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World Fuel doubts Quebec rail-crash payment order is legal

A worker walks near the railway track on the site of the train wreck in Lac Megantic, July 16, 2013. REUTERS/Ryan Remiorz/Pool
A worker walks near the railway track on the site of the train wreck in Lac Megantic, July 16, 2013. REUTERS/Ryan Remiorz/Pool

(Reuters) - U.S. fuel logistics company World Fuel Services Corp said on Tuesday it has "serious objections" to being ordered by the Quebec government to help pay for the cleanup of the devastating railway crash in Lac-Megantic, Quebec, on July 6.

The provincial government of Quebec signed a legal order on Monday obliging the U.S. operator of the train, Montreal, Maine and Atlantic (MMA) Railway, and World Fuel Services, whose subsidiary sold the light crude oil carried by the train's tanker cars, to foot the bill.

The crash, North America's worst railway disaster in two decades, killed 47 people and destroyed the center of the small lakeside town of Lac Megantic.

"World Fuel Services will continue to meet any and all obligations it may have with respect to the accident; however, we have serious objections to the legality of the order," the company said in a statement.

"We intend to promptly discuss these issues with the relevant authorities."

The tanker train had been parked for the night when it broke loose and sped away, driverless. It derailed and crashed in the Lac Megantic, where it exploded into a fire ball.

World Fuel Services said it was surprised by the government action as it was the first time the government had said the company bore any responsibility.

Cleanup crews have begun to recover an estimated 5.7 million liters (1.5 million U.S. gallons) of oil from the nearby lake, river and ground. Quebec Environment Minister Yves-Francois Blanchet promised on Monday that taxpayers would not have to pay for it.

Lac-Megantic Mayor Colette Roy-Laroche complained on Tuesday that MMA had not paid the companies MMA hired to help clean up after the calamity. She told a news conference the town has so far paid about C$7.8 million ($7.57 million) for the work and that it has given notice to MMA for a second time that it needs to be reimbursed.

Although World Fuel Services has sent its own experts to monitor the cleanup of oil from the disaster site, it said that work is being controlled by MMA and local authorities, who have given it limited access.

MMA has not yet commented publicly on the government order, but was also expected to respond formally on Tuesday.

MMA laid off at least five more workers in Quebec on Tuesday, on top of 19 who were dismissed earlier this month because of reduced activity since the accident, according to Radio-Canada.

($1=$1.03 Canadian)

(Reporting by Louise Egan; Editing by Peter Galloway)

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