If You Build It, Will They Come?
Posted June 14, 2010
All Nova Scotians should be supportive of sound initiatives to help the economy of Cape Breton. The three political parties in Nova Scotia have endorsed the idea of spending $38,000,000 to dredge Sydney Harbour and are now urging Ottawa to come on board. Proponents have argued that the result will be the creation of 6,500 jobs, and if so this will be money well spent. Unfortunately it is not as simple as that.
The document which argues the business case for the dredging is not easily obtained. Neither the Sydney Chamber of Commerce nor the Port of Sydney have a copy available, but the port did advise that it is based on the Master Plan available on their website.
According to that plan the vast majority of the jobs from dredging would result from the development of a terminal for receiving containers and sending them on by rail. This will require several other pieces to be put in place; otherwise the $38,000,000 expenditure will result in little of value. So four questions need to be asked:
1) The necessary container pier will need to be built. The Master Plan estimates a cost of $300,000,000 in two phases, to be built and owned privately. Is there a well financed private player committed to building the facility?
2) The Plan highlights the fact that Sydney represents the fewest sea miles from Europe and the Suez Canal. Unfortunately it is also the most rail miles from the final destination. Rail miles are more expensive than sea miles . That is why the Port of Halifax (the current closest destination by sea) has had no growth in container traffic over the last ten years. Halifax can handle the new very large ships but is currently operating at well under half its capacity. Have shipping lines indicated that there is an advantage to Sydney that they can not get at Halifax?
3) The rail line from Sydney to Truro would need to be upgraded to handle the trains at a reasonable speed. Is RailAmerica (the owner) committed to making the necessary expenditure?
4) Rail service to Central Canada and the American Midwest will require the support and participation of CN. Currently CN runs just one container train per day from Halifax so there is plenty of unused capacity. In the early stages of development at Sydney there would be only one or two trains per week to support CN overhead. Is CN committed to providing the necessary service?
Unless there is a positive answer to each of the above questions Cape Bretoners will receive few if any of the hoped for jobs. Politicians at all levels should make their support conditional on satisfactory answers to the four questions.
It is entirely appropriate that the provincial and federal governments spend money on infrastructure that will boost employment, particularly in areas like Cape Breton that need economic prospects to improve. But it will be very disappointing for the people of Cape Breton and other taxpayers if a major expenditure is made with little resulting jobs growth.
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