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Train in Canadian derailment headed by Chicago rail veteran

Smoke rises after a train explosion in the town Lac Megantic July 6, 2013. REUTERS/Mathieu Belanger (CANADA - Tags: DISASTER ENERGY)
Smoke rises after a train explosion in the town Lac Megantic July 6, 2013. REUTERS/Mathieu Belanger (CANADA - Tags: DISASTER ENERGY)

By P.J. Huffstutter and Scott Haggett

(Reuters) - The railroad whose train of tanker cars derailed and burst into an oil-fueled fire in a Canadian town on Saturday is headed by a Chicago-area railroad veteran whose career included work with railways in Australia, New Zealand, Britain, Estonia and Poland.

Edward A. Burkhardt's Rail World Inc is a privately held rail management and investment firm based outside Chicago. The little-known Rosemont, Illinois, company also has current ties to freight railways in Poland.

It controls the Montreal, Maine & Atlantic Railway whose train carrying crude oil fell off the rails in Lac-Megantic, a picturesque lakeside town in Quebec, killing at least one person and leveling dozens of buildings. The railroad said it had had reports of more deaths, and Canadian officials also said they feared the death toll would go higher.

Burkhardt is president of Rail World and chairman of the Montreal, Maine & Atlantic Railway.

In an interview with Reuters in his office near Chicago's O'Hare airport, Burkhardt said the railway had had minor derailments, but no fatalities. "In the 10 years or so we've been in business, this is the only serious derailment we've had," he said.

He said he expected claims would "be a lot of money," butthe company and its insurer could handle it financially.

Burkhardt, whose office is filled with model train cars and other rail memorabilia, said the railroad had had "a tough few years" during the 2007-2008 recession when demand fell for its usual cargo of paper and forest products.

The increased demand to carry oil from western Canada and North Dakota, had helped. "The business had been getting a bit better," Burkhardt said.

He was named Railroader of the Year by Railway Age magazine in 1999, based on his successes at Wisconsin Central, a 2,000-mile (3,220-km) midwestern rail line in the 1980s after Washington began deregulating the U.S. railroad industry.

Burkhardt's privatization approach spread to deals with investment firms to pick up government-run railroads in New Zealand, the United Kingdom and Australia, according to media reports at the time. The deal in New Zealand later led to Burkhardt being named the honorary consul for that country in the Midwest, a role he continues to hold today.

But as profits from the overseas ventures cooled and the company's once-soaring share price slumped, Burkhardt was later ousted from Wisconsin Central's chief executive spot.

His Rail World purchased the assets of what became the Montreal, Maine & Atlantic Railway out of bankruptcy in 2003.

The regional rail company has 510 route miles of track in Maine, Vermont and Quebec, and employs about 170 people, according to the company's website. It runs about 15 trains daily, and has a fleet of 26 locomotives.

The railway has had eight incidents of hazardous material spills reported since February 2005, including instances of spilled diesel, gas oil, sulfur and other materials, according to data compiled by the U.S. Pipeline and Hazardous Materials Safety Administration.

The largest of those incidents was an approximately 100-gallon spill of gas oil from a tanker near Easton, Maine, about 155 miles north of Bangor, in April 2011, the agency said. None of these incidents involved people being injured, according to media reports.

The railway's roots date back to 1864, when a group of businessmen acquired a charter from the state of Maine to build a railroad between Bangor and Moosehead Lake, according to the company's website.

(Reporting by P.J. Huffstutter and Scott Haggett; editing by Jackie Frank)

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