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Port of Vancouver
rejects feasibility of
proposed port privatizations

2017-06-28

McKeil Marine's Evans Spirit  won the International Bulk Journal's 2016 Ship of the Year Award during the IBJ's Salute to Excellence in the Maritime Bulk Industry gala awards ceremony in London, UK on November 21.
"It's a fantastic way to closeout our 60th anniversary year: having a vessel named after our founder, Evans McKeil, win this prestigious international award," said Steve Fletcher, President and CEO of McKeil Marine.
Acquired by McKeil in 2015, the Evans Spirit is a cargo ship with the shallow draught characters of a tug and barge; however, compared to a tug-and-barge unit, she can transport approximately 40 per cent more cargo about 50 per cent faster on a very similar amount of fuel.  She is in service throughout the Great Lakes and St. Lawrence River.
Evans Spirit was shortlisted for 2016 Ship of the Year competing with three other vessels: CS Bright, Mitsui OSK Lines, Japan;  Damen Shipyards, Netherlands; and MN Baroque, Swiss Marine, Switzerland. The award is presented to the owner, operator or builder of an outstanding individual bulk ship. Judged on operational efficiency, design innovation, safety and environmental protection, the Evans Spirit was selected as winner. (Photo Paul Beesley).

Canada's biggest port strongly rejects the conclusions of a think tank report recommending that Canada's four leading ports should be privatized so that several billion dollars in additional funding could be allocated to such national infrastructure priorities as public transit and new highways.

"From our perspective, the governance model that we currently have in place works very well to allow us to deliver effectively on our mandate, which is to enable Canada's trade and to do so considering the concerns of the community and protecting the environment," said a spokesperson for the Vancouver Fraser Port Authority who said its viewpoint has been transmitted to the federal government.

"Nearly 90 per cent of our earnings beyond operating costs are reinvested in port infrastructure, and collaboration with local, provincial and federal governments continues to result in gateway development that is envied worldwide," the spokesperson told Maritime Magazine.

Continuing, the Vancouver port spokesperson said: "A private investor would require a return on that investment that would have to come from current infrastructure funding and/or higher rents and fees for port tenants and users. This would have a serious impact on the long-term competitiveness of the gateway."

According to the C.D. Howe Institute, the ports of Vancouver, Montreal, Prince Rupert and Halifax represent a potential cash boon of up to C$3.4 billion to the federal government under a proposed restructuring of the governance model  in place for 18 Canada Port Authorities (CPAs).  These CPAs act as landlords, managing safety and navigation services, permits, and leases for different terminal operators.

The report contends that "due to the competitive landscape facing ports, port users are unlikely to see significant changes in pricing and customer experience if the federal government chooses to involve private capital."

The report's author, Steven Robins, argues the federal government should, in fact, "restrict CPAs from investing risk capital and instead rely on private capital to finance expansion, and harvest some of the value of its equity stake in other priorities."

The report at one point urges the federal government "to cast a critical eye" on the planned C$2 billion Terminal 2 container cargo expansion at Roberts Bank in the Port of Vancouver aimed at meeting future demand in Asian trade.

A controversy has been swirling in Canadian port circles since last November when Morgan Stanley was asked by the federal government to provide financial advice on its port holdings which have been operating since 1998 as financially self-sufficient entities at arm's length from the government. Morgan Stanley's asset-recycling proposal appeared inspired by recent developments in Australia. The Ottawa authorities have not yet taken any final decisions on "tweaking" or overhauling the existing governance model

"Of course, privatization can result in more efficient operations," observed the Vancouver port spokesperson who also stressed: "However, Canada Port Authorities are already corporately structured and operate in a quasi-commercial manner, mostly independent of government. Moreover, terminal operators and tenants at the Port of Vancouver are already private sector entities. Therefore, those benefits of privatization would not likely be realized here." (photo Port of Vancouver)

 
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