Railway in Quebec crash allowed to operate until Oct. 18 -Canada

TORONTO, Sept 26 Thu Sep 26, 2013 3:05pm EDT

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TORONTO, Sept 26 (Reuters) - The U.S. company whose runaway oil tanker train exploded and killed 47 people in a small Quebec town in July can operate trains through Oct. 18, Canadian regulators said on Thursday in a ruling that prolongs a temporary extension by about two weeks.

But the Canadian Transportation Agency said it had not yet decided whether to grant a request from Montreal, Maine and Atlantic Railway and its Canadian subsidiary for permission to continue operations until Jan. 15, 2014.

The company filed for bankruptcy protection in August, just weeks after the Lac-Megantic disaster.

The explosion obliterated the center of the lakeside town, and some 1.5 million U.S. gallons (5.6 million litres) of oil were spilled, causing hundreds of millions of dollars in damages and cleanup costs.

The transportation agency said it is satisfied that the rail company holds adequate insurance to operate until Oct. 18, and that it will rule on the request for an extension by then. An Oct. 9 bankruptcy court hearing could affect that decision, it added.

The agency had originally ordered MMA, which runs rail lines in Quebec and Maine, to cease operations in August due to inadequate insurance.

It lifted the order after the company provided documentation showing it had sufficient third-party insurance and enough funds to cover the self-insured portion of its operations. (Reporting by Solarina Ho; Editing by Janet Guttsman and Mohammad Zargham)

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