TORONTO (AP) — Canada's transportation agency said Tuesday it will suspend the operating license of the U.S.-based rail company whose runaway oil train derailed and exploded in a Quebec town, killing 47 people.
The agency said it planned to take away the certificate of fitness for the Montreal, Maine & Atlantic Railway and its Canadian subsidiary, effective Aug. 20.
The transportation agency said it wasn't satisfied that the troubled company, which has filed for bankruptcy since the July 6 disaster, has demonstrated that its third-party liability insurance is adequate for ongoing operations.
The parked train, with 72 tankers of crude oil, was unattended when it began rolling and derailed in the center of Lac-Megantic. Several tankers exploded, destroying 40 buildings. The company has blamed the train's operator for failing to set enough hand brakes.
The agency said the disaster has raised questions about the growing use of rail transport for oil, including important ones regarding the adequacy of third-party liability insurance coverage to deal with catastrophic events, especially for smaller railways.
"This was not a decision 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," Geoff Hare, the agency's chief executive, said in a statement.
Spokeswoman Jacqueline Bannister said the transportation agency could reconsider its decision if the railway demonstrates they have sufficient insurance. Bannister said the company did provide some information to the agency, but they did not get all the information requested. She said they were looking to see if the railway was able to restore their insurance level to at least what existed prior to the derailment, but the railway failed to do so. MMA and MMAC were informed of the decision Tuesday morning before the public announcement, she said.
In the wake of the disaster, the regulator has also announced plans to review the insurance coverage of federally regulated railways this fall, given sharp increase in shipments of crude oil in recent years. This year, more trains carrying crude will chug across North America than ever before — nearly 1,400 carloads a day. In 2009, there were just 31 carloads a day.
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