Order No. 2005-R-49

February 3, 2005

File No. R 8005/F1

Under Certificate of fitness No. 99001 dated July 5, 1999, Ferroequus Railway Company Limited (hereinafter FE) is authorized pursuant to section 92 of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA) to operate non-revenue moves related to the testing of a proposed federal railway operation on the Caso Subdivision of the Canada Southern Railway Company, from mileage 112.0 to mileage 112.5 in St. Thomas, Ontario and, through a commercial agreement, on the lines of the Canadian National Railway Company between St. Thomas, Ontario and Québec, Quebec.

Pursuant to Decision No. 388-R-1999 dated July 5, 1999, the Canadian Transportation Agency (hereinafter the Agency) issued this certificate of fitness as it found, at that time, that FE had a bona fide railway proposal, that FE's bona fide railway proposal fell within the jurisdiction of the Parliament of Canada as it crossed a provincial boundary and that FE had adequate third party liability insurance coverage, including self-insurance, to operate non-revenue moves related to the testing of a proposed federal railway operation.

By LET-R-313-2004 dated November 10, 2004, FE was provided with a period of thirty (30) days from the date of that letter to show cause why the Agency should not, pursuant to subsection 94(2) of the CTA, suspend or cancel Certificate of fitness No. 99001 as a result of FE not maintaining adequate third party liability insurance coverage and to provide bona fide evidence that FE still proposes to operate a railway within the meaning of subsection 92(1) of the CTA and, therefore, requires a certificate of fitness.

To date, FE has failed to show cause why its certificate should not be suspended or cancelled. The Agency has considered this matter and finds that FE's insurance coverage is no longer adequate.

Subsection 94(1) of the CTA provides that the holder of a certificate of fitness shall notify the Agency in writing without delay if the liability insurance coverage is cancelled or altered so that it may no longer be adequate or if the construction or operation has changed so that the liability insurance coverage may no longer be adequate.

Pursuant to subsection 94(2) of the CTA, the Agency may suspend or cancel a certificate if it determines that the liability insurance coverage is no longer adequate.

The Agency is of the opinion that in the present circumstances it should suspend Certificate of fitness No. 99001 and provide FE with a period of thirty (30) days to show cause why the said certificate of fitness should not be cancelled.

Accordingly, the Agency, pursuant to subsection 94(2) of the CTA, hereby suspends Certificate of fitness No. 99001.

In addition, FE is provided with a period of thirty (30) days from the date of this Order to show cause why the Agency should not, pursuant to paragraph 94(2) of the CTA, cancel Certificate of fitness No. 99001.

This Order shall be affixed to Certificate of fitness No. 99001 and the suspension of the certificate shall remain in effect until further order of the Agency.