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.

Share

Related Articles

The City + Show all articles

Reference Material

Post a Comment

Most Recent Comments

  • Sadly again the taxpayers of the region and this country are being presented a dream that flies in the face of common sense of the knowledged. The Canadian market for retail goods is rapidly becoming a nusense market for the Chinese and other Asian Countries. This thought that being closer to Europe then Halifax by Sydney is not valid considering the Chinese are the financers of the 5 billion dollar Third locks system at the Panama Canal. From the Sea of Japan to the Panama Canal it is a straight 9000 mile full speed journey. Transitting the canal is typically about 12 hours, I know from personal experience . IN 2014 the new locks open with a capacity to have any ship transit Post Panamamax will not even become a new Panamamax as a new panamamax will indeed be larger then the largest post panamamax vessels. All US ports are preparing for this and a Shanghei to Houston journey is about 3 days less then the route through the Suez Canal to Halifax. The Suez canal route requires the navigation of seaway speed bumbs including the The Straits of Gilbraltor , Red Sea , The Suez Canal , The Straits of Malaca, and the Solamia coast. Piracy being a threat on that route which probably increases insurance for shippers. Shippers from Asia will defer to getting their products through a conflict free Caribbean Sea , Pacific Ocean and Panama Canal faster then going to Nova Scotia to then place containers on a train or truck with a day and half to get to a population centre with one million people. Texas and Florida combined have more people then Canada. Houston , Galviston, Mobile, Tampa, Miami , Port Everglades , Jacksonville , Savannah , Norfolk , New Jersey , New York and Boston all could handle this traffic with more capacity much closer to the market that counts for the Asians being the 14 trillion dollar economy named America. Vancouver and the West coast will service a Canada’s main growing market Western Canada. This indeed is a bonndoggle that Cape Breton is sold not unlike the oil refinery in Port Hastings and the Heavy water plants in Glace Bay and Port Hawkesbury. The next wave of shipping of goods for Chinese companies will not even transit the Suez or Panama Canals or the Pacific Ocean. Chinese companies are having difficulties with maintaining cheap labor and are looking to West Africa with all the raw material needed to produce there goods with plentiful cheap labor in Africa. About a 4000 mile straight line journey from a place like Sierra Leone to the Eastern Sea Board of the US. Europe is not going so sustain Halifax for container traffic as the fortunes of their manufacturing giants like BMW and others are connected to making product in the Southern US where you don’t have racial labour unions. People in Atlantic Canada do not realize the scale when we are talking of southern US ports . Savannah for example has enough running feet of docks to include the Fairview container terminal and every running front to the tip of Point Pleasant Park . This is one Ice Southern US port among many . Ikea ships all their North America product from Sweden to this port . The Return trip they load southern pine for the trips back to sweden.

    paul taylor | March 7, 2012

  • Reading the log of comments and thinking of few points…

    1. Sydney is more or less ice free now. I’ve been living here for 15 years and i’ve never seen ice past South Bar of any substance. Plus the Marine Atlantic ferries break up what there is in the outer harbour every day.

    2. I thought that post-panamax vessels were too high to pass under both MacDonald and MacKay bridges? If that’s true then Hfx has to either raise the bridges or it can’t receive the ships. Development of the south end terminal is probably a non-starter.

    3. It is a bandwagaon strategy locally, the politicians are doing their usual dance around the truth and the local business elite who have pulled millions out of ECBC and its predecessors are expecting you and me to subsidize their “business case”.

    4. As Jeff stated a few posts back, there may well be a business case for a post-panamax transhipment entrepot somewhere in NS ( container and bulk) but the its likely a one location deal, and the rail line situation needs to be addressed to make it happen.

    Dan | July 20, 2010

  • Bill, I too, was puzzled by the news reports. It made little sense to me, given the poor performance of Halifax over the last decade, that anyone would invest in the Sydney project. And let’s face it CN has never been all that keen on providing a decent level of service for Halifax. Any improvements have required a major push at many levels and taken far too long. Thanks for your good sense on many fronts.

    Mike Patrick | June 21, 2010

View all comments