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Canada's big railways review safety rules after train disaster

By Solarina Ho and Julie Gordon

(Reuters) - Canada's two big railroads are reviewing safety standards after the deadly train crash on July 6 that killed some 50 people and destroyed the center of a small Quebec town.

Canadian Pacific Railway Ltd, Canada's No. 2 operator, said on Thursday it has already made some changes to its operating rules. It will no longer park unattended trains hauling hazardous materials on main lines, and is bringing in tougher rules on setting the brakes that hold a stationary train in place.

The runaway train that smashed into the town of Lac-Megantic, Quebec, had been parked on a main line after the engineer, its only crew member, finished his shift.

The train, operated by the Montreal Maine & Atlantic Railway (MMA), rolled down the track, gained speed, and derailed in the center of the lakeside town, with some of the 72 oil tanker cars it was hauling exploding into a wall of fire.

Investigators say the way in which the train's crucial hand brakes were set is one focus of their probe.

"The recent situation gave us a chance to thoroughly review our safety procedures, as we do on an ongoing basis," CP Rail spokesman Ed Greenberg said in a statement.

"We have now strengthened our operating procedures in some key areas that were identified from what recently occurred."

Canadian National Railway Co, the country's biggest railroad, has also started reviewing its policy for securing trains to strengthen its safety protocols, spokesman Mark Hallman said. It expects to complete the review shortly.

CLASS ACTION

The use of the hand brakes when the engineer parked his train for the night a few miles outside Lac-Megantic is also a crucial point in a class action suit being pursued by residents of the town of about 6,000 people.

The crash was North America's deadliest rail accident in more than 20 years.

The suit's preliminary document, filed in a Quebec court earlier this week, alleges that MMA and its affiliates cut costs to the point where safety was compromised, including replacing two-men crews with a single train operator, cutting wages and not ensuring company policy and regulations were followed.

The suit was updated late on Wednesday to also name Irving Oil Ltd, whose Saint John, New Brunswick, refinery was the destination of the crude oil shipment, and World Fuel Services Inc, which supplied the crude. It alleges the two companies failed to take appropriate measures to ensure that the crude oil was properly and safely transported.

Neither company responded to requests to comment, and MMA has also not commented on the suit.

"It was a highly flammable type of oil," said Jeff Orenstein of Consumer Law Group, one of the firms behind the class action suit. "They did not arrange for proper transport of the oil knowing the containers were insufficient for the purposes of this flammable oil."

The case, No.450-06-000001-135, was filed in the District of Saint-François in Sherbrooke, to the east of Montreal, because the courthouse in Lac-Megantic is in an off-limits zone where investigators are still searching for bodies and evidence.

"We couldn't get into the building, so we filed in Sherbrooke," said Orenstein, adding the legal team will request a transfer as soon as the Lac-Megantic court reopens.

Separately, Canada's Transportation Safety Board said two wheels of a freight car operated by MMA came off the rails on Thursday near Farnham, east of Montreal.

No one was injured and no cargo spilled from the train, which was not on the main track, a safety board spokesman said.

(Additional reporting by David Ljunggren in Ottawa; Editing by Janet Guttsman; and Peter Galloway)

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