Aug 16 Canada will let the rail company whose
tanker train blew up in a Quebec town last month, killing 47
people, operate through early October after the firm provided
new evidence about its insurance, a government regulator said on
The July 6 crash was North America's deadliest rail accident
in two decades. It took place when a runaway train hauling
tankers of crude oil derailed in the center of the little Quebec
town of Lac-Megantic, and exploded in a series of giant
fireballs. The town center was flattened and an estimated 1.48
million U.S. gallons (5.6 million liters) of oil were spilled.
The Canadian Transportation Agency said it will now allow
Montreal, Maine and Atlantic Railway (MMA) and its Canadian
subsidiary to operate through Oct. 1, because the firms had
provided evidence of adequate third-party insurance.
That reversed an Aug. 13 order that would have halted the
railroad's operations from early next week. MMA must still show
it has the funds to pay the self-insured portion of its
operations, or the regulator will suspend its operations from
Aug. 23, CTA spokeswoman Jacqueline Bannister said in an email.
MMA, which operates rail lines in Quebec and Maine, filed
for bankruptcy protection in Canada and the United States last
week. It said in a court filing that its insurance covered
liabilities up to C$25 million ($24.2 million), while clean-up
costs could exceed C$200 million ($193.6 million).
MMA also faces a series of class-action lawsuits in Quebec
and in the United States on behalf of the victims, as well as a
notice of claim from a firm that is unable to ship from its
Lac-Megantic production facilities.
Lac-Megantic, a town of around 6,000, was developed around
the railway and businesses have already expressed concern about
the impact if the MMA rail link closes permanently.
Under Canadian federal regulations, there is no set minimum
or maximum amount of insurance coverage required for railway
operators. Coverage is based on a risk assessment carried out by
the insurance company and the railway company.
The Canadian Transportation Agency - an independent
government body that oversees railway insurance - is now
planning to review the adequacy of third-party liability
coverage to deal with catastrophic events, especially for