Fighting for new Nova Scotia terminal

Two groups at impasse to build desirable site
It’s a race between ports on either side of Cape Breton.
Two groups are pushing to build container terminals, one in Sydney and one on the Strait of Canso. Both are waiting only for a shipping carrier to jump into the deal before shovels hit the ground.
“We have environmental approvals in hand. The engineering is completed,” Richie Mann, vice-president of marketing for Melford International Terminal, told the Port Hawkesbury Chamber of Commerce April 28 about the proposed dock and freight-handling terminal his company plans for the mainland side of the Strait of Canso.
“(But) our carrier discussions are ongoing,” Mann said.
“That’s the key. We’ve always said we need a carrier commitment in order to build this, and we need that commitment for seven or eight years — for them to commit to how many containers they will put through.
“We have spent just north of $45 million on this project. Every penny has been from the private sector.”
Cyrus Capital Partners, a hedge fund out of New York that manages more than $5 billion in investor funds, is backing the Melford project.
“Cyrus Capital continues to be very supportive, very optimistic and very aggressive in pushing the project forward,” Mann said.
“We have a lot of interest in this,” Mann said. “It’s taken a lot of time. Far too much, as far as I’m concerned, but some of these things are a bit beyond our control. They’re controlled by global economic conditions.
“I can’t tell you it will be 30 days, but I can tell you we’re getting pretty close to that.”
The Sydney project, in contrast, is being championed by the municipal government, which has hired private promoters to search out partners for a container terminal on its deep-water harbour. But there, too, the environmental hurdles have been cleared. Like Melford, the Sydney project has ardent First Nations approval. And both projects hope to capitalize on enthusiastic local support.
“When we’ve brought potential partners in, we’ve taken them not just to the site to see what’s going on and given them an air tour,” Mann said. “We’ve also taken them to Port Hawkesbury Paper. We’ve taken them to (petroleum shipping and storage) NuStar Terminals. We’ve taken them to the Nova Scotia Community College, where they could hear first-hand about the services, the type of employees, and the cost structure of operating in the Strait of Canso.
“The support we’ve received and the partnerships from the locals has been tremendous. The rail company, Genesee and Wyoming, has been phenomenal to deal with.”
Both projects have operating agreements on standby with freight operators. In Sydney, that is Ports America, which unloads cargo in more than 42 ports and 80 locations.
For Melford, it is Carrix Inc., which Mann described as “a world-class company.”
“They have been around since 1949 and have 17,000 employees in 240 operations around the world, including 17 container terminals in 12 countries. They move every commodity there is to move: cars, containers, bulk — everything except liquid petroleum.”
The Melford terminal will sit on an ice-free harbour with 60 feet of draft at the dock, 100 feet of depth in the channel, and no air draft restrictions (overhead bridges), Mann pointed out.
“The physical attributes make it an ideal site for handling containers in North America.”
Both projects depend on railways to connect them to the rest of North America. In Sydney’s case, the idled Genesee and Wyoming Inc. railbed has fallen into disrepair, including sections that were heavily damaged during October 2016 flooding.
Mayor Cecil Clarke said last summer that he had been assured G&W will repair the line if a terminal is built on his side of the island.
In Melford’s case, the developers will have to build 32 kilometres of railbed to connect to the G&W short line from Truro.
Both projects have access to huge, undeveloped greenfield sites set aside by government for industrial development.
For Melford, that is a 250-acre logistics park, consolidated from private and provincially-owned land that the developers have purchased.
“We have an additional 1,250 acres under option from the province,” Mann said. “We pay an option fee each year to protect that, so we have 1,500 acres of logistic space available to us.”
“The cost of our terminal will be about US$350 million,” Mann said. “Maybe a little less than that now, because of the value of the U.S. dollar.”
Sydney’s cost is expected to top $1 billion.
Phase One in Melford is intended to be two berths with 18,000 feet of on-dock rail.
“We’re located within the 15,000-acre Melford Industrial Reserve, a piece of real estate set aside by the province of Nova Scotia back in the late 60s, early 70s, for industrial use,” Mann said.
“It has never been developed, for a number of reasons, mostly because it was never serviced by rail, by quality road, by industrial electrical corridor, water or sewer. More importantly, it never had access from the water, although the locks along the strait were privately owned.”
If the Melford project goes ahead, the provincial government will improve Highway 344 into an all-weather road, Mann believes. His group will build the required industrial electrical corridor.
“We will own the terminal outright,” Mann said. “We will own the water lots. We will have a very low-cost operating environment because of the tax structure in Guysborough County. We have no legacy labour agreements, which gives us an opportunity to negotiate a fair contract that will assist in the development of the project, rather than limit what you can do.”
“The fact that we’ll have 18,000 feet of on-dock rail to build trains, which limits the number of moves you would have to make, makes the whole project more economic.
“We’re not hampered by urban congestion. There’s no encroachment on those industrial lands, so we have tremendous community support, and the opportunity to do things a little differently.
“We’re very close now to being able to say to a carrier, ‘This is what it will cost you to put a box through the Melford Terminal. Are you in or not?’”
Stay tuned.