding point for the touristic train will be moved.

The data sheet of Sherbrooke says that the municipality will become the owner of the surplus trains located south of Nation Lakes after the existing depot and switchyard will be eliminated, as well as some of the switching sections. Lands could be transformed into an urban area to improve the dynamics of the real estate system. Discussions on the subject have occurred since 2015, but they have been interrupted until the finalisation of the project.

In Sherbrooke, there are not enough plain fields to build a switchyard. The only two functional spaces are the existing ones, in the city centre. On the other hand, Magog is the perfect place because it is already within the industrial area and it is isolated.

Investments in the network include those for the establishment of a transhipment centre in Brigham, of a railway service with an intermodal centre for limestone in Bedford and the signalling system between Brossard and Sherbrooke. The installation of an electronic signalling system including automated switches will increase railway safety, while level crossings will be equipped with barriers. At the same time, no tank wagon will be stationed in the urban area after the finalisation of the project. According to the report, it is estimated that the train will eliminate 350,000 cars off the highway, will reduce by 30,000 the number of cargo trucks and will reduce by 11,840 tonnes a year the greenhouse gas emissions.

Several financing sources

The financing model to be used is 50% from the Federal Government, 35% from the province and the rest of 15% from the municipalities. The project has been submitted to financing to Transports Canada’s Fonds National des Corridors Commerciaux (FNCC). A programme of the Canadian Government, FNNC plans to resolve the problems caused by the bottlenecks and vulnerabilities of the transport network on commercial corridors. CAD 2 billion (USD 1.53 million) are available for 11 years.

According to the market study published in 2017, more than 2,000 people could use the train to travel between Montréal, Sherbrooke and Boston every day. This figure was enough for the project to be consider viable from the social and economic perspectives and the feasibility study was launched. Under the project, passenger trains should cover the distance of 130 km between Montréal and Sherbrooke in two and a half hours, with stops in Saint-Jean-sur-Richelieu, Farnham, Bromont and Magog.

More than 6,000 km of railways in Québec

Québec’s railway network amounts to 6,280 km of railways integrating into the North-American railway network and serves urban, semi-urban and rural environments. That is why railway transport plays a major part in Québec’s economy.

The Ministry of Transport is the owner of two railway companies – Chemin de fer de la Gaspésie (from Matapédia to Gaspé, 325-km long) and Chemin de fer Québec Central (from Charny to Sherbrooke, 212-km long). Le Chemin de fer de la Gaspésie is currently subject to a major rehabilitation project.

These two state-owned companies are backed by railway companies under the authority of the State of Québec, which exploit over 1,700 km of railways, such as local-interest railway networks (CFIL), factory railways, the railways operated by public transport companies and more than 100 industrial sites.

Sherbrooke is an important railway hub operated by Saint-Laurent & Atlantique (SLQ) and Québec Central Railway (QCR), connected to Canadien National and Canadien Pacifique.

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