By BILL TIELEMAN, 24 HOURS March 3, 2009
Canadian Pacific Railway alleged that the "actual value of the bids" in the $1-billion privatization of B.C. Rail in 2003 were known by winning bidder Canadian National and others before a decision was made by the B.C. government, according to newly released confidential government documents.
The explosive allegation was made in a letter to Ken Dobell, Premier Gordon Campbell's then-Deputy Minister, on Nov. 17, 2003 - just eight days before the sale of B.C. Rail to CN was announced.
The letter is part of 8,000 pages of documents ordered released by B.C. Supreme Court Justice Elizabeth Bennett last week in response to an NDP court application.
The information was obtained through Freedom Of Information requests by defence counsel acting for David Basi, Bob Virk and Aneal Basi, three former government aides facing corruption charges related to the sale of B.C. Rail.
CPR dropped out of the bidding, calling the process "unfair" because it believed the B.C. government leaked confidential B.C. Rail information to CN, giving that company a clear advantage in preparing its bid.
The letter from Marcella Szel, CPR vice-president strategy and law, says that its "market intelligence" showed "that CN was speaking directly to B.C. Rail shippers about their bid, with what we must consider the approval of the [B.C. Rail] Evaluation Committee, since the confidentiality agreement clearly stated no such discussions were to be held without consent."
"This feedback included the marketplace being aware of the actual value of the bids," Szel told Dobell.
The letter was sent three days after a Vancouver Sun story Nov. 14, 2003 speculated CN would be announced as the winning bidder - a story that CPR says the government leaked.
The documents show that both CP Rail and Burlington Northern Santa Fe - which was supporting the bid of OmniTRAX - sent letters to the B.C. government in November 2003 bitterly denouncing the leak of confidential B.C. Rail information to Canadian National, the eventual winning bidder.