Editor,
I know nothing of the finances of BC Rail, nor its operations (although some of its retired staff play a mean game of golf) , and my opinion of the provincial government isn't printable. But I read Will McMartin's article singing the praises of BC Rail with sadness because he seems to be playing the same mis- information game as that which he accused the Minister of Transportation of playing ["Liberals, stop lying about BC Rail," The Chief, April 2].
Will declares that the Minister Shirley Bond needs to learn how to read financial statements; maybe he should learn how topresent them.
Firstly , in the early part of the last century railway systems were regarded as an essential part of a nation's defense system and in North America, by the 1950's that view was extended to include the economic and development of the country. As a political expedient , BC Rail was used as the vehicle to undertake many of the development projects of the province , rail lines to MacKenzie , Tumbler Ridge , 老澳门六合彩开奖记录资料-Prince George.
The logic was that the benefits from these developments would improve the business activity of BC Rail. It was BC Rail's job to make it all work. It's beyond me why they were stuffed with Vancouver Wharves or Canadian Stevedoring.
So where is Will confusing the issue?
Operating Profits come from running a business, collecting revenue , paying the costs/expenses and having something left over.
He goes on at length to declare how much operating profits BC Rail generated over many years.But he doesn't say that those profits have to be enough to pay for interest costs and ultimately dividends (which is just another word for Interest - paid to a different class of lender). They weren't.
He tells us that BC Rail had $1.4 billion in assets and at some time its long term debt was $562 million implying that it must therefore have been a healthy company. He says that by comparison in 2004 CN had $4.6 billion and CP $3.1 billion.It would have been better to tell us how much interest each company incurred , and how many times their Operating Profit covered the interest on its debt. If the interest is higher than the operating profit , you're in trouble , no matter how many box cars you own.
Oh , and all those assets that were worthless , and caused great big write offs. Well that must be because they weren't depreciated during their lifespan. It's like buying a new car in 2005 and pretending to yourself that it's still worth its original price. See if that gets by your Pontiac dealer at trade in time.
And that's the issue . Bankruptcy isn't how many engines you own , or how many miles of track you run. It's simple . Can you pay your bills as they come due. If you can't, you're Bankrupt. And if you're bankrupt , you didn't do your job.
So I'm sorry to say that if BC Rail had to have it's debts written off several times and had to have its interest costs subsidised just to survive , then Minister Shirley's nose isn't as long as Will suggested.; unless she talks about the sale of the rail , then who knows !
Perhaps the moral to all this is that if Governments , Federal , Provincial OR MUNICIPAL , hide their debt incurring behavior inside subsidiary companies , or take on projects that are outside their core business , then how do we poor citizens ever figure out what's going on. Insert "SODC" here if you wish.
Donald Graham
Brackendale
