CN makes an offer for biggest shipping terminal in Eastern Canada

Canadian National Railway Co. has put in a preliminary offer to buy the largest shipping terminal in Eastern Canada, in a bid to capture some of New York’s container business.

In an interview on Wednesday, chief executive Jean-Jacques Ruest said the ambition with the potential acquisition of the 30-hectare Halterm Container Terminal is to create a “Prince Rupert of the East.”

Halifax is the fourth busiest port behind Vancouver, Montreal and Prince Rupert, B.C. CN provides the transcontinental rail service for the Fairview Container Terminal in Prince Rupert.

Ruest said CN has a partner in its bid for the Halterm terminal, but didn’t disclose who.

The railway was once a part owner of the facility, back when the company was a Crown corporation.

Halterm was sold to Australia’s Macquarie Infrastructure and Real Assets, which bought the terminal in 2007 for $173 million. CN provides the rail out of Halifax.

Stevedores union ILA local 269 president Kevin Piper welcomed the CN bid and said, ” we look forward to working with CN and its strategic partner and duplicating the success CN has had in Prince Rupert.”

Ruest said if CN is successful in its bid, it will make changes to the business model of the Halterm container and rail operation. “We’re interested to get behind a terminal to make them ready for bigger things and run them in a way they have not been run in the past,” he said.

CN wants to expand the terminal capacity to be able to service two large ships and to handle trains with a minimum length of 3,700 metres, Ruest said. Currently Halterm can handle the largest container ships, but only service one at a time.

The Halifax Port Authority (HPA) recently awarded a contract to begin construction of a temporary berth extension at Halterm that will allow for two large ships to tie up at the same time. The wharf extension is scheduled to be complete by 2020. However, the terminal is not big enough to assemble the very long double-stack trains.

The HPA has proposed expanding Halterm by incorporating adjacent port lands and some of the adjoining CN Rail yards, but there isn’t yet a plan to proceed.

“We’re willing to put in some of our rail infrastructure to create a solution for the big trains,” Ruest said.

Should CN and its partner be successful in buying Halterm, it is unclear how an expansion would be funded. Transport Canada recently rejected the HPA’s request for $225 million for the estimated $550-million dollar Halterm expansion.

Ruest said there are two other ports the railway is looking at as well, one in Nova Scotia and one on the St. Lawrence River. Although he declined to specify which facilities, the most likely candidates are Melford in Nova Scotia, which would be a greenfield development, and Quebec City.

“CN is action-oriented on this file,” Ruest said. “We need to act in 2019.”