Railway company at centre of Lac-Megantic disaster loses Canadian licence
Published Tuesday, August 13, 2013 11:11AM EDT
Last Updated Wednesday, August 14, 2013 12:17AM EDT
The railroad company responsible for a runaway train that exploded in Lac-Megantic, Que., killing at least 46 people, will have its operating licence suspended in Canada.
The Canadian Transportation Agency announced Tuesday it will suspend the “certificate of fitness” for the U.S.-based Montreal, Maine & Atlantic Railway Ltd. and its Canadian subsidiary. The suspensions take effect Aug. 20.
The federal regulator said MMA has not been able to restore adequate third-party liability insurance after the July 6 Lac-Megantic disaster.
In a statement, chair and CEO of the Canadian Transportation Agency, Geoff Hare, said the decision to suspend MMA’s licence was not “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.”
But Hare said “it would not be prudent” to allow MMA to continue to operate in Canada without proper insurance coverage.
MMA president Robert Grindrod told The Canadian Press Tuesday that he hadn’t seen any documents about the licence suspension.
“I know nothing about it…so I can’t make any comment,” he said.
Last week, MMA filed for bankruptcy protection in the United States and was granted creditor protection in Canada. The company said it did not have enough assets to cover the costs of the deadly derailment.
A number of class-action lawsuits are being planned against MMA.
The Canadian Transportation Agency said Tuesday it is planning to review the insurance coverage of federally regulated railways in the fall.
“Increasing shipments of crude oil and other hazardous materials by rail highlight the need to determine how best to ensure that railways, small and large, have appropriate levels of third party liability coverage, including for possible catastrophic events such as Lac-Mégantic,” the agency said in a news release.
The train that derailed in Lac-Megantic was carrying crude oil and caused massive explosions that wiped out half of the downtown core.