Melford deal in place
SSA Marine hadn’t looked at Sydney proposal since 2007-08
After almost a decade in development, a proposed container terminal in Melford now has an operator onboard and will proceed to the next stage of attempting to lure shipping lines.
SSA Marine, Melford International Terminal and Cyrus Capital Partners announced the collaboration and joint investment in the Melford International Terminal earlier this week.
“This is a huge company, they’ve been in operation for close to 70 years, they’re the largest container terminal operator in North America and the largest independent terminal operator in the world,” Richie Mann, vice-president of marketing for the Melford project, said in an interview.
“They’ve written a cheque, become part of our project and they’ll stand shoulder-to-shoulder with us now in finding customers … If these guys can’t get this done, I’m not sure it can be done.”
Mann wouldn’t disclose the terms of the financial arrangement with SSA, noting it’s a fully private development, although it includes an option to expand its stake going forward.
Melford’s involvement with SSA stretches back to the early days of the development, close to a decade ago, although no agreements were signed at that time. When the recession hit, SSA pulled back and focused on its main businesses, Mann said, although they maintained a friendly relationship over the years.
SSA has been performing due diligence on the Melford proposal for about a year and has met with senior provincial cabinet ministers, representatives of First Nations and local industrial and municipal officials, he added.
SSA Conventional president Mark Knudsen said in a phone interview Friday, from his base in Seattle, that when the company first considered Melford in 2007-08 it had also looked at the proposed port development in Sydney but determined that Melford had better potential. That predated the dredging of the harbour and did not involve the current group working on port development in Sydney.
“We’ve kind of followed (Melford) from its inception, really,” Knudsen said. “We haven’t really been back to approach the new people at Sydney.”
When they liked about Melford was the ability to create a purpose-designed cost-efficient terminal for intermodal transport into the midwest and eastern Canadian market. Its deep water and good base of skilled workers and existing tug and pilot network were also attractive, Knudsen said.
With the 315-acre container terminal — 220 acres in phase one — the first 250 acres of the logistics park and the rail spur line that will have to be constructed, the project cost is currently estimated at $450 million Canadian, or $350 million American.
Mann said more than $40 million has been spent on the project to date.
Mann couldn’t say what this latest agreement could mean in terms of impact on the actual construction timeline of the terminal and logistics park.
“That will be a function of how successful we are at attracting carriers,” Mann said.
The release announcing the joint venture noted the Strait of Canso terminal would become the closest North American port on the Great Circle route to Europe and Asia via the Suez Canal.
The fully permitted terminal is designed to accommodate ultra-large container vessels for both transshipment throughout the east coast of North American as well as intermodal service to eastern Canada and U.S. markets through a connection to the CN rail system.
Mann noted SSA already has about 16 container terminals in a dozen different countries and wanted to expand its presence in the northeast.
“They develop terminals in addition to simply operating them,” Mann said. “They’ve got relationships and contracts and joint ventures with all 20 of the largest carriers in the world.”
Mann said he doesn’t know how the Melford agreement may affect the proposed Sydney development, saying he didn’t know many of the details of what work may have been done there.
Albert Barbusci, CEO of Harbor Port Development Partners, which is working to market the port of Sydney as home to a similar development, said in a phone interview Friday that the team hadn’t spoken with SSA Marine about the Sydney project.
“I compliment Richie Mann and the crew for staying the course and not giving up,” he said. “I don’t know what it means, but I certainly read it and I clearly understand that there’s another horse in the race.
“We know of (SSA Marine), we know that they’re a good solid firm, but we’ve had no relationship, no contact with them in the past.”
Much like Mann, Barbusci said he doesn’t know enough about the other Nova Scotian proposal to comment on it in comparison to Sydney’s.
“We have our own issues and we have our own concern at the Sydney harbour,” Barbusci said.