Company running Deltaport slams port’s search for T2 operator

December 10 2019

The operator of the Deltaport container terminal at Roberts Bank is once again slamming the Vancouver Fraser Port Authority, this time for starting the hunt for a new operator for the proposed Terminal 2 expansion.

Global Container Terminals says the failure of the port authority to obtain a commitment reinforces that T2 is the wrong solution for developing container capacity on Canada’s West Coast.

In a news release, GCT pointed to its statement to a federal review panel considering T2, stating, “There remain significant questions as to whether RBT2 provides relevant and necessary financial rates of return for a terminal operator to support sustainable operations at prices which will keep Port of Vancouver the preferred destination for discretionary inland cargo. Previous attempts by the VFPA in the mid-2000s to secure a terminal operator for the then proposed RBT2 did not lead to a positive outcome either. One might argue that a large greenfield terminal is no longer a commercially viable means to add capacity to the market.”

GCT also notes, “Any attempt to force a successful procurement outcome would likely involve the port authority investing public dollars in the form of costly financial incentives to attract the appropriate private sector operators. This approach does not make sense.”

A statement by the port authority last month noted it has decided to restart the procurement process for T2, including construction and terminal operation, following the public hearing on the project that wrapped up this summer.

“We began our search for a terminal operator in 2013 when we expected the federal environmental assessment to be completed by 2016. Procurement decisions are informed by market conditions. Since so much time has elapsed, we think it is prudent to re-assess these conditions and re-evaluate procurement options for both construction of the land mass and terminal operations, to be sure we are pursuing the right model for Canada. This fall, we will go out to the infrastructure and terminal operator market to learn more about choosing the best possible delivery model for construction and operation of the terminal,” the port explained.

“Over the past number of years, the port authority has been in negotiations with a potential terminal operator for the project. In view of the delays and resulting decision to initiate a procurement process, we have mutually agreed with the terminal operator to end those negotiations. Our decision is in no way a reflection of the capability of the proponent with whom we have been negotiating or the project’s feasibility,” the port adds.

T2 is a proposed three‐berth container terminal that would provide 2.4 million TEUs (20-foot equivalent units) of additional container capacity annually.

The project is undergoing a federal environmental assessment by an independent review panel under the Canadian Environmental Assessment Act. The panel is to make a recommendation whether to approve the project, which would be constructed on a man-made island adjacent to the existing Deltaport terminal.

GCT, which was not in the running to also operate T2, pitched an alternative with a fourth berth built next to the existing facility, a proposal shot down by the port authority.

Saying T2 would be the most expensive terminal development ever built in North America, GCT noted it is not alone in calling for the port to reconsider and look at other viable, quick-to-market options to provide capacity.

The DP4 solution would incrementally deliver up to two million TEUs of new capacity to the west coast by the 2030s, GCT notes, adding that, until then, expansions by private-sector terminal operators that are already underway will meet all projected demands.

“Unfortunately, the current VFPA governance model and review process is not an impartial mechanism, and thus is obstructing proposals like DP4,” GCT states.

The company is calling on the federal government to review the port authority’s governance model.

This article by Sandor Gyarmati originally appeared in the Delta Optimist on December 9, 2019.


Watch: Deltaport 4 vs. Roberts Bank Terminal 2 


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