Wednesday, January 9, 2013

British Columbia's coal exporters are onboard the Ridley privatization train

While some groups and politicians raise a red flag over the proposed privatization of Prince Rupert's Ridley Terminals, in some quarters the move to the private sector is getting a green light.

One such nod of approval comes from the coal sector, where the Chairman of the Ridley Terminals User Group has offered up his organizations endorsement of the planned privatization of Ridley Terminals.  With Chairman Doug Smith suggesting that the sale could better position the facility for expansion beyond its plans to double terminal capacity by the end of 2014.

In the opinion of Mr. Smith, speaking on behalf of his organization, the impression is that "the privatization of Ridley Terminals would positively affect their access to capital" adding that "There's the potential to expand beyond current expansion plans and that would require additional capital and presumably a buyer would assess that based on the market demand"

Ridley Terminals is currently in the midst of a major expansion project, and expansion that will double the capacity of the terminal to 24 million tonnes by the end of 2014.

The keys for the user group as far as a potential investor are:

a) A commitment to running the terminal on an open-access basis, which the federal government has promised

b) Providing for mechanisms to protect shipping rates to terminal users

Smith also advised that the users group would want to have a mechanism in place to arbitrate rates in situations where the terminal and shippers couldn't come to an agreement.

Expectations in the shipping industry are that the sale will attract wide interest from coal shippers and companies that run terminals, with the prospect being that the Canadian taxpayers will get a good return on their investment as the Government divests itself of the Terminal.

The full review of how the coal industry sees the proposed sale of Ridley Terminals can be found from this article in Business Vancouver.

Our archive of items on the Ridley Terminals file can be found here.

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