N.S. should support port of Halifax over container facilities in Canso, Sydney: study

HALIFAX -- Nova Scotia should focus on promoting the port of Halifax rather than proposed container facilities in the strait of Canso and Sydney, markets where new ports are unlikely to be viable, says a study prepared for the province.

The $80,000 report paid for by ACOA and Nova Scotia's Department of Transportation considers private-sector proposals for container ports at the Melford terminal at the Strait of Canso and the Novaporte development at the Port of Sydney, as well as the Port of Halifax's long-term struggles to improve its fortunes.

The document by CPCS consultants, dated June of this year, says arguments that the proposed ports would have lower costs depend on attracting container traffic and it questions the likelihood of that occurring due in part to their distance from major markets.

"Certainly, we recommend against public investments in new or alternative marine gateways in Nova Scotia for container traffic," it says. In the executive summary, the authors also note, "new facilities risk diluting the volume that the port of Halifax already has."

The report says Nova Scotia's government should focus on plans and investments "that support the competitiveness of the port of Halifax."

However, proponents for the Melford and Sydney projects say the document doesn't give sufficient weight to their arguments.

"The report lacks a vision for the province, and in the rapidly changing world of shipping, it is already dated," says Marlene Usher, the CEO of the Port of Sydney.

"The report didn't foresee recent developments underway at the Port of Halifax to study a move to Dartmouth to handle the ultra large container ships. One can no longer claim there is no need for Sydney or Melford's private sector deep-water terminal projects when a yet-to-be-costed terminal on the other side of Halifax harbour is now being actively investigated," she wrote in an email.

She also points to the growth of the port in Prince Rupert, B.C., "home of a vibrant and growing container terminal," recalling there was also opposition to Prince Rupert by Vancouver when it was in its early stages.

"Halifax, while having strong attributes as a port, is congested by urban growth," she adds.

Richie Mann, director of marketing for the Melford proposal, points to a recent agreement with a major terminal operator and says he expects the private project will soon secure carriers who commit to use its facility near Port Hawkesbury.

Mann adds the report also has found that while most North American container terminals have seen massive growth over the past 20 years, Halifax has "basically been flat" since 2003.

"Let's put it this way. We've said from day one that in order to make this project go we have to introduce new cargo into the mix. ... That's our target. It's always been our target."

A spokesperson for the Port of Halifax declined comment.

The study recognizes that both the Sydney proposal and Melford will have some competitive advantages, including that they don't have the same land-based bottlenecks Halifax faces, while they will benefit from low construction costs, deep water, modern labour agreements and modern technology.

However, the study notes, "both ... have the disadvantage of greater distance to inland markets than existing ports." It also says that Sydney's plan to use short sea shipping after the vessels arrive in the port would create "prohibitive" costs.

It notes that a three-port strategy for Nova Scotia would send conflicting signals to the shipping line industry about the future of the province's main port.

The study raises a number of red flags for the Port of Halifax's future, saying that the shipping industry may be about to go through a period of consolidation and Halifax is considered a "discretionary" harbour in comparison to competitors along the U.S. northeastern coast and Montreal.

The raising of the Bayonne Bridge in New York will increase the harbour's ability to admit large ships and "this will likely erode some of the Port of Halifax's business as it will no longer have the same advantage over New York/New Jersey for accommodating ships over 8,000 TEUs," it says.

The lack of a large local market also creates headwinds for the success of Halifax, as ships tend to prefer to unload at larger centers where they can increase profits by offloading close to the final destination, says the report.

However, the authors say that the expansion of the Suez canal capacity could lead to positive news for Halifax as more traffic from southeast Asia flows to the eastern coast of North America.

Geoff MacLellan, the provincial transportation minister, said in an interview that he finds the research helpful, but the province isn't endorsing the findings.

"With respect to Melford and Sydney ... there's real opportunity here. ... The fact there's no real estate left on the eastern seaboard says that they need a wide open, green-space port," he said in an interview on Wednesday.

The study was released to stakeholders, but as of Wednesday wasn't provided to the public, said a spokesman for the department.