Montreal billionaire André Desmarais has joined one of the consortiums angling to build and jointly operate the federal government’s new high-frequency electric railway.
Global News has learned that a newly incorporated Desmarais company, DF Canada Infrastructure Group Inc. of Montreal, has joined another billionaire, Toronto businessman Larry Tanenbaum and his Kilmer Transport as members of Intercity Rail Partners, one of three consortiums bidding on the railway that will serve riders between Windsor, Toronto, Ottawa, Montreal and Quebec City.
The precise roles of DF Canada Infrastructure Group and Kilmer Transport, and their financial contributions to the Intercity Rail Partners venture are unclear.
Tendering documents identify both as “equity members” but say nothing more.
The billionaires are among several high-powered infrastructure investors, builders and operators that Intercity Rail has assembled.
Neither the politically connected Desmarais, whose company believes “decarbonization is a generational opportunity,” nor Tanenbaum would comment.
André Desmarais has been deputy chairman of Power Corp. since 2008. He was previously president and co-chief executive officer of the financial conglomerate that owns Investors Group, Great-West Life, Mackenzie, Wealthsimple and others, from 1996 until he left the job in February 2020.
Kilmer Transportation is an affiliate of Tanenbaum’s Kilmer Group. It owns stakes in conglomerate Maple Leaf Sports and Entertainment (owner of Toronto’s Raptors, Maple Leafs, Marlies, Argonauts and Toronto FC sports teams).
Tanenbaum’s Kilmer Sports also paid more than $100 million for Toronto’s new WNBA women’s professional basketball franchise.
The Liberal government has prohibited the three consortiums it picked to submit proposals from publicly discussing bids delivered to Public Services and Procurement Canada (PSPC) in late July.
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The government contends confidentiality is needed so bidders don’t try to sway public opinion in favor of their own projects amid the competitive process, Via HFR Inc. spokesman Benoit Bourdeau said.
But Global News has also discovered that in 2023, federal procurement officials planned to pay up to $20 million to each of the final three bidding groups “in consideration of the level of effort required to submit a compliant proposal” – whether they win the project or not.
A government spokesman was unable to say if the amount remains the same or has increased.
Desmarais’ DF Canada Infrastructure was born as 15832373 Canada Inc. in March, records show.
Desmarais, who lives in Westmount, was its only named director then and now. It then changed its name to DF Canada Infrastructure Group on July 11. The company’s filings reveal that André Desmarais controls more than 75 per cent of DF Canada Infrastructure shares, but doesn’t say who owns the rest.
Its links to the family’s public company, Power Corporation of Canada, if any, are unclear. Power Corp spokesman Stephane Lemay did not respond to questions.
The Liberal government’s proposed High-Frequency Rail (HFR) electric train would run on almost 1,000 kilometres of dedicated and mainly electrified tracks between Windsor, with stops in Toronto, Peterborough, Ottawa, and Laval, Montreal, Trois-Rivières, and Quebec City.
![Click to play video: 'VIA high-frequency rail project conducts community consultation in Peterborough'](https://i1.wp.com/media.globalnews.ca/videostatic/news/6cflt4bx4w-99sunmz0wt/20231121_083720.jpg?w=1040&quality=70&strip=all)
The precise route and stops remain to be finalized. Ottawa wants bidders to offer a minimum of twelve daily departures. Via has previously said the project may cost taxpayers between $6 and $12 billion.
But those estimates predate a period of fast-rising construction costs hit by inflation.
Desmarais’ DF Canada Infrastructure Group joins other Intercity group members that include: Intercity Development Partners, First Rail Holdings, a major and experienced railway operator in the United Kingdom, Hatch, Quebec engineering firm CIMA+, and Spanish and French rail operators.
First Rail says it handled 750,000 U.K. passenger journeys a day in the past year through its three train companies: Avanti West Coast, Great Western Railway, and South Western Railway. Those railways have 15,000 workers operating 3,700 locomotives and rail carriages at 404 train stations.
Intercity also includes Meridiam, a developer and alternative asset manager of transport infrastructure and public services like light rail and roads.
Meridiam has built the 19-kilometre-long, 19-stop Kitchener-Waterloo ION light rail project, which opened in 2019, and the 31-km Southwest Calgary Ring Road. It also owns a 48 per cent stake in LaGuardia Gateway Partners, which rebuilt and operates LaGuardia B Airport Terminal in New York City.
The other two final bidding groups vying for the project include:
- QConnexiON Rail Partners. Its partners include Fengate, an infrastructure asset manager that in 2019 acquired and operates the ONRoute service centers along Highway 401. Also involved are John Laing, construction giant Bechtel, engineering powerhouse WSP Canada and Deutsche Bahn, the state-owned German railway based in Berlin.
- Cadence. Its members include Atkins Realis Canada (the former SNC-Lavalin); CDPQ Infra (the infrastructure investment arm of Quebec’s Caisse de Depot pension fund), Systra Canada, and Keolis Canada. Global News reported that Cadence also added Air Canada and SNCF Voyageurs, the French TGV train operator, to its group prior to the bid deadline.
The Liberal government will pick a project co-partner by year-end or early 2025. The winning bidder will then work with the government to co-develop and finance the railway if the government gives the railway a final green light.
By improving customer service, the government hopes the project will eliminate heavy subsidies to Via Rail operations along the corridor. It also aims to cut CO2 emissions by 10 million tonnes over 30 years.
![Click to play video: 'Via Rail banks survival on high frequency rail project'](https://i1.wp.com/media.globalnews.ca/videostatic/news/ukllrj9mtd-5s84z8gdyv/via_rail.jpg?w=1040&quality=70&strip=all)
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