GTH land-sale projections continue to fall short as debt load hits $37 million
Don Morgan, the MLA tasked with overseeing the Global Transportation Hub (GTH), admits the inland facility is not “operating in a good cash flow position” and any discussions about divesting taxpayer dollars from the project are “a discussion to have, but not right now.”
The long-beleaguered GTH, located west of Regina, continues to struggle meeting its projected land sales as its debt increases.
Total debt of the project is now at $37 million. Land sales fell short of projections by $10 million this fiscal year — a scene that has become common at the facility. From the 2010-11 fiscal year to 2017-18, the GTH budgeted $96.8 million in land sales, but over that time has brought in $65.486 million (68 per cent of its budget target).
A sizable amount — $25 million — of that land-sale revenue came from SaskPower, another Crown corporation. Without that Crown contribution, the GTH has sold about 42 per cent of what it intended to over the past eight years.
Although the project had an initial investment of $13.1 million for land, it has since paid at least $11 million to disgruntled landowners in legal disputes, while continuing to rack up debt (including an outstanding loan of $24 million from the Royal Bank of Canada, for which the GTH has struggled to make principle payments since the 2014-15 fiscal year, instead spending $1 million on interest payments).
Morgan told reporters Monday it is “premature to talk about divesting” from the GTH, despite the idea being floated during the Saskatchewan Party government’s recent leadership race.
He said the province wants to see the GTH “operational and working as well as we can” and “get really aggressive with a marketing strategy.”
“We want to know (GTH board members) are doing everything they can to market the property and get the servicing done,” he said.
Cathy Sproule, the NDP critic of the GTH, said the province being unable to sell the GTH is “part of the problem” and now it is time for government to “make sure public dollars don’t keep sinking into it.”
Twelve companies are listed as current businesses with property at the GTH, but if land sales were performing as well as the province hoped, that number would be much higher.
Pressed on when the province will make a decision about the GTH, Morgan would only say “sooner the better.”
That isn’t the case for other government-owned entities. Central Services Minister Ken Cheveldayoff is looking to sell some of the 660 buildings owned by his ministry. He said a review is underway to see if those buildings are being used in the best way and, “if not, we’re open to discussions with other levels of government or the private sector.”
Although the total vacancy rate for those buildings is 3.64 per cent, he said some are as high as 70 per cent and, “those are the ones we want to take a look at and see if they can be better used by the private sector.”