By Tom Peters

If all goes according to plan, the port of Sydney, NS could become a future transshipment hub for container cargo on North America’s East Coast. Harbour Port Development Partners (HPDP) is spearheading a $1.6 billion project to develop a megaport called Novaporte and a 1,250-acre, logistics park, Novazone. The logistics park will be developed next to Novaporte and within the area recently designated a Foreign Trade Zone.

The project is targeting vessels with capacities of 14,000 TEUs and larger. The cargo would be transshipped by smaller vessels to ports along the East Coast unable to handle the ultra large container ships, and up the St. Lawrence to Montreal. The terminal, which will also be suited for cargo transload, will be served by rail with CN connections to Central Canada, the U.S. Midwest and as far south as Memphis.

HPDP’s Barry Sheehy said in recent comments to delegates at Sydney Port Days, there has been a noticeable shift in container traffic from West Coast ports to East Coast ports, driven by such things as port congestion, the deployment by shipping lines of ultra large container vessels and a lack of port infrastructure to handle this vessels.

Sheehy said these large vessels are “forcing ports to adapt” and make major investments to their infrastructure and to inland rail connections.

Vessels with capacities of 14,000 TEUs and greater now move through the Suez Canal to reach ports in Europe and North America. Sheehy said it is these ultra-sized vessels that Novaporte wants to attract. “Novaporte and Novazone are ideally positioned” to develop a modern, semi-automated terminal and logistics park to handle these ultra large vessels and their cargo, he said. The port, situated six miles from the Great Circle Route and the closest port to Europe, completed a major dredging project in 2012 taking the harbour entrance channel to nearly 17 metres, sufficient depth for these ships.

HPDP, which has been given exclusive rights by the Cape Breton Regional Municipality to market the port worldwide, has been assembling its team. Jonathan Wener, Chairman and CEO of Canderel Group, a partner in the Novazone project, told Port days delegates that Canderel, a Montreal-based real estate investment, development and management company, will develop the logistics park, in three phases. He said, “Novaporte and its adjacent logistics park, Novazone, will undoubtedly change transportation patterns in eastern North America.”

Bechtel, a large U.S. engineering and construction company, has been involved with the project for several months and HPDP has also engaged former Canadian Prime Minister Jean Chretien as an international advisor.

Last December, HPDP signed a memorandum of understanding with the China Communications Construction Company (CCCC), the world’s largest port construction and design company, to discuss arrangements related to the design, construction and ownership of the container terminal. CCCC will provide container cranes, gantries and other port related equipment. CCCC, which could become an equity partner in the project, is carrying out an extensive study in Sydney to determine if the project is feasible. The results of the study are expected to be known sometime this summer.

Sheehy told delegates that the project has its financing in place but before construction can start, and the project is deemed feasible, HPDP needs to sign one or more major carriers to a long term agreement to use the facility. He said in an interview, HPDP is in negotiations “at the highest levels” with shipping lines around the world. “The interest is very high. They know they have a problem and they are intrigued by our solution,” he said. HPDP, however, has to develop “an economic model that makes sense for them,” said Sheehy. “We are working on that. We have to have the right number,” on cost per container which is determined by several factors, he added.

“The stakes couldn’t be higher. We have a window of opportunity and we need to be going through it but we need to get our act together. If we don’t take advantage, the opportunity is gone,” Sheehy said.

Rail to the port has been an issue for the past several months as Genesee & Wyoming, owner of the Cape Breton and Central Nova Scotia Railway, is in a position to file with the Nova Scotia Utility and Review Board, an application for abandonment of the Cape Breton section of the line from St. Peter’s Junction to Sydney. The company stopped using that section due to a lack of business. The railway connects with the CN mainline in Truro. A source close to the rail line said it would take $60 million to $70 million just to upgrade that Cape Breton portion of the line to carry double-stack rail cars. Sheehy is convinced rail will be available if and when it is needed. “We have been talking to everyone we need to talk to. I can’t say much more than that,” he said, adding “a lot has to be invested in infrastructure if this port is to move forward.”