A port in a storm: politics, competing interests leave Port of Halifax future in limbo
|National Post 11 Jan 2019 at 15:31|
Last month, Canadian National Railway announced that it was bidding, alongside an unnamed partner, to buy and expand the Halterm Container Terminal in the Port of Halifax, with the aim of turning it into “the Prince Rupert of the East,” a nod to the company’s booming West Coast terminal business.
The Port of Halifax, currently Canada’s fourth largest by container traffic, is ideally positioned to do just that.
Halifax lies just off the great circle route from New York to Europe — “four hours in, four hours out” as retired Halifax Port Authority engineer Don Carter puts it — and is 635 nautical miles closer to the key shipping hub of Rotterdam than is its competitor. It is also in deep enough water to accommodate the world’s largest container ships.
But despite the CN bid, Halifax’s chances of becoming a bigger player in North America’s rapidly changing East Coast container business are not at all assured these days.
Other Atlantic ports have spent a fortune on upgrades — including US$1.6 billion to raise a bridge in New York to create clearance for the largest ships — while Halterm’s future has remained in limbo, largely due to politics and competing interests.
Located in the south end of the city at the harbour entrance, the terminal can currently handle only one ship at a time and needs a second berth to be competitive. It must also expand its terminal capacity to handle more containers.
The need for more capacity is something the Halifax Port Authority is well aware of, having warned on its on website that without berths for two ultra-large ships, the port could eventually lose a significant share of its business.
But a Halifax Master Plan commissioned by the Port Authority two years ago, which was meant to chart a course for the port’s future, has never been released.
The port also came out on the short end of a recent round of funding from the federal government’s National Trade Corridors Fund, which provides up to half the cost of projects deemed worthy. Although every major Canadian port received money from the fund, a Halifax Port Authority application for a $275-million Halterm expansion was rejected.
“This (funding) is based on merit. Where are the most urgent bottlenecks,” Transportation Minister Marc Garneau said recently, referring any questions about the reasons for the rejection to the Port Authority itself.
Shipping containers in the Fairvew Cove Container Terminal in Halifax. Canadian Press file photo
The failure to embrace an expansion at Halterm is curious, given the significant role container shipping plays in the economies of Halifax and Nova Scotia. The port accounts for more than 12,000 jobs and drives $3.6 billion of economic output in the province.
One politician who been cool on expansion plans has been Scott Brison, the Liberal MP and political minister for Nova Scotia who resigned from his cabinet post as treasury board chairman in a surprise announcement Thursday.
Late last year, Brison said he didn’t see an immediate need to double Halterm’s capacity to vie for a bigger share of the container pie.
“There should be a business case and a thorough analysis of all the options for a Nova Scotia gateway,” Brison said.
Brison said he favoured a proposal for a temporary $35-million berth extension at Halterm, currently in progress, which could last up to 10 years to allow for a “more thorough analysis,” which might ultimately suggest other uses for Halterm.
“Part of that consideration would be what that land could be used for, and the value of that activity,” he said. The MP didn’t elaborate on what those other uses might be.
Brison is not the only politician who has taken a cautious approach to any potential expansion of the Port of Halifax.
The Halterm terminal in Halifax. file photo
Some of the opposition to a Halterm expansion can be chalked up to increasing frictions with stakeholders in the city’s downtown.
During Halterm’s nearly 50 years of operations, the city centre has undergone dramatic change, with high-end condos and apartments going up along the route used by trucks to access the port.
Three years ago, Halifax even commissioned a study to see how port truck traffic could be eliminated, though none of the recommended solutions has been carried out.
CN’s Ruest is adamant this is a non-issue, because a Halterm extension would be “really generating a lot more rail, not more trucks.”
Among the solutions that he has proposed to deal with local truck traffic is one that was previously raised in a consultant’s report commissioned by the city: Have a shuttle train move the local container traffic through an existing rail corridor.
CN’s route from Halterm to the rest of the country runs through a 10- to 25-metre-high canyon known as the rail cut. It links with Halifax’s other container terminal, Ceres, in the city’s north end.
Despite studies showing that trucks and trains could share the cut, one concluded in 2009 that there was no political will to make it happen.
However, traffic is not the only issue.
In addition to the possibility of expanding Halterm, two other locations — Sydney in Cape Breton and Melford, at the Canso Strait, about 300 kilometres north of Halifax — have also been proposed as locations for container terminals.
Responding by email to a series of questions, both Brison and Fillmore stressed the importance of Nova Scotia’s role as “a port of call” and “East Coast gateway,” wording that doesn’t rule out the two other communities that want in on the action, though neither has a container terminal nor a functional rail link.
Sydney’s harbour is plagued by winter ice and is hundreds of kilometres from the four-lane Trans-Canada Highway. What rail does connect Sydney is dilapidated and has fallen into disuse. The only reason any tracks remain is because the Nova Scotia government has been paying the owner, Genesee & Wyoming Railway Inc., $60,000 a month not to rip them up.
Then there is Melford International Terminal Inc. at the Strait of Canso. Former Nova Scotia Liberal transportation minister Richie Mann, now a company vice-president, has championed the plan for more than a decade.
With neither rail nor four-lane highway access, Melford Terminals proposes building a 30-kilometre rail link to the Cape Breton and Eastern Nova Scotia Railway not far from the Trans-Canada Highway.
As for Halterm and the Port of Halifax, it appears as though governments are either ignoring paid expert advice or shopping for more satisfactory recommendations.
The Atlantic Canada Opportunities Agency paid for two studies by the provincial Transportation Department commissioned 18 months apart from CPCS Transcom Ltd. on Nova Scotia port competitiveness.
In interviews, both Brison and Fillmore cited the CPCS study released in March 2018 that called for new terminal development to be driven by the private sector.
In contrast, the earlier CPCS study completed in September 2016 recommended “that public policies, plans and investments prioritize improvements that support the competitiveness of the Port of Halifax as Nova Scotia’s and Atlantic Canada’s primary marine gateway for containerized trade.”
Meanwhile, the Halifax Master Plan commissioned by the Port Authority and initially scheduled for release in January 2017, remains secret.
On Oct. 23, the port authority’s seven-member board of directors — five of whom are Brison appointees — met.
On Oct. 23, the port authority’s seven-member board of directors … voted to release the report. Two days later they revoked their earlier decision.
Asked if any Brison-appointed directors had spoken to the then federal treasury minister between votes, board chairman Hector Jacques replied, “I am not going to address your question.” In response to the same question, Brison said, “No, I have no recollection of that.”
All this is taking place as competitors seize the opportunities triggered by Panama and Suez Canal expansions that allow giant container ships of 14,000 TEUs (twenty-foot equivalent units), were once restricted to the Pacific Ocean, to call on North America’s East Coast.
For CN, which has the lone rail line leading into Halifax, staking a claim to that business before it’s too late is paramount. Ruest said Halifax will need two berths capable of handling ultra-large ships simultaneously, and expansions to accommodate longer trains.
“The time for studying and thinking and haggling is no more,” Ruest said in an interview shortly before CN revealed its bid. “We need to act in 2019.… It’s up to us to get behind those projects, which are real enough.”
A source close to Macquarie Infrastructure and Real Assets, which currently operates Halterm, said a deal to purchase the container terminal could close as soon as this month.
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