A group of northern Manitoba First Nations and Fairfax Financial Holdings have reached a deal to purchase and restore the Churchill rail line, a year after it was washed out by floodwaters.

The rail line is Churchill’s only land link to the south.

The agreement in principle transfers ownership of the rail line from OmniTRAX Inc. to Missinippi Rail Partners and Fairfax Financial Holdings.

Located on the shores of Hudson Bay, Churchill is an isolated northern community of about 900 people. The Manitoba town has long been a popular tourism destination for viewing polar bears, beluga whales and the northern lights.

But the loss of Churchill’s rail link to Winnipeg last spring dramatically drove up prices on everything from building supplies to food. Â鶹´«Ã½ reported in February that a four-litre jug of milk cost about $14.

Denver-based OmniTRAX said it couldn’t afford to fix the rail line, estimating that repairs would cost $43 million.