Ports and public cash
Let private firms shoulder risk in choosing ports to expand in Nova Scotia: study
A new study cautions governments against putting public cash into new port infrastructure in Nova Scotia, and suggests private investors should choose who wins the battle for East Coast container traffic.
The document, paid for by the Atlantic Canada Opportunities Agency and the province’s Transportation Department, examines the prospects of the Port of Halifax and proposed container port facilities in the Strait of Canso and in Sydney.
It says private-sector stakeholders should determine which projects go forward.
“A large investment in infrastructure, such as the construction of a new terminal, is risky and should be driven by private sector stakeholders that understand the business and are prepared to take on most of the risk,’’ says the document, dated March 23 of this year.
Former prime minister Jean Chretien — who has been an adviser to Sydney Harbour Investment Partners — told reporters on March 20 that he hoped the Nova Scotia government would support the Novaporte proposal in Sydney, though he didn’t provide specifics on what assistance is needed.
There’s been no commitment from either the province or the federal government on the various proposals.
The former Liberal leader did not respond to emails seeking comment on the report.
The report by CPCS consultants continues to highlight challenges, raised in a previous report published in 2016, faced by the Novaporte development at the Port of Sydney, including the lack of railway access and the possibility of ice in the harbour.
“Halifax is a better geographical location,’’ it says at the beginning of a chapter comparing the merits of the existing port and the two proposed container terminals.
In its conclusion section, the report says governments can best support the growth in container traffic by, “supporting incremental improvements to existing facilities (Halifax) so that a Nova Scotia port call continues to be a viable option for shipping lines.’’
Regarding new proposals, it concludes government should support “more major projects only when the lion’s share of risk is taken by the private sector.’’
However, the 48-page document obtained by The Canadian Press also notes both the Sydney site and the Melford proposal in the Canso Strait could handle large vessels for which Halifax may not have the capacity.
“One of the significant advantages of the proposed ? projects of Melford and Novaporte is that they could be designed for the ultra-large ships,’’ says the report.
The report describes a rising flow of container traffic coming through the Suez Canal towards North America’s eastern seaboard, and the past two years have seen improvements in the volume of cargo.
“Increased use of the Suez for South East Asian and Indian cargoes to and from North America will offer a real opportunity for Nova Scotia as its ports are first-in, last-out on this routing,’’ it says.
It says the new proposals in Melford and Sydney have some “significant advantages,’’ such as reduced handling costs due to using new technologies, while Halifax’s costs are simply “in line with industry standards.’’
Jean-Paul Rodrigue, a professor of geography at New York’s Hofstra University in Long Island, said in an interview that after reviewing the report he sees a message of caution to governments.
Rodrigue, who consults on transportation issues, said “the only way this is going to work out is if there’s some private money to put some stakes in this game.’’
He also said he remains “a little bit skeptical’’ about the viability of a second Nova Scotia container port, due to the lack of a large local market in Atlantic Canada.
The veteran observer of the marine industry said it may be likelier that Quebec City will develop a container port first, to accompany the plans to expand port facilities in Montreal.
“It’s not just a Nova Scotia issue, it’s an eastern Canada issue. You have to consider it in the context of the entire Canadian eastern seaboard,’’ he said.
Still, Rodrigue said it remains difficult to tell which of the various East Coast Canadian port options will prove viable, until a private company says it’s willing to take on a project.
“The federal government is waiting to see what the private sector is saying, and at this point the private sector is very uncommitted,’’ he said.