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“We knew this was something the private sector would be willing to do and should be doing at its risk, not at the expense of taxpayers,” Kenney said Tuesday, adding the final cost of divesting the province of the contracts came in at $1.3 billion, $200 million less than the $1.5-billion provision the UCP budgeted for in October.

“We have been working with the private sector to sell those contracts and I’m pleased to announce that we have done so under very successful terms.”

In total, 19 contracts for rail cars, loading and unloading capacity, logistics and other services are being transferred to private companies. Kenney said no additional details will be made public at this point, citing confidentiality reasons.

Photo by Darren Makowichuk / DARREN MAKOWICHUK/Postmedia

In announcing its initial plan, the NDP had projected the government crude-by-rail program would cost $3.7 billion over three years (plus $6.7 billion for the cost of purchasing the crude, for a total of $10.6 billion). Kenney, who has long said the program was destined to be a money-losing project, said Tuesday the program would never have earned the $8.8 billion in incremental revenues he says the NDP expected it to make. He said that getting out of the contracts will save Alberta taxpayers half a billion dollars.

Last fall, the UCP government announced that oil producers who agree to ship additional barrels by rail would be allowed to increase their output levels above the current quotas in place under Alberta’s existing curtailment program. Those special production allowances — combined with the additional capacity represented by the rail contracts — means the industry could be shipping more than 500,000 barrels per day in the near future, said Ben Brunnen, vice-president with the Canadian Association of Petroleum Producers.