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Railroad in Quebec explosion can operate until Feb. 1

Railroad in Quebec explosion can operate until Feb. 1

The railroad involved in July's deadly derailment and explosion of a runaway train in Quebec has had a significant decline in the volume of commodities it transports, including the volume of dangerous goods, said a Canadian regulator Wednesday in extending its permit to continue operations until Feb. 1, 2014.

The Ottawa, Ontario-based Canadian Transportation Agency in September said it had received a request from Hermon, Maine-based Montreal, Maine & Atlantic Railway Ltd., which was involved in the derailment that killed 46 people and destroyed much of central Lac-Mégantic, Quebec, to maintain its certificate of fitness until Jan. 15, 2014.

Following this request, the railroad asked for an extension until Jan. 31, 2014. The agency said it has now decided there is adequate third-party liability insurance coverage, including self-insurance, for the proposed railway operations until Feb. 1, 2014.

According to the decision, the railroad continues to have a self-insured retention of $250,000 in its liability insurance policy in addition to $25 million of third-party liability insurance coverage for any one occurrence and in the aggregate.

The insurer is XL Insurance Co. Ltd., according to Robert J. Keach, a shareholder with law firm Bernstein, Shur, Sawyer & Nelson P.A. in Portland, Maine, who has been named the railroad's trustee.

The agency also said during its review of proposed longer-term operations that it found “a significant decline” in the value of commodities transported by the railroad, including the volume of dangerous goods.


“This equates to a forecasted decrease of over 70% of total traffic with a reduction in the transport of dangerous goods of over 80%,” it said in its order.

The order also said the volume of dangerous goods is expected to decline to 30% of its total traffic, from the preaccident level of 50%.

The agency said the railroad has reduced the distance over which dangerous goods are carried by 90% by no longer transporting crude oil, “which also reduces the overall risk exposure. The greatly reduced volumes combined with much shorter distances over which dangerous goods are carried results in a significant reduction in (the railroad's) risk exposure,” said the decision.

“We are very pleased by the extension and are encouraged that this provides our shippers the security and confidence in the railroad that they deserve,” Mr. Keach said in a statement.