By Tom Peters
In 2005, Melford International Terminal Inc. announced it planned to build a major international marine container terminal and logistics park in Melford, Nova Scotia, on the Strait of Canso. Now, more than 15 years later, more than $40 million has been spent, according to some reports, on preliminary work, ongoing administrative operations, the purchase of land for the terminal, logistics park and rail corridor lands, but construction of the terminal has not yet started. Since Melford announced its intentions, a second mega terminal proposal, Novaporte, has been announced for the port of Sydney, and Halifax Port Authority is expected to look at a mega container terminal in its long-term strategic master plan. This comes following reports that the two terminal operators in Halifax, Halterm and Ceres, are presently in merger discussions.
Further, a recent $80,000 report on the proposed container projects, paid for by the Atlantic Canada Opportunities Agency and Nova Scotia’s Department of Transportation, says the focus should be on promoting Halifax as a viable container port and not Sydney or Melford where “new ports are unlikely to be viable.”
No public money has been discussed at this point for either Melford or Novaporte, although $36 million, mostly public funds, were used to dredge the entrance channel to Sydney Harbour, a requirement for deep draft ships that would call Novaporte. Melford says it has no intention of seeking public funds.
The Sydney project, which is billing itself as a transportation hub, will have a 500-acre logistics park called Novazone. Montreal-based Canderel Group is to build the park. The total price for a completed terminal and park has been earmarked at $1.6 billion. Albert Barbusci of Harbour Port Development Partners which proposed the Sydney project, has given the project a time line. He said Novaporte will happen within 12 to 24 months “or it goes on the back burner. We are not going to be at this forever.”
Richie Mann, Melford’s Vice-President Marketing, has said on various occasions that everything is in place and ready to go for his Melford project and nobody is ready to pull the plug. In a further show of commitment, Melford Terminal and its financial partner, Cyrus Capital Partners, recently signed an agreement with SSA Marine to operate the terminal.
“Development projects have to make sense and be supported by a sound business plan and a reasonable return on investment,” Mann said in an email. “Melford continues to make sense as evidenced by continued support from the investment community and the meaningful partnership with world-class operating giant SSA Marine. As long as the ‘value proposition’ remains strong, efforts will continue to develop the terminal,” he said.
And Melford is not concerned about a mega terminal in Halifax. “Our project has never been conditional on anything Halifax has done or is doing. We are an independent, private sector initiative that has always recognized that Melford’s success will be realized through incremental cargo volume, not a dilution of local cargo. That would simply be a race to the basement and we have no interest in that,” Mann said.
However, for Melford to start construction, Mann says the project needs a long-term commitment from a major carrier, but with all the mergers and acquisitions happening in the shipping world, finding a carrier to make such an important commitment has been challenging.
“While in the short term, this has caused carriers to contemplate their next moves and may have slowed down their decision-making to some extent, but in the long-term, quite the opposite,” he said. “Every merger and alliance between carriers means an ever-increasing use of mega vessels. Melford has always been intended to be ‘purpose built’ to accommodate those vessels. With most East Coast ports ill-prepared or ill-equipped to efficiently service the larger vessels, Melford is attractive to carriers and cargo owners looking for efficient, reliable operations,” he added.
Building a mega terminal, however, requires two-way cargo and Mann is confident there is opportunity to develop strong exports over the facility.
“We have been working very hard on identifying and attracting exporters, and we have identified a number of entities that are interested in taking advantage of our ability to consolidate export cargo on dock, which greatly increases our range for exports,” he said. “Similar to Prince Rupert’s experience, we are also confident that as the terminal becomes real, entrepreneurs will recognize the opportunities for new initiatives previously considered not viable because of transportation distances and costs,” he added.
To develop exports for Novaporte, Barbusci said, “The general industry rule is that imports drive exports. That said, if we look at the Detroit market as one of our destinations, the carriers would attract clients with steady export volumes (scrap metal, waste paper) to use the Sydney routing back to the Far East.”
And how would the expansion plans presently being executed by Saint John Port Authority fit in with any of the above?