NEWS

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 Keeping you informed!

08/02/02: (CP Release, Calgary, AB)

Last modified 23 August, 2004

8 February, 2002 - The face of railroading in western Canada changed once more yesterday with the announcement of sweeping changes for two regional carriers; Intermountain Rail System and the Southern Alberta Railway and Irrigation Company. Both companies will see extensive corporate restructuring under the direction of Calgary-based Western Canadian Railways.

WCR has long been a majority owner of IRS and has been a minor partner in SARIC holdings since 1999. WCR is looking to expand it's horizons with the partial acquisition of SARIC, and has recently purchased nearly half of the company's rail operations sector. Employees from both railways were assured today that the only drastic changes would be at the management level, and that both IRS and SARIC will remain autonomous and operate as independent railways. No jobs are expected to be lost in the transition.

WCR was formed in 1996 as a private venture to purchase a partial ownership (24%) of the then-faltering Canadian Rocky Mountain Belt project from Canadian National. WCR obtained a controlling interest in the system in 1997, buying an additional 52% ownership stake from the Government of Canada and re-organizing the railway into it's present incarnation. Canadian Pacific Railway owns the remaining 24% of IRS. WCR will remain a silent partner in IRS operations, with this restructuring serving only to integrate management of the two railways and help to create closer ties throughout the new network.

WCR's influence will do great things for SARIC, as the carrier has been struggling through some growing pains of late. SARIC was formed in 1988 by a coalition of southern Alberta farmers looking for a solution to the problem of declining and unpredictable rail service. Although WCR attempted a complete buyout, it was refused by the farmers' coalition. Coalition chairman Aaron Wiser wasn't surprised by the vote: "I see no reason why we should sell control of our own operations. If reliable and affordable rail service had been properly provided in the first place, we wouldn't be having this conversation today." Negotiations were finally settled with WCR purchasing 49% of SARIC. The influx of WCR capital will probably help to resolve some concerns in the SARIC camp, as the carrier is currently embroiled in negotiations to purchase CP's idled Lomond subdivision and to acquire several newer locomotives. The deal should be good news for farmers as well, as it will likely translate to more frequent service and quicker connections to bigger markets.

Although the farmer's coalition will retain majority ownership of SARIC, management responsibilities and daily operations will be passed to WCR. The transfer is expected to be complete by March 15, 2002. WCR Chairman/IRS CEO Adam Meeks assured stockholders that no service interruptions are expected.

The deal expands WCR's rail network to a total of 3568 Km of track throughout British Columbia and southern Alberta. Industry insiders have fingered both IRS and SARIC as "ones to watch" as the western Canadian rail industry continues to gain market share in the transportation sector. --CP

More news to follow!