CP completes Detroit River Rail Tunnel acquisition

Canadian Pacific
Steve Gilschinksi

Canadian Pacific (CP) has announced it has completed the acquisition of an 83.5 percent stake in the Detroit River Rail Tunnel from certain affiliates of OMERS, the defined benefit pension plan for municipal employees in the province of Ontario.

CP previously owned a 16.5 percent stake of the tunnel in partnership with OMERS, and following this acquisition, CP becomes the sole owner. The purchase price for the transaction is approximately USD 312 million, subject to customary closing adjustments.

The 2.6 – km tunnel connecting Windsor and Detroit will continue to be operated by CP. The acquisition of the tunnel will reduce the operating costs related to movements through the tunnel.

Canadian Pacific and OMERS entered purchasing agreement in October 2020.

OMERS has firstly invested in the Detroit River Tunnel Partnership in 2001, owning this cross-border rail tunnel linking Detroit, Michigan and southwestern Ontario which. The rail connections is an essential transport link for commercial rail freight services between the United States and Canada in the critical transport corridor between the Port of Montreal and Chicago.

The tunnel was built by the Detroit River Tunnel Company for the Canada Southern Railway, leased by the Michigan Central Rail and owned by the New York Central Rail. The rail tunnel was opened in 1910 and it is currently in a good state, although the transport needs of CP for double-stacked trains require more capacity. The railway operator is paying access charge to CN Rail to use the tunnel in Sarnia when larger cars need to cross the border.

In 2019, Amtrak, the US state-owned rail passenger operator, announced its restoration intention for Detroit – Toronto transport service under the USD 1.8 billion budget request. Amtrak anticipated that the Chicago/Western Michigan – Detroit – Toronto corridor has growing opportunities. The Michigan central station has transport connection through the Detroit River rail tunnel.


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