MR. CHAIRMAN: I want to welcome, today, Mr. Merv Russell from the Halifax Port Corporation and Mr. David Bellefontaine. I want to start, gentlemen, by saying that we, the members of the committee, had an opportunity to have a tour of the port last week. I think it was certainly very informative, on my part, and I think the others appreciated it to a very great degree, trying to get some understanding of what all it is you do down there. It is a very impressive operation.
The format will be, we are going to turn it over to you. I understand you have a presentation that you would like to make. Then I will keep a speakers' list and there will be questions after that.
MR. DAVID BELLEFONTAINE: That is fine by me.
MR. CHAIRMAN: Who would like to begin?
MR. BELLEFONTAINE: Mr. Chairman, I have a presentation with slides which may help you to, again, get an orientation on the port from a different perspective than what you had last week. It should last about 15 minutes. Can we dim the lights?
First of all, in 1984, the Halifax Port Corporation was formed and it was formed as a result of a new Act called the Canada Ports Corporation Act which basically replaced the National Harbours Board which was in effect since 1936. So we have a new name and a new logo and basically we started then to become more commercialized as a local Crown Corporation.
In terms of where we are, where the port stands, the port, as it shows here, has many constituencies and one of them is here, of course, the media, and the second one is the standing committee of the province. But if you look at the port as a multi-modal, seamless, integrated, world-wide cargo conveying system, what does that include? You can see around the sides, we have the shipping agents who represent the lines, we have the carriers themselves who we refer to as the tier-one customer; stevedores and terminal operators, the longshore labour, which is very important to the port. We have government regulation, government departments from primarily federal at this stage. Railroads are very important, motor carriers, trucks, freight forwarded brokers, custom agencies, warehousing operators and pilotage and tugs operations.
So we are here in the middle and, as you can see, we have to work with and in a very enhancing way, to try to get all these players to work together for the benefit of the port to increase the cargo. I know some of you have seen this before but it is so very important to show, the economic impact of the Port of Halifax. We are using the term, Port of Halifax, not Halifax Port Corporation because this includes all of the industries around the harbour, including the private sector.
You can see from the employment standpoint, about 7,000 jobs are tied to the port in one way or another. You can break that down into direct and indirect; and the direct jobs, which you can count on a daily basis at the port, in one way or another, there are about 2,500. This is today. In terms of the income generated from those jobs, about $226 million, on a direct basis, $86 million. These are big dollars for Halifax and, obviously, that is why the port is considered one of the major economic engines of the province.
I have a number of slides here showing you the port, to give you a good impression of what we do and where we are. This is looking from north to south and you can see the Fairview Cove Container Terminals located here; it is a two-berth facility. We also administer, as the Halifax Port Corporation, Richmond Terminals, which is located here and, of course, the South End Terminals which are located down in this end, including Halterm. On the Dartmouth side, the only piece of land that we have to administer is this small slip here known as the Dartmouth Pier. It is a small piece of land; it was a wooden wharf years ago and we filled it in because it was a safety hazard.
Now this slide shows you looking from south to north and this is the Halterm container facility here, next to Point Pleasant Park, a number of finger piers and this is called a sea wall. So our property runs from this point south and, of course, Fairview Cove is at the north end. When you look at the water-side administration of the harbour, we have authority from a point near Purcells Cove over to Eastern Passage and that imaginary boundary line just crosses the north end of McNab's Island, so from that point in, including the Northwest Arm, the harbour itself, Bedford Basin, is under the administration of the Halifax Port Corporation.
This is another shot showing more central in the harbour and, as I said, an imaginary line would run something like this. From that point north would be under our administration from the water side. Now the mission of the Halifax Port Corporation - and I have highlighted a few words here - is to develop, market and manage assets in order to promote trade and transportation, and that is very important, and act as a catalyst for the local, regional and national economies. So we are not there primarily to make money. That is not our prime objective, and you will see the next slide shows that we must be financially self-sufficient in order to do all this.
So what we do is we plan and we develop facilities, and we lease those facilities to the private sector. Then we act as the promotion marketing agent to promote the port basically around the world. We act as a catalyst to further promote the port and to try to get the constituents, that I showed you earlier, all together in one tent to work together for the betterment of the economy.
Here is the second part of the statement, to be financially self-sufficient. So we have to be profitable, although that is not our overall goal and, of course, to be environmentally responsible and hopefully treat our employees with dignity and give them the opportunity for future growth.
Now what is happening around the world in terms of global trends - I know some of you have been following these very closely - we are into what we call major alliances around the world that control shipping. Years ago, you had a shipping line that was primarily destined to control shipping from the States' point of view. Now you have alliances, regardless of culture, they are coming together, and they are being forced to because of economic means, in order to remain viable. So you have major alliances controlling all the trade around the world. So you have higher risks. If you gain a new account, you could gain three or four shipping lines. If you lose an account, you could lose three or four shipping lines. The risks are higher and that is going to continue. There will be further consolidation, further mergers that we expect from the shipping lines.
In terms of capacity expansion, there is a surge in new buildings and I have a slide to show you on that. New buildings means newer ships and in most cases, larger ships. You get different predictions from lines. Some companies are saying that demand is outstripping supply. Others are saying supply is outstripping demand. So you get a multitude of predictions and opinions and we, as a Port Authority, have to sit down and try to work through all of this and try to develop the port to the best of our ability, to meet the demands as we see them.
We talk here about an overcapacity in the Pacific. Ocean rates are at an all-time low. Some of the carriers rates that they are charging now are lower than they were in 1985. So it gives you an idea of the pressure that they apply to us, the Port Authority, to keep our rates low and to other service providers.
Cost focus has become the number one factor for shipping lines. Ten years ago, when you talked to a shipping line about calling a port, you would ask them what are the three most important factors and the top three would be service, service and service and then cost would be the fourth. Today, as you can see, cost has become the number one priority of the carriers, followed very closely by service.
As you can see here, we are under extreme pressure from the U.S. ports. New York is continuing to reduce the rail rates. Things like, Massachusetts has passed a law rebating the shippers for the harbour maintenance tax that is applied to the shippers in the States versus in Canada we have a Coast Guard cost recovery scheme that we have to pay for, to the tune of, at this point, $20 million. There is U.S. deregulation that we are facing which means that the carriers will no longer have to file their rates. They can negotiate confidential rates with the shippers which means, in most cases, lower rates, although you talk to some carriers and they say the rates cannot go any lower. I can assure you, under deregulation, there will be lower rates. That is how it works.
The low Canadian dollar is certainly helping Halifax in attracting these carriers because when they call Halifax, first inbound, which a lot of them do, they are paying their costs in Canadian dollars but their rates, their prices are charged in U.S. dollars. There is quite a gap there. So a low Canadian dollar helps the port here, or any port in Canada, gain shipping lines.
In New York, as well, the guaranteed annual income has been reducing over the years. Actually, before this, it used to be almost $10 per ton that the employers would assess to pay for the guaranteed income of employees in New York. It dropped to about $5.85 in 1989 and it dropped further to $1.85 and now it is down to $1.00. So that is basically $9.00 per ton that has come of the cost of calling New York. To give you an idea what that means, in our Port Authority, our total wharfage, which is our largest revenue generator, is $2.70 per ton. That is our total revenue. They have dropped $9.00 per ton just on guaranteed annual income. So it gives you an idea what that means to a shipper calling New York. Then there is a subsidy that New York has implemented as well to carry the containers inland to a railhead.
Now when you talk about the vision of the port. I have got here, to be a leading North American gateway port. It is unlikely we are going to be the leading North American gateway port. New York has 2 million TEUs. We handle just under 500,000. Long Beach, which is the largest port in North America, has 20 times our volume. So it gives you an idea that you have to strive for something that is attainable and that is reasonable. If you get people out there saying that we should be a Singapore, well, forget it. We will never be a Singapore. Singapore, this year, will handle 15 million TEUs, 30 times our volume. So you have to be realistic and we are being realistic by saying, a leading North American gateway port.
More facilities and more detail, this is the Fairview Cove Container Terminal, located in Bedford Basin. This so-called lagoon - we call it the blue lagoon, it is actually green - has now been filled and the board just awarded a contract last week to complete the filling of that
and to service it and light it. That will create another seven acres of land for that terminal to operate. We have also put new railway trackage on that terminal. It is a two-berth facility. It was opened in 1980. It was expanded in 1985 with the addition of the second pier and we have about $50 million invested in that terminal at this stage. It is operated by a company called Ceres Corp. which is a private operation. The involvement that we have, as a Port Authority in that, is that we are the landlord and we are involved in the navigational and anything to do with the wharf itself involves the Port Authority.
This is Richmond Terminals, I mentioned to you on an earlier slide, and there are three sheds. This is primarily real estate now. Prior to the Volvo Plant going to Bayers Lake - and we know what happened to that recently - they were located here for many years in Shed 9. Now this shed is leased and that shed is leased to a number of private companies like Teleglobe Canada, the Halifax Shipyard, Swim's Lobster Pound, we have PanCanadian located at the north end of 9B. They also lease this area. We are looking at leasing this area, 9D, to a prospective client in the near future. So we are heavily involved in real estate and not just cargo operations.
This is a shot of the South End Terminals. This is our administration building here and from this point down and all these finger piers, including the Halterm or Pier C, as we call it, is under the administration of the Port Authority. You can see we have a grain elevator complex here. The building is back here further and this is leased, as well, to a private company. This terminal here, Halterm, including this wharf here, is leased to Halterm, a private company. Any time there is an operation on these so-called common-user facilities, there is a licence fee or an agreement made with a private company to operate there on a daily basis, a weekly basis, a monthly basis or whatever.
So we are basically privatized with all the operations that we have. The Port Authority, itself, operates absolutely nothing. Prior to 1985, we operated the grain elevator and we were not good operators. We decided to privatize it, which was undertaken in 1986.
Now this is our newest facility. It was built a year and one-half ago. It is known as our forest products shed and it is on Pier 27. You can see this portion is part of the old Shed 26 which is left. That shed actually extended here. We had another shed here but they weren't really conducive to forest products operations. They had columns inside. You couldn't operate large forklifts in there. The floors weren't very level. These sheds were built in the 1930's. So as a result, we did a lot of research and we negotiated contracts with shipping lines and with forwarders of forest products and got commitments and we actually built that shed. That shed cost about $5 million and I think some of you have seen that shed last week and you had a tour of it and so on. That is one of the better sheds in eastern Canada right now.
Now we are going south. This is what we call Pier B before it was refurbished and leased to Halterm. Halterm is right here. I wanted to show you that because this was the kind of operation that we had in the 1960's primarily. A lot of these sheds - and we had two sheds
here, by the way - we handle a lot of break bulk cargo which was boxed, bagged, barrelled, whatever, not in containers and not bulk, through these facilities. In the 1960's, primarily we were a winter port for the Port of Montreal. In 1969, when this terminal opened, there was a lot of scepticism around Canada, primarily central Canada, that said, well, to hell, give them the money, let them build a terminal, they will never be successful. Within three years of that terminal being built, we were looking at a second phase. So it gives you an idea that with the right technology and the right attitude, you can move this forward.
This is the finger pier now, with a different angle, mind you, but you can see the sheds are gone from here and we have the cranes being structured and it is all part of the Halterm facility. There is the completed facility with one crane here, three cranes here, and, as of last week, crane number two, which is here, has been placed on this pier permanently. That is the Halterm Terminal looking from west to east. This now encompasses about 75 acres, including this terminal here, and it has three berths. Actually, in 1986, for those of you who remember, this breakwater used to extend out a little further. We took off the nose of that breakwater, and we added 150 feet to the wharf here, and we put a walkway out for the public to actually get out and see the operation. As a result, this terminal continued to be a two-berth terminal, because as you will see later, as the ships kept getting larger, they started to squeeze the capacity of the terminal, and as a result, we had to extend it.
Getting an idea of what else we are involved in in the harbour, a lot of these are safety-related issues and operational issues, but I think most of you know, we have had boat races in the harbour, we have had fireworks, of course oil rigs come in, jack-up rigs come in quite often for servicing and for inspection. This is an Argentinean tall ship, we are expecting a major tall ships session in the year 2000. The QEII cruise ships. This is the USS Coral Sea, which was docked at the seawall a few years back, it gives you an idea of the size and the magnitude of that ship. We have three sheds here, and this is a boom that we put around the ship to secure any leakage of fuels or anything else. It is all part of the standard procedure.
Of course, our ambassador here. This is the Nordic Apollo that is used on the Sable Island gas. Some of the shipping lines that call Halifax, ACL has been here for 25 years. The Hoesh Line calls our forest products facility, a lot of break bulk forest products and containers go on that ship, and that ship calls Singapore and India. Hapag-Lloyd has been at the port for 25 years as well, a German-based company. Maersk line, Maersk is the first line to bring in a post-Panamax ship into Halifax, and as a matter of fact, Halifax was the first North American port of call, if you recall, last month. They brought her in last week for a second call. Maersk just introduced their second large post-Panamax ship on a service, and you will be seeing that probably within three weeks. I will talk a bit about that in a second.
Wilhelmson Line, again a container and break bulk. A lot of these ships today, you will find containers here and a lot of break bulk as well, combination cargo ships, but most are going toward totally cellular container vessels. There are a lot of forest products today that 10 years ago you would never expect to be in containers, and they are in containers because
the freight rates have become so low, it makes it attractive to use containers for the handling of this cargo. Zim Container Lines here at Halterm.
This is a double-stack train service by CN. Talking about double-stack, I will just give you an idea of how that has grown so quickly. In 1984, there was one train set in the U.S., it left Long Beach destined for Chicago. All 44 containers, 2,000 miles non-stop. That makes good economics for a double-stack service, long hauls, heavy cargos, same boxes. That is when it started, 1984. Not that long ago.
Five years later in 1989, there were 114 train sets leaving the West Coast of the United States going inland, and as you can see, Chicago is not the only base now, or the only destination, Kansas City, Dallas and Houston, and from that point, you use other feeder, truck or rail to get to other points in the U.S.A. That is 1989. Four years later, 241 train sets, again from the West Coast. The number here represents the number of train sets leaving on a weekly basis from that origin to its destination. That is how fast double-stack train service took off in the United States.
Prior to that, most vessels had to come through the Panama Canal and up the East Coast of the U.S.A. and Canada, and feed the ports on the East Coast. As ships became larger, the economics of doing that don't really justify the vessels going as far or calling as many ports, so they are cutting back on the ports of call and using double-stack train service, so long as it is efficient and cost-effective. That is what they analyze.
In terms of the container ship evolution, which is what is driving port developments around the world, you go back to the first generation container ship, 450 feet to 630 feet in length, which is what our Halterm was built to accommodate. They were basically converted oil tankers, that is when this whole thing started, they converted tankers into a container ship. As you can see, second generation, 700 feet and they became cellular container ships, they now had cells within which the containers would slide into and be secured, in that decade, 1970 to 1980. Then we went to the third generation, 860 feet to 950 feet and these were what we called, Panamax class, which indicates that this is the largest ship that can navigate through the Panama Canal because of its draught and its width and I think it is 106 feet that is the maximum width that can navigate through the Panama Canal. Now we are into fourth generation, 900 feet to 1,000 feet which is what we have in Halifax with the Maersk ships, post-Panamax ships. The fifth generation will be in excess of 1,100 feet and they call them, post-Panamax-plus. That is the next stage of size of ships that are coming.
The cranes had to keep pace with the size of vessel, obviously, because of the different height and the outreach characteristics of a ship. When you go back to the 1960's, for $750,000 you could have a crane that would be on your pier, 50 foot gauge here and about 65 feet high. In the 1970's, the cost tripled, $2.4 million for the same crane, it is not the same crane but in terms of the crane that was required to handle the new ships. Now you can see the gauge is 100 feet with 130 feet outreach in the boom, versus 115 feet. In the third
generation, you are into 156 feet outreach here from 130 feet to the boom and as you can see they are now 100 feet off the cope wall, versus 82.
The post-Panamax-plus cranes which are costing $8 million each will be 170 feet outreach and 120 feet high. Some of these vary depending upon the manufacturer but it just gives you an idea, the parameters at least of what we are dealing with when you are looking at new cranes. You are looking at $8 million and you cannot just buy a new crane, you have to purchase land-side equipment, trucks and straddles and so on to feed that crane. So you are dealing with a crane system or a crane unit which costs more like $10 million. In terms of post-Panamax vessels, you can see the existing number of vessels, 27, this is world-wide by line and this is the size of the ship in terms of TEU or 20 foot equivalents.
On order we have 68 ships and you can see the sizes, 5,250, 6,000, 5,700, these are big ships for a total of 95. Now who is building them? Well, 15 are coming from Hyundai in Korea, 12 from Hanjin in Korea, 12 from Maersk in Copenhagen and the 11 from APL which was just purchased by Neptune Orient Line. So you can see the major players that are bringing these ships into the waters and the next stage will be for a larger ship, even larger than these.
The next thing they are looking at now which is on the drawing boards, 7,000 to 8,000 TEU ships. What will it require? You are dealing with high cargo volumes so assuming a ship came here and totally offloaded its cargo of 8,000 TEUs, you would need 19 trains to off-load that ship, 10 double-stack trains. That will give you an idea of what you are dealing with if you are a destination port.
As I said earlier, long distances with fewer port calls, sophisticated cargo planning, everything would have to be computer-controlled, and highly efficient port terminals with significant intermodal capability so you can feed vessel or inland transport. So theoretically, a ship could stop here, offload its full cargo, we would have the rail on the terminal to go inland, we would have feeder vessels alongside to take the feeder cargo down the coast or wherever it is going and that would all have to work in sync.
[1:30 p.m.]
In terms of the container volume for the Halifax Port Corporation, we are targeting one million TEUs. Right now we have 460,000 so we are looking at doubling our business. We are saying by the year 2005, which really is not that far away. You can have a stretch target of 1.2 million. That is realistic. We think it is attainable and that is what we are striving for.
There has been a lot of discussion lately about the Maersk and Sealand proposal. If you remember where Fairview Cove container terminal is in Bedford Basin, we looked at a site here along the Rockingham Shore. The rationale for that is based on a number of factors, primarily operating factors. First of all, you have the main CN Rail line coming right here
along the shoreline, which is very attractive for any container terminal. You want the rail as close to the terminal as possible. So they could put a spur line into the terminal anywhere along this area. Of course, in conjunction with Fairview Cove container terminal, you have economics of scale. The train would make one stop, load up from the two terminals and away it goes.
You have very deep water. We go out here about 1,000 feet and you have 52 feet of water which is what Maersk and Sealand - they have asked for at least 50 - but we can give them 52. We can give them 60 feet, if they want. Water depth is no problem in Halifax. As a matter of fact, it is our greatest asset, our greatest attribute, except when you have to fill it and then it becomes a liability. To create land in Halifax, you have to fill this area here which is fairly deep. In some places it is over 40 feet deep, so that takes a lot of fill.
Another attribute is that within Bedford Basin you have a natural protected environment from winds and currents and tides and everything else. We all know we have no ice here and that is one of our major selling features as well. Maersk and Sealand representatives came here in June and we gave them a tour of the site. They were just totally overwhelmed at what they had seen here. There is nothing there that you have to remove. There is deep water, access to the railway, it is protected, and the main channel in Halifax Harbour has a minimum depth of 60 feet. So we are well on our way to becoming a post-Panamax hub here.
That is another angle. You can see how long this could be in the proposal. As all of you know, Maersk and Sealand talked about a 6,000 foot pier and we can get 6,000 feet here, no problem, which means it is three times the size of the current Fairview Cove terminal if, in fact, that is what they wanted, and that is to be discussed and debated. It could be phased in.
It gives you an idea of the shoreline we have for that development. Of course, this is the kind of terminal that they are going to put there, the technology advanced terminal, state of the art, space-age terminal. This is a joke, of course, but it has to be, according to Maersk and Sealand productivity has to be very high. They want no queuing, no waiting with their ships. It may, in fact, be a 24 hour operation and, you name it. It will be all post-Panamax cranes and so on.
I think that is all I have here, so, Mr. Chairman, that is it for the presentation.
MR. CHAIRMAN: Mr. [Merv] Russell, would you have anything you wanted to add?
MR. MERV RUSSELL: Nothing whatsoever.
MR. CHAIRMAN: We will take questions.
MS. MAUREEN MACDONALD: Thanks, that was really informative. I guess, then, what you were saying at the end there, the attributes that you were referring to - no ice, water depth, shoreline, access to rail - that is our competitive advantage? Those are the things that . . .
MR. BELLEFONTAINE: Right. Also the Canadian costs of labour, primarily, vis-a-vis U.S. We have a real advantage there. The cost of construction today, in Canada, is much less than what you would face in the U.S. for the same sized terminal, if you are competing on equal footing, in terms of cost. Those are our key advantages, yes.
MS. MAUREEN MACDONALD: Just one other question. The last part, about the larger container ships on the horizon. What does that mean, on the horizon? Is there a projected date for when we can anticipate this?
MR. BELLEFONTAINE: We have about 20 shipping lines that come to Halifax. If you talk to 20 of them, which we do, you'll get 20 answers and that's the difficulty in port planning. Some of the lines have these large ships on the drawing boards right now, some aren't even considering post-Panamax ever, so you're into that kind of a situation where you have to try to make the best decision you can and move forward.
Our position is that if you're not ready for post-Panamax, you will not get any ships. So you have to move forward, but you've got to do it prudently and you've got to do it on a self-sufficient basis.
MR. CHAIRMAN: Mr. Archibald.
MR. GEORGE ARCHIBALD: We have met with a lot of groups. One of the groups we met with was talking about the port and they were indicating that they would rather have seen the Port Authority on the Dartmouth side rather than Fairview Cove. I am just wondering, why did you choose Fairview Cove instead of the Dartmouth side?
MR. BELLEFONTAINE: Well, it is obvious that group didn't do their homework.
MR. ARCHIBALD: That's right.
MR. BELLEFONTAINE: We have done our homework on that. We've hired consultants to help us with that. What didn't come out in the study was that it will cost $200 million for the railway, to bring the proper rail to Shearwater, and the question was who is going to pay for that? That's before you even start constructing a terminal. Other issues that relate to that is that you have to do a lot of dredging at Shearwater and, as far as I know, the marine side, the land side, it is not readily available.
MR. ARCHIBALD: It is full of houses.
MR. MERV RUSSELL: . . . to the effect that it is not available from the Minister of Defence.
MR. BELLEFONTAINE: Right.
MR. ARCHIBALD: The railway is critical to this port. Has the railway been working with you on this proposal, to bring their costs down so that it is cheaper and quicker to get to Chicago?
MR. BELLEFONTAINE: I know there have been many stories out there about the railway with its own proposal, but what I can tell you is that the railway has worked with us on our proposal right from May 1st, from the date go, from the carriers. CN is part of our proposal and I know they have given rates to the carriers with respect to that service.
MR. ARCHIBALD: One of the other things that somebody was mentioning the other day was the people that are living out near the new proposed terminal, they were concerned that people may find that it is noisy and so on and they wouldn't like to live there any more. How real is that problem going to be? Have you people canvassed the local residents and the university to see if they are going to be marching up and down the road and holding things up, or are they anxious to see the new development?
MR. BELLEFONTAINE: We have actually met with Dr. Sheila Brown at the Mount and gone over the proposal with her. She had some concerns, obviously, but not about noise, more about the perception that light would affect the residences, and today the lighting on terminals, it is the state-of-the-art lighting and you can redirect it to anywhere you want. I know an award was won at the Fairview Cove Container Terminal back in the mid-1980's for the lighting on that terminal. Noise was not a concern. Lighting was one issue and, of course, the safety of staff and the students was another issue that she raised because the perception - which I think is an old perception - is that the port environs brings certain characters and, today, you know I explained to her that today the port is completely fenced in. We have security 24 hours, around the clock. We have the HRPS, police, under contract and I would suggest you would have more security with the terminal being there because we have police there all the time. It has changed since the 1930's and 1940's when that, in fact, was real, but there is still that perception that waterfronts bring secondary-type individuals.
We have not met with the residents yet, George, and the reason is that we wanted to get enough information that we could take to the residents through a public meeting, that we will be able to answer their questions and, as we speak today, we're getting the geo-technical work done now on that site. We are doing some bore sampling to find out what's there. We're looking at the fish habitat to see if there is any effect on fish. We don't expect there is but we have to find that out. When that's ready, then we will be calling a public meeting with the residents to explain to them what the proposal is and how we would proceed, assuming we get the green light from the carriers.
MR. ARCHIBALD: In the last couple of weeks we've been seeing, the federal government is going to be making some pretty substantial layoffs in the Coast Guard service out of Halifax. I am wondering whether the shippers are going to find, you know, are they concerned that there is going to be less service and there won't be the ice-breakers, you know, the wintertime ships that could go out and help them if there is a problem? Are your shipping people concerned about the Coast Guard layoffs?
MR. BELLEFONTAINE: To tell you the truth, nothing has been mentioned to me about it at all. If there is a concern, they haven't mentioned it, not a word.
MR. CHAIRMAN: Mr. MacAskill.
HON. KENNETH MACASKILL: A couple of things, if I may.
MR. BELLEFONTAINE: Yes, sir.
MR. MACASKILL: I wanted to thank you for your presentation. Earlier on you mentioned about the ocean rates being low. Was that because of the volume moving, bigger ships, or what brings it down?
MR. BELLEFONTAINE: No. It is because of competitive pressures from around the world.
MR. MACASKILL: But isn't that caused by bigger ships moving larger volumes?
MR. BELLEFONTAINE: I guess it is the chicken and the egg, what comes first, and what apparently came first was the competition from other carriers. That drove the carriers who had to compete into creating, into building larger ships for economies of scale. They tried to raise the rates but they couldn't. So now they have these large ships with what we call lower slot costs, which means the carrying capacity of the ship per box is lower, and that's how they are competing today.
But as a result, they are not able to get their rates up because - it gets a little complicated - but you get what we call a conference, a trans-Atlantic container conference, and there are a number of lines that join that conference. It is like a cartel and these lines usually have, it is not price-fixing, but it is price equivalency, which means each one charges pretty well the same rates. It is like the airlines in Canada. They pretty well charge the same rates. So it is competitive.
Then you have non-conference carriers who come in who do not have to apply the same test to their costs and they can charge lower than conference rates and, as a result, they get some traffic. They are buying market share. The question is how long can they last. But
as a result of that, when the conference carriers lose some of their volume because of the other carriers, then they have to lower their rates and it is like a vicious circle.
MR. MACASKILL: The tonnage in 1965, say, to 1995, have you any idea what that . . .
MR. BELLEFONTAINE: It is phenomenal. It is at 300 per cent, I mean easily. Our traffic is up 100 per cent in the last 10 years, just at Halifax. We were on the short end, I would say, on this coast because the Trans-Pacific route was the route that really grew in the last 10 years, not the Atlantic route. As I said, we increased 100 per cent. So some ports, some carriers, have their volumes going up at least 300 per cent on the high traffic routes on the Pacific. But more traffic, it did not necessarily mean, it meant more revenue but at lower rates and with the capital costs of these ships being $150 million or more, . . .
MR. MACASKILL: That is the price of an oil rig?
MR. BELLEFONTAINE: That's right.
MR. MACASKILL: The Maersk Regina, how many feet or metres in water?
MR. BELLEFONTAINE: It is 1,100 feet long and its rated capacity is 6,000 TEUs or 20 foot containers but, in fact, it can carry 6,600. So that's what Maersk is promoting now, 6,600 because it is a marketing . . .
MR. MACASKILL: How many feet of water does it draw?
MR. BELLEFONTAINE: About 42 feet. That is not fully loaded. If it was loaded with bunkers, you're getting close to 48 feet to 49 feet of water.
MR. MACASKILL: So in your opinion, the 60 feet in our harbour, if they keep on building larger ships, will we run out of water compared to the six ports in the United States?
MR. BELLEFONTAINE: No, we will not run out of water because they cannot continue to build deeper draft ships. There is a breaking point and they're pretty well there. If they build ships that go down 60 feet of water, there will be two ports in the world that can handle them - Halifax and Sydney - and that's fine, but I don't think that's reasonable or likely. They are pretty well at their maximum in terms of depth. So what you will see is the ships getting wider and longer and not basically drawing more water. They just can't.
In the U.S. they have major problems with dredging. First, there is the cost of dredging, which is in the billions and, secondly, they have a problem with the disposal of dredged material, which actually works in our favour because a lot of the ships that call Halifax, most of them also call New York or Norfolk.
MR. MACASKILL: To get back to the Coast Guard, these are ships that never use Coast Guard services, are they, in terms of ice-breaking or . . .
MR. BELLEFONTAINE: No, the Coast Guard have to pass these vessels when they enter Canadian waters. They look at their inspection reports, and they may do an inspection of the ship, but other than that, no, they are not involved in these commercial ships at all.
MR. MACASKILL: Thank you, again, for your presentation.
MR. CHAIRMAN: Mr. Taylor.
MR. BROOKE TAYLOR: When the Marine Act kicks in in earnest, if you will, on January 1st, the port will come under the Halifax Port Authority and our caucus office has received correspondence and considerable communication from the Halifax Chamber of Commerce, the Halifax Longshoremen's Association, the Halifax Shipping Association, et cetera, that they feel port users and some local interests won't be well represented on the Port Authority. I am just wondering if perhaps, Mr. Bellefontaine, you would have any comments regarding their concerns?
MR. BELLEFONTAINE: Well, in terms of the Port Advisory Committee, no, because I am not on that committee.
MR. TAYLOR: You are not on the advisory committee?
MR. BELLEFONTAINE: No, I am just a resource person. I don't know if Merv wants to respond.
MR. MERV RUSSELL: I am on the Port Advisory Committee.
MR. TAYLOR: I wonder then, Mr. [Merv] Russell, perhaps you could shed a little light on those concerns. We have heard, for example, that Mr. Collenette may be abusing his veto power. I am just kind of the messenger at this point, but those are some of the concerns we have had raised.
MR. MERV RUSSELL: I am not the chairman of the Port Advisory Committee, so I don't think it would be appropriate for me to suggest what is going on at those meetings that we have held or give any details of it. There is a great deal of misinformation going around.
MR. TAYLOR: A great deal of misinformation. Well, perhaps I could ask this question then. The grain elevators and related infrastructure, what is the future status of the grain elevators?
MR. BELLEFONTAINE: We have a lease with a private company called Halifax Grain Elevators Limited and it goes into the 21st Century. Between the province, ourselves, the grain elevator and the Canadian Grain Commission, we have just invested $4.8 million and we are going through a five year program of upgrades. We are not quite complete, but when that is complete, that grain elevator will be in pretty good condition. The plan is, of course, to keep it running. They are making money. We are getting paid, so everyone is happy.
MR. TAYLOR: Are they being utilized at present?
MR. BELLEFONTAINE: Yes, indeed. Most of it is utilized for local feed grains for the farmers in Nova Scotia. When the At and East Grain subsidy was removed in 1989, our export volume dropped almost by 100 per cent, because the rail grain came in on a subsidy, as it did on the West Coast, and our grain was cut in half then, because we no longer export. If we do, it is very limited, the odd shipment, and most of it, therefore, is domestic. It is being used well. It is certainly not at capacity, but it is paying its way.
MR. TAYLOR: Now the Rockingham shore, regarding if you get the green light to go ahead from Maersk Sealand, where do you see the fill coming from?
MR. BELLEFONTAINE: There are many sites in Waverley, actually, and we are hoping that the fill would come in by rail and, therefore, we would not be in the truck volume at all. That could come down by rail. Fill could even come in by water. Giving an example, in Singapore, they are building a 30 million TEU port, if you can believe that, and they are bringing fill in by ship from Malaysia. That is a very cost-effective way to do it and environmentally improved, of course.
MR. TAYLOR: I am wondering why, I know in the past the fill came in by truck and there was a rail line in Burnside, not that far away, so to speak. I guess now it is more or less a consideration because of the economics.
MR. BELLEFONTAINE: Economics and of course the environment. If we can bring it in by rail, that would make a lot of sense.
MR. TAYLOR: I just had another couple of questions. The Halifax Port Corporation, when the Marine Act kicks in on January 1st, will the corporation continue as a functioning entity in association with the new Halifax Port Authority?
MR. BELLEFONTAINE: No, one replaces the other. When the Canada Marine Act is proclaimed, whatever date that is, it may be January 1st, we don't know, we are assuming it is, then the Halifax Port Corporation will be dissolved or replaced actually by the Halifax Port Authority and the new legislation will kick in on that day.
MR. TAYLOR: Being on the present corporation and not on the advisory committee, I am just wondering if you are aware that the three groups I mentioned earlier, the longshoremen, the shipping and the Chamber of Commerce have made some recommendation that the membership, in fact, be increased from five to seven. Their concerns are that port users and local interests may not be represented as such. Are you at least aware that those three groups have concerns?
MR. BELLEFONTAINE: Yes, I have got copies of their letters. I am aware of it, yes. I am sure everyone else does too.
MR. TAYLOR: That is fine, Mr. Chairman.
MR. CHAIRMAN: I have a few questions if nobody else is quite ready. I was just wondering if you could give us an update on the state of play of the post-Panamax bid and where that is at?
MR. BELLEFONTAINE: As you know, it started in May and by July 1st we had to have our first submission in, which we did. The feedback that we got at that time was that it was a very professional, credible submission and then we advanced to the second phase. The second phase was primarily the financial package. That was submitted on August 14th and it was well-received by the carriers. We have had a meeting since then, of course, where we basically debriefed them on the full package.
The next stage is that they will determine a short list and we expect that will come to us by mid-November. So hopefully, within a week, we will know whether or not we are on the short list and if we are on the short list, then they will enter into negotiations with the short-listed candidates because I expect there will be more than one. A decision could be rendered as early as the end of the year. They are a little bit behind. When they asked for these proposals I don't really think they understood what they were asking for, the magnitude and the volume of work and the analysis that they would have to go through. They have been into this since July and August and they are a little bit behind.
That is the plan, to have a decision by the end of the year and, as I said, I don't think there will be one port selected, I think you will see more than one.
MR. CHAIRMAN: I guess that leads to my next question. What do you expect the length of the short list will be? Are we talking two ports or three ports?
MR. BELLEFONTAINE: I don't know. I mean I could give an educated guess, it could be three ports, but I don't know.
MR. CHAIRMAN: And there seems to be a lot of speculation around the idea that there are going to be two North American super-ports . . .
MR. BELLEFONTAINE: I think there will be more than that.
MR. CHAIRMAN: You think there could be more than that?
MR. BELLEFONTAINE: Yes, I think there will be more than that, in my opinion. It is very difficult for carriers to leave New York. New York is a drawing card in itself and it always will be because of the consumer demand that is there. That is the hub on the East Coast of North America and the ships will go there one way or the other, either not fully loaded, which means they can draw less water, or they will feed New York with feeder ships from Halifax, for example, but I don't think they will leave New York. No, the other question is, who are the other players going to be. We are hoping we will be one and there likely will be another one.
MR. CHAIRMAN: And New York has a problem with bedrock at about 45 feet, as I understand it, is that right?
MR. BELLEFONTAINE: Yes.
MR. CHAIRMAN: So if they are going to get fully loaded post-Panamax ships they are going to have to actually blast their harbour bed?
MR. BELLEFONTAINE: I don't think you will see that.
MR. MERV RUSSELL: You won't see it, it is a seven to eight year project before it could be completed and the latest estimate we heard while making visitations recently was $75 American per cubic yard. It is a billion dollar project so the post-Panamax ships will be well in service by that time. One must not forget that the Maersk Regina that was here on Tuesday is transiting New York probably now.
MR. CHAIRMAN: But because it is offloaded and is not drawing as much water?
MR. BELLEFONTAINE: Right.
MR. CHAIRMAN: And that is the other possibility for the post-Panamax super-port here as a trans-shipment point, as I understand it?
MR. BELLEFONTAINE: That is correct.
MR. CHAIRMAN: So the attraction for the super-port is that not only do you get the post-Panamax traffic but you also get all the associated traffic for trans-shipment.
MR. BELLEFONTAINE: That is correct, feeder traffic. That is right.
MR. CHAIRMAN: Did you have questions? I have other issues that I would like to come back to.
HON. FRANCENE COSMAN: Thank you. I appreciate the presentation you have made. It boggles the mind to try and envision the size of these ships, and as they grow in length, do they grow in height? I am just curious about how close they are to the bridge deck, as they go under our bridges.
MR. BELLEFONTAINE: We have done some work on that. It is called air draught. We have sufficient air draught to allow the ships to go through.
MRS. COSMAN: So the bridge doesn't start to vibrate and dump all the cars over?
MR. BELLEFONTAINE: No. I don't think you have to worry about that.
MRS. COSMAN: Coming back on George's point around community impacts, and there are obviously going to be community impacts in this. What do you put in place to try and hear the voice of the communities engaged in this process? There are impacts from night-time operations, and it isn't just the bright lighting, it is the beep-beeps on the equipment as they back up and all the other associated noises. To be proactive, how would you envisage that you could engage the affected communities around letting their concerns be heard, and trying to answer some of those concerns?
MR. BELLEFONTAINE: As I said, we are going to have consultation with the community through public meetings, that is the first step. We want to have the information that will allow us to answer the questions in terms of questions like you have. How are you going to mitigate the noise? There are ways you can do that, you can put a tree line around the terminal, if you have to. There are ways to do these things. One question was about the lighting, and I am sure we can deal with that.
There will be noise, there is no doubt about it. Maersk and Sealand have said that it could be a 24-hour operation, whether it will be, we don't know yet. We don't even know the size of the terminal yet. We are looking at various stages. That is why we really can't meet with the public, we don't have the answers, but the thing is to meet these people, find out what their concerns are, and try to mitigate those concerns as best we can.
To be realistic, you will not mitigate every concern. There is no way. But when you look at, in terms of a question about house values, how many houses in the South End have depreciated as a result of the Halterm facility? I can't name one. (Interruptions) Young Avenue, Point Pleasant Drive, no. These people aren't complaining, and they are very close to the container operation. I think that is one example.
I know people are going to get concerned, and you may get some people who get hype over this, but you have to look at what is happening now and translate that to Rockingham, and say we are going to have a similar operation, and probably with better lighting, it is more current, and hopefully less noise.
MR. MERV RUSSELL: I think it is probably appropriate to say, if we hit the short list, we will be very proactive with public meetings.
MRS. COSMAN: I am sure that is quite true. I think you, Darrell, probably asked some of the questions that I had pencilled down, so I will turn it back over to you.
MR. CHAIRMAN: Mr. Taylor had a question first.
MR. TAYLOR: I just had another question there. The proposal you submitted to Maersk Sealand based on the present financial situation regarding that proposal, there seems to be a little misunderstanding or at least some differences of opinion regarding whether or not you could proceed or not proceed with or without federal financing. What is your take on that, both of you?
MR. MERV RUSSELL: There is no question that it would be inappropriate for us to discuss the financing package at this stage, while it is still in competition, but I can assure this committee that the financing is in place.
MRS. COSMAN: Just say that a little louder.
MR. MERV RUSSELL: The financing is in place.
MR. TAYLOR: I appreciate that, and I didn't expect you to get into detail. If you are awarded the contract, the pier will be built.
MR. MERV RUSSELL: We can meet the day.
MR. TAYLOR: Okay.
MR. CHAIRMAN: When we had our tour, of course, there were many different kinds of operations there. Certainly, I think everyone was impressed with seeing the new forest products shed, and how the handling takes place in that facility, as opposed to what is happening in the bulk sheds, for example. It is certainly quite fascinating. When we were there, there was rubber coming in from India, it just gives you some sense of the life of the port, but I must say that I felt that there was some nervousness around the Halterm facility. Maybe I just imagined this, but if the super-port is built, the Maersk Regina is not going to be at Halterm, it is going to be up in Fairview Cove, so there is going to be a reallocation of who is actually handling that container traffic. There will be an increase, because of the
volume that is coming through, but all of the cargo that is coming won't necessarily be new cargo. Some of it is going to come off the wharves of one operator and onto the wharves of another. Is that a legitimate fare for operators like Ceres or Halterm?
[2:00 p.m.]
MR. BELLEFONTAINE: Well, I can answer that. It is only a small amount of our total cargo that will be diverted and there is no doubt Maersk and Sealand traffic that now call at Halterm will be shifted but nothing else is anticipated to be shifted. Maersk and Sealand are calling for an exclusive use operation and not a common-user, which means it is for their cargo only.
MR. CHAIRMAN: So if you are at 460 TEUs this year, what increase in TEUs does getting the super-port contract actually mean?
MR. MERV RUSSELL: It depends on how much of if you get, of course, and . . .
MR. CHAIRMAN: But there must be minimum volumes, right?
MR. BELLEFONTAINE: Well, everything is being negotiated. It is significant.
MR. MERV RUSSELL: There are other people going after other pieces. It wouldn't be appropriate to give a number at this stage. It is pretty easy to figure out.
MR. CHAIRMAN: Some of those numbers have been out there already . . .
MR. MERV RUSSELL: People are talking 390,000 boxes or 390,000 TEUs.
MR. CHAIRMAN: So it would almost double the size.
MR. MERV RUSSELL: If Maersk Sealand came back and said we can only give you 220, would we turn it down? No.
MR. CHAIRMAN: Mr. Archibald.
MR. ARCHIBALD: When you get this contract and the big post-Panamax cranes are in Fairview, the other companies that are calling on the port eventually will all have post-Panamax ships, I would think.
MR. BELLEFONTAINE: No, there are several who will not get into that trade because the countries they call at are not in that trade. It most likely would have to be a two-way trade.
MR. MERV RUSSELL: One of our largest lines, Zim, have not committed to a post-Panamax ship. I think their limit is 3,800?
MR. BELLEFONTAINE: Yes, 3,800 TEUs.
MR. MERV RUSSELL: That is a maximum. I think they have built six of them.
MR. ARCHIBALD: Really, so the other companies are just not going to do it?
MR. MERV RUSSELL: A number of them want to use the Panama Canal.
MR. BELLEFONTAINE: That's right. Therefore, that restricts their size.
MR. ARCHIBALD: So we won't run into a problem of having to put larger cranes in the other two terminals?
MR. MERV RUSSELL: Likely that will happen in due course. The information we have is that the other lines are a few years behind Maersk's move to have post-Panamax entered into the fray now. We are not looking at another container ship coming in from another line next year.
MR. ARCHIBALD: Three years ago, nobody really thought Maersk was going to be where they are today. I don't think they did, anyway. Five years ago they didn't.
MR. BELLEFONTAINE: But the expectation is that other lines will not follow until a few years but, hey, check the clock tomorrow. This is the problem when you deal with these companies' it depends on the day of the week that you get an answer.
MR. MERV RUSSELL: Mr. Archibald, we had the consultants two years ago tell us the year was 2003 and we have had two post-Panamax ships this year.
MR. ARCHIBALD: Already, yes.
MR. BELLEFONTAINE: It is very difficult to predict when the companies don't know themselves. I just came back from a trip to Asia. I sat down with all the carriers and it is interesting to try to find out from them what their plans are. A lot of them don't know.
MR. ARCHIBALD: When CN starts handling more railcars and their price comes down and it becomes a little more competitive than it is even now, will we see some more container traffic diverted from Montreal to Halifax?
MR. BELLEFONTAINE: I hope.
MR. MERV RUSSELL: There is a very good chance of it - and it is best that CN speak to this point - but the real savings is in the extra length of the train. That train that David was referring to is 241 sets of trains. They are two miles long; trains going out of here are a mile long. When they get to Montreal, they can become two miles long, so some work has to be done between here and Montreal. The economies of scale would come into play once you get up to a 9,000 foot or 10,000 foot per train, double stack.
MR. BELLEFONTAINE: Maybe I could comment on that as well. The traffic that Maersk and Sealand would bring here is very attractive for the Midwest. Nobody could beat us on the Midwest route. If they call Halifax first inbound, we can beat any port on the United States East Coast, including Montreal on the Midwest. So that is going to be a major focus.
Will traffic divert from Montreal? Maersk and Sealand currently call at Montreal, so the question is, will they take that service off and bring it here? We don't know. It is likely, but we don't know for sure. They will not put all their eggs in one basket; carriers do not do that.
MR. MERV RUSSELL: Also, it is getting closer to a level playing field with the marine services fees, ice breaking has been a gift to Montreal and, this year, they start to pay.
MR. MACASKILL: Back to the beginning. Once we get our foot in the door hopefully, and we become a post-Panamax terminal, we will become a proven destination for even larger ships, which can carry more cargo at a lower rate.
MR. BELLEFONTAINE: Right, yes, that's right.
MR. MACASKILL: What happens if we don't? The rates will be low, will they? Will the rates stay low, wherever the terminal goes? Will that create great hardship for us?
MR. BELLEFONTAINE: If we do not succeed in getting this account?
MR. MACASKILL: Yes.
MR. BELLEFONTAINE: The question is then, will we lose the Maersk and Sealand business that Halterm currently has? That is possible, but the carriers, as I said, will not put all their eggs in one basket, they would still like to call at a Canadian port. We are the only viable Canadian port for Maersk and Sealand because we are stuck out there in the Atlantic Ocean and they are going right by our door en route to New York. So there likely still will be some business from these carriers, but how much, we don't know. The slot costs will go down and the ports at which they call will become more competitive, absolutely, for that carrier. They are only one of many, there are about 50 major carriers in the world. Maersk and Sealand is only one, but a large one, mind you, and they tend to lead the way.
MR. MACASKILL: How confident are you?
MR. BELLEFONTAINE: I am quite confident that we are going to get some business. In terms of how much, it is anyone's guess. Hopefully, in one month's time, we will have a better indication.
MR. TAYLOR: During Mr. Bellefontaine's presentation, he indicated that one of those mega-container vessels would take 19 trains or something to unload them. I am just wondering, with the increase in train traffic and larger vessels coming to the port - I know you have done a lot of studies and surveys - I would think it would positively impact on the trucking industry, but I am wondering about commercial highway traffic volumes, have you any sense regarding how the commercial traffic would be impacted on this province's highways?
MR. BELLEFONTAINE: Virtually none. The Maersk and Sealand business is international business. The traffic that would come here is destined for the United States Midwest, for Quebec, for Ontario and for the Tri-states of New York, Connecticut and so on. So there is virtually - I am not saying none - no increase in domestic business. We handle about 20 per cent of our business for the Maritime Provinces now. That will not increase, because that traffic is not coming into New York now and being trucked up to Nova Scotia. What is going into the Maritimes now comes through Halifax, primarily. So virtually none, in terms of extra truck traffic as a result of this account, which is good news for the Fairview residents.
MR. TAYLOR: I find that a little strange because I know that the transport company I worked for used to move a fair number of containers, for example, to Kansas City, for Maersk. I would think if we attracted . . .
MR. ARCHIBALD: Are you kidding . . .
MR. TAYLOR: I am not kidding, no.
MR. ARCHIBALD: Why didn't they put them on a train?
MR. TAYLOR: Because they needed them there on time, so they got them on a truck. So that is a little bit perplex but, nonetheless, that is fine.
MR. BELLEFONTAINE: There are changes that have been made. CN has just purchased the Illinois Central Railway, which can now service Kansas City right down to Memphis, right down to the Mexican border. So there is better railway access.
MR. CHAIRMAN: Mr. Bellefontaine, I can't help recounting this story. There was the head of the New York Port Authority at a breakfast meeting who stood up and said - I think it was words to this effect - we will not rest until our coffee and orange juice is safe from the Port of Halifax. The point being that these things are coming into the port and they know, and this is what I am told, that we are a day earlier to Chicago and into the Midwest, a big advantage. All of this though is technology-sensitive. You talked earlier about the technology-advanced terminal. The problem with technology is what is state of the art, today, is antiquated tomorrow and I guess my question is, given the investment that you're going to have to make in this kind of an advanced terminal, what is the projected lifespan and is it worth the investment?
MR. BELLEFONTAINE: Well, the minimum lifespan should be 25 years; that's what we would be looking at in terms of a commitment, 25 years. If any of us could see beyond that, you have a better crystal ball than I have got, but in terms of technology, there are continuous changes to the technology and now, in the port, everything we do is computerized. The bills of lading are issued, let's say in Europe, and the date is entered in Europe. It could be Rotterdam, it could be anywhere and we get it electronically in our computer and it is processed without human touch; we get our bills out, our invoices, and the statistics and so on. So that's the kind of thing that is becoming commonplace now. In terms of the cranes, these new container cranes are all operated by computers. So you have to be a computer expert, basically, to operate a crane today and not really a crane operator like we knew of in the 1960's. It has completely changed.
MR. CHAIRMAN: I just have a couple other things I would like to touch on. As you probably gathered, this is one of my very great areas of interest. When you talked about the administration of the port, I guess I wanted to know how far that goes? You don't deal with questions like flags of convenience, for example, or do you?
MR. BELLEFONTAINE: No.
MR. CHAIRMAN: And pilotage fees and those sorts of things?
MR. BELLEFONTAINE: No. That's a separate Crown Corporation, the Atlantic Pilotage Authority. The tug company is a private tug company. We work with them very closely, mind you, but we're not in control of it.
MR. CHAIRMAN: I understood, for example, to bring the Maersk Regina alongside is something in the order of $4,000 or $5,000?
MR. BELLEFONTAINE: Yes. That's the pilotage fees. We don't charge for that. We charge when it gets alongside. The clock starts ticking then but that's standard, if I may add, that's standard around the world in terms of pilotage fees. Halifax is, I can assure you, not the most expensive pilotage port. On the West Coast it is three times that much and in the St.
Lawrence, it is probably 2.5 times as much because they have three pilotage locations. As the ship goes down the St. Lawrence, they have to change pilots twice. So that's to our advantage.
MR. MACASKILL: Who pays for the ship if it can't dock because of no room? Is that your responsibility?
MR. BELLEFONTAINE: No. Actually the operating costs of a ship could be $50,000 a day. That's borne by the vessel. The only way it wouldn't be is if they had a guarantee from the terminal operator, the private-sector company, for a guaranteed dock and then that terminal operator would be responsible for that cost or a portion of it thereof but it is borne in most cases by the shipping line, the carrier itself and, again, that's pretty normal around the world.
MR. CHAIRMAN: Other questions? Well, seeing none, I would like to thank you both very much for coming this afternoon and providing us with the presentation and answering the committee's questions. It certainly was informative. I know we will all be looking forward to the result of the Maersk bid and, hopefully, success in that venture.
MR. BELLEFONTAINE: Thank you very much. It was nice to be here.
MR. MERV RUSSELL: Thank you.
MR. CHAIRMAN: If there's nothing else, we stand adjourned until the next meeting. (Interruption) The MAI meeting is still being set up for later on this month. We are still trying to negotiate time for that. (Interruptions)
We are adjourned.
[The committee adjourned at 2:15 p.m.]
