OTTAWA -- A union-led effort to take over Canadian National Railway Co.'s under-used Prairie grain lines is attracting interest from Canadian Pacific Railway Co., the National Post reports.

Gary Housch, vice-president of the Brotherhood of Maintenance of Way Employees, said the union has approached CPR about operating some of its grain lines through a Prairie co-operative similar to that being negotiated with CN.

Ian La Couvee, a spokesman for CPR, which is looking to shed up to 3,200 kilometres of Prairie lines, said more talks are planned.

"We've made no commitment except to say that we'll take their proposal into consideration," he said.

The issue of grain shipment is controversial. Ottawa's policy of withdrawing subsidies to make the system market-driven has put farmers, railways and grain companies into conflict.

CN and CPR want to abandon Prairie branch lines that are too expensive to operate, possibly condemning many small communities. The union believes it can save these towns and provide cheaper transport for farmers.

The union is organizing support through a grassroots group called The Prairie Alliance for the Future. It wants to establish a co-operative that would take over about 1,600 kilometres of CN's secondary grain lines, mostly in Saskatchewan.

"We're creating a new type of business enterprise. It doesn't follow the traditional model, it's going to borrow from European experiences with worker control and into that mix will be coming the communities and the farmers," said Darrell Richards, a consultant with Agritrade and Transport who is advising the union.

The group has held a series of town-hall meetings. Response from farmers and community groups has been sufficiently strong to move to more formal negotiations with CN, said Mr. Housch.

"We're focusing on grassroots support, we're not trying to get institutional support," he said.

A business plan is under development with the aid of academics from the University of Saskatchewan. The system could involve a mix of the co-op's own equipment augmented by CN equipment under contract, said Mr. Housch.

Mr. Housch said the plan should not result in layoffs.