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Slowdown puts a hold on Rupert expansion
2009/2/23
As container volumes slide in the Pacific Northwest ports, expansion plans for the container port at Prince Rupert have been pushed back 18 months.
Don Krusel, president and chief executive officer of the Port Rupert Port Authority, confirmed that phase 2 of the port''s development has been delayed until late 2010. Originally, work on the US$523.37 million project was scheduled to commence in the middle of this year.
Krusel''s comments came after allegations that the project was stalled due to tight finances. According to a press report, the port authority would not be able to raise $161 million - its share of the project - under the present credit crunch, due to its limited cash flow and borrowing limits imposed by the federal government. Krusel attributed the decision to postpone the development to the recent decline in traffic.
After a strong start, the port''s throughput has flagged in recent months. Since the launch of operations in September 2007, Prince Rupert managed to establish itself fairly quickly as a gateway for Asian traffic to Canada and the US Midwest, fuelled by the expanding activities of Cosco, "K'''' Line, Hanjin and Yang Ming. In the quarter that ended September 30, the port handled 59,220 TEUs, up from 22,515 TEUs in the second quarter and 21,040 in the first three months of 2008.
However, growth has been way below expectations, particularly after declines in the fourth quarter. Whereas earlier projections had envisaged the port reaching capacity by early 2009, the port authority now anticipates that this will happen some time in 2010.
According to Krusel, discussions on the financing of phase 2 of Prince Rupert are in progress, but he declined to reveal any details. The container port is a public-private partnership jointly funded by the port authority, Maher Terminals, which operates the facility, CN Railway and the federal and provincial governments.
Ports in the Pacific Northwest have been pummelled by a drop in inbound traffic in the second half of 2008, which got worse towards the end of the year. Vancouver, which claims to be the region''s dominant port with a 38 percent share of the traffic, suffered a 10 percent decline in overall tonnage for the year, which brought its 2008 tally to 114.6 million tonnes.
The port''s container throughput was flat, ending the year with a total of 2,492,107 TEUs. Surprisingly, shipments of automobiles going through Vancouver were also largely unchanged.
The port''s smaller rivals south of the border fared worse, albeit better than the gateways further south in California. A 27 percent slump in container throughput in December pushed the port of Seattle''s container traffic for the year down 13.6 percent to 1.7 million TEUs compaered with the previous year.
At Tacoma, a 12.3 percent drop in container volume in December produced a total of 1.86 million TEUs for the full year, down 3.3 percent from 2007. The port''s automobile throughput, traditionally a big chunk of its business, fell 9.1 percent, and intermodal traffic fell 15.2 percent to 407,993 lifts.
Port Metro Vancouver, the amalgamated port authority for Vancouver, Fraser River and Prince Rupert, remains on track to pursue a $764.9 million investment plan for the coming 10 years which was announced in December. A large chunk of that money is earmarked for the creation of a second container terminal at Vancouver''s Deltaport, a 200-acre facility with three berths slated for opening in 2016.
The port authority expects business to be down for the most part of 2009, admitted chief executive officer Gordon Houston, but added that these infrastructure projects were for the long term and that the port authority''s confidence in the long run remained strong. Houston is expected to retire this year.
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2009/2/23