Revenue down at GTH as sales lower than expected

The Global Transportation Hub (GTH) continues to struggle to meet its land-sale targets as the controversial Crown property also struggles to meet its debt obligations.

From the 2010-11 fiscal year to 2016-17, the GTH has budgeted $84.3 million in land sales.

But it has actually only sold $62.986 million worth of land — or 75 per cent of what it planned to.

A significant chunk — $25 million — of the land-sale revenue is attributed to SaskPower, another Crown corporation.

Without that $25-million land purchase from SaskPower, the GTH has sold 45 per cent of what it has projected.

The NDP’s Cathy Sproule was critical of the GTH’s budgeting at a late Tuesday afternoon committee meeting to review the annual report of the hub.

She asked GTH CEO Brian Richards why it was budgeting for “extravagant land sales” and “never delivering on them.”

Richards said budgeting is based on “the average and the history” and they consider “prospects in our funnel” when projecting land sales.

“It’s something we have to reassess and reforecast on an ongoing basis,” he said.

Since the 2015-16 fiscal year, $6.2 million has been generated from land sales.

For the current fiscal year the GTH is projecting $10 million in land sales — the lowest projection in its history.

Land sales are one of only two revenue sources the GTH has. It is able to generate revenue by charging property taxes to the tenants at the inland port. That stream of funding brought in less than $2 million to the GTH in the last fiscal year from its 12 tenants.

But so far those revenue sources have not been enough for the GTH to pay back its sizable debt. Its line of credit debt has grown from a little under $3 million to $7 million in a year.

More telling, though, is the GTH’s outstanding loan from the Royal Bank of Canada. A payment on the $24-million debt has not been made since the 2014-15 fiscal year. Instead, over $1 million in interest payments have been made.

Richards told the committee if land sales and property taxes don’t cover the GTH operations, then it would continue to finance debt or reduce expenses.

Meanwhile, the overall cost of establishing the GTH has nearly doubled as a result of legal settlements over the land being used for it.

There was an initial investment of $13.1 million for GTH land, but $11 million has been added to that as the result of legal disputes with disgruntled land owners.

Richards said in his opening remarks the GTH has the opportunity to be a “major player” and noted it is the “only autonomous and self-governing authority” in Canada.

The 2016-17 annual report from the GTH was prepared at a time when Meadow Lake MLA Jeremy Harrison was still the minister responsible for it.

He resigned from that position to run for the soon-to-be vacant position of leader of the Saskatchewan Party and, by extension, premier.

Although Harrison dropped out of the race shortly after entering it, he did come out with a policy related to the GTH: that the province should divest from it.