Posted on June 18, 2019
Debate over which port expansion should come first plagues Terminal 2 hearings
Environmental impact hearings for the Vancouver Fraser Port Authority’s (VFPA) proposed Terminal 2 project at Roberts Bank have reignited debate over whether another local port expansion should come first.
In a heated discussion at a March 31 public hearing in Tsawwassen, GCT Global Container Terminals Inc. officials argued their unrealized Deltaport Berth 4 expansion should be considered ahead of expanding Terminal 2.
GCT, which operates the VFPA-owned Deltaport terminal at Roberts Bank, believes its project is being blocked by its landlord’s own plans, which officials say would constitute a conflict of interest.
“We stated [in a judicial review] that the port authority has a declared bias for their own project, and the rejection of GCT’s preliminary project inquiry that we’ve submitted to them – and that they’ve outright refused to consider back in March this year – is unfounded and unsubstantiated,” said GCT president and CEO Doron Grosman, who noted the review is scheduled to be heard in federal court starting September 11. “They are relying on anecdotes and erroneous information, and they haven’t demonstrated they have a right to reject our project without consideration.”
The VFPA, meanwhile, said it is concerned about the dominance of a small number of port-
operating players on Canada’s West Coast and the resulting lack of competition in the market, which in turn could drive up shipping rates and stifle economic growth stemming from port imports and exports. Port authority officials argue the Terminal 2 expansion – which, if approved, would be run by a different operator – is crucial to maximize the benefit of the port to local, regional and national economies.
“What I’d say is that powerful private interests are trying to protect a near-monopoly position, and that is contrary to the best interests of consumers and B.C. businesses who are dependent on the [Vancouver port] gateway,” said Duncan Wilson, VFPA’s vice-president of environment, community and government affairs. He added that GCT is owned by the Ontario Teachers’ Pension Plan, the British Columbia Investment Management Corp. and IFM Investors.
“There are very powerful players behind the scenes, and they control almost three-quarters of the container market here in Vancouver.… That’s a big part of the reason why we want to bring a third terminal operator to the West Coast of Canada.”
The fight between the port authority and its most prominent operating tenant is racing against a ticking clock. Projections show container port demand on Canada’s West Coast will surpass available capacity sometime between 2025 and 2030. Without added capacity, officials from both sides say B.C. and Canada could lose significant port traffic to rival American ports along the Pacific.
Given the environmental approval process moves at a glacial pace, Wilson noted that Terminal 2 is the only project that could come online in time to meet upcoming capacity demands.
“It’s critical,” he said when asked about the importance of Terminal 2 to Port of Vancouver’s future competitiveness. “We think that situation is now worse [than the original 2025-30 projections] because Prince Rupert is cancelling plans for a 900,000-TEU [20-foot-equivalent unit] expansion for a larger, longer-term expansion.”
Grosman, however, contends that the port authority’s refusal to consider GCT’s application of Deltaport Berth 4 in March was a major error in judgment, given that the project – in GCT’s view – can come online quicker and at a lower cost than Terminal 2.
“The way the Government of Canada, the gateway of Vancouver and the Province of British Columbia should address the rise in volume – to make sure that we here in Canada continue to grow and gain market share – is for us to work with the port authority,” said Grosman.
“[Deltaport Berth 4] is an incremental project; it’s not brand new,” he said. “And it would use private capital rather than Canadian taxpayer money.”
The VFPA has noted that a letter issued by Fisheries and Oceans Canada (DFO) in the early 2000s clearly demonstrated that an expansion to Deltaport would not be approved, and so the port authority did not pursue that project further. GCT is contending that a change in regulations in 2012 means that the Deltaport option should be put back on the table. The port authority maintains that the Terminal 2 site – farther out to sea with a small footprint on environmentally sensitive intertidal land close to shore – is the clear, less environmentally impactful solution.
The port authority also said that GCT failed to provide updated information on the Deltaport project that was needed in order to reconsider the initiative this spring. That, and the 2003 DFO letter about a further expansion into intertidal land, were among the reasons it gave on March 1 as to why the VFPA is declining to process the GCT application for preliminary consideration. GCT, however, said the VFPA did not provide the information because it had received the letter from VFPA on its refusal to proceed before the port operator could provide the updates.
When asked if the VFPA is surprised the Deltaport expansion was being brought up at Terminal 2 public hearings, Wilson said that the port authority has addressed all concerns brought up during the sessions – including GCT’s challenge of Terminal 2. He added that he expects more “pushback from commercial interests,” but noted that the Terminal 2 proceedings cannot afford to be delayed further.
“Terminal 2 will generate 12,000 jobs – more than 1,000 being longshore jobs at the terminal – and that doesn’t even reflect the jobs that will be created in retail, forestry, food and other export sectors,” he said. “So it’s a significant loss to the economy if we don’t generate that expansion capacity here.”
Grosman, meanwhile, is hopeful that he was able to get GCT’s message across to the review panel face to face. He said the company has high hopes that the legal process for the judicial review of VFPA’s dealings with Deltaport will yield a positive result for GCT.
“The legal process is, by its very nature, a legal process,” he said. “We wouldn’t file a judicial review without the very high level of confidence that we have that we would be successful in that case. And we believe that the panel hearings here … demonstrate even more clearly that the judicial review that we’ve brought will be successful. But we have to wait for the hearing.”
Source: biv.com
