A project that aims to build a rail link between Alberta and Alaska has hit a bump.
The Alaska-Alberta Railway Development Corporation has relied on one of Canada’s largest private lenders, a Toronto-based investment firm called Bridging Finance. Now, Ontario financial regulators are investigating the lender for alleged improper use of investor funds to benefit the firm itself and its chief executive, David Sharpe.
The corporation, known as A2A Rail for short, proposes to build a 1,600-mile freight rail line between Delta Junction, Alaska, and Fort McMurray, Alberta at a cost of $17 billion.
One allegation against Bridging Finance involves the founder and chairman of A2A Rail, Sean McCoshen. According to Ontario Securities Commission documents and news accounts, one of McCoshen’s companies paid $19.5 million Canadian into Sharpe’s personal bank account around the time Sharpe’s firm lent the railway project more than $100 million.
The Alaska Railroad has an agreement to work with A2A. Alaska Railroad Director of External Affairs Tim Sullivan couldn’t say whether the investigation imperils the project. Sullivan referred the question to A2A. But Sullivan said A2A seems serious about plans to build a rail link to Alaska.
“I can certainly say that these folks are closer than anybody that has ever come before them,” Sullivan said. “This has been something that the Alaska Railroad — every couple of years we have folks who show up and say ‘what you need is the railroad connecting to the Lower 48.’ We start to discuss what it’s going to cost and then we don’t hear from them again. Clearly, the folks at A2A have been around for several years now and are really, really adamant they can get this project done.”
Last year, then-President Donald Trump issued a presidential border crossing permit for the railway. U.S. Sen. Dan Sullivan listed progress on the railway as an accomplishment when he spoke to the Alaska Legislature on May 4. Gov. Mike Dunleavy mentioned it Wednesday as one of the big projects he’s excited about.
A2A emailed a statement saying it was disappointed to learn of the allegations against Bridging Finance. “The Corporation is a client of Bridging Finance, as are many others,” it said.
Meanwhile, A2A seems to be trying to distance itself from its founder and chairman. As recently as March, Sean McCoshen was at the top of the list of executives on A2A’s website. By Wednesday, he’d been removed from the “about” page for the Railway Development Corporation.