City Council turns an eye towards the Ridley Privatization plan

Last Monday's City Council session tackled a number of items of note to start the new year, but as the weeks go by, one item that would seem to be looming on their radar, will be the proposed sale of Ridley Terminals to private interests.

Councillor Joy Thorkelson raised that item of concern at last week's Council meeting, reminding Council of their interest in the topic the last time that the Privatization issue was raised.

At that time, City Council examined and discussed the issue of the day and sided with the Conservatives in the quest to stop the privatization vision in place at that time.

The prospect of the proposed privatization plan of 2009 provided for a united front from across Northern BC's communities, a coalition that seemed designed to keep the Terminal as a public asset.

A few years later, however the Conservatives are putting in forward the process for the sale to take place and the issue again seems destined for conversation at City Hall.

Thus far however, the topic doesn't seem to be generating quite as much energy or conversation as that last time it came up for debate, something that perhaps will change when Council weighs in with some thoughts.

At last weeks meeting, Councillor Thorkelson requested that city staff compile a report on why Council was against the sale the last time it came up for discussion and recommended that Council again take some time to examine the issue further.

The issue of a Ridley Terminals sale seems to pop up rather regularly, it was a newsworthy item in 2005, in 2009 and now again in 2013.

Council members will have their chance to offer up their thoughts at an upcoming council session, after they have had a chance to review that requested report from City Staff .

You can review some of the developments on the Ridley File from our Ridley Terminals Archive.

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.

Ridley Terminals is Back on the auction block...

Like a homeowner who has made a few renovations and spruced up the property a bit, the Federal Government is apparently ready to part company with its investment in Ridley Terminals Incorporated.

With a few years having gone by now from when the Conservatives took power and made for a reset on the Ridley Terminals prospectus, they are now ready to see who may want to pop by and check out the place, take in the view and maybe put in an offer.

The Conservative Government of Stephen Harper announced this week that the marine terminal on Ridley Island is now officially For Sale, with provisions of open access apparently the one caveat between vendor and buyer.

In their press release of December 13th, the background on the proposed sale included the apparent main point of the Government in its quest to divest itself of its ownership stake in the Terminal.

“Moving away from public ownership of Ridley Terminals would align it with other major marine terminals in Canada, which are owned and operated by private companies,” said the Honourable Steven Fletcher, Minister of State (Transport). “Our Government will seek the best value from a buyer that will operate Ridley Terminals with open access on a long-term, sustainable basis.”

The decision to put Ridley Terminals on the market, seems to be an example of the Governments plans to Review all of their Corporate Assets, in this case a high profile marine terminal with a steady supply of product to be shipped worldwide.

It's not the first time that Ridley Terminals has been found in the Buy and Sell listings of wherever major corporations and infrastructure find themselves, a few years back during the Liberal years, the coal terminal was destined for sale, at the time thought to be to Coal Industry interests, but with the change from Liberal to Conservative government that prospectus was closed, the property taken off the market.

In the period since that first attempt at a sale, we've seen a new chairman (farewell Daniel Veniez, hello Bud Smith)  witnessed a rather vigorous expansion plan put in place and heard tale of increased shipments through the Port of Prince Rupert.

With all of that in place, the time it seems is nigh for privatization, the Conservatives apparently of the opinion that the nation has no business, in the business of coal transportation and shipment.

The prospect of a potential sale of Ridley has once again brought into focus the issue of infrastructure and who should have access to and control of the operations on the north coast.

One concern is that the Conservatives may be inclined to sell it of to foreign interests, a vital cog in the transportation network to be shopped off to the highest bidder, whether Canadian or not.

Others are concerned that if put into the hands of the coal industry, the Terminal may become more or less a closed shop to only those companies that have invested in the project, leaving smaller or competing coal companies without access to a shipment point.

Those, as well as any number of other concerns  are of course issues that the Federal Government will have to address, both the local NDP MP, Nathan Cullen as well as the outgoing NDP MLA, Gary Coons were less than impressed with this weeks announcement.

"They're broke. Frankly they are running huge deficits. My only worry is that they are doing this more out of desperation to balance the books rather than this is a smart thing to do right now."-- NDP MP, Nathan Cullen

 “It is a bit of a shocking, surprising announcement. RTI has been a key part of our community for many years and is making money hand over foot, so on one hand it seems a bit weird to sell an asset that is making money,” he said. “You would think that if something was making profit you would keep it under your wing... I guess the devil is in the details, and all we have now is a 10 minutes press conference.”-- NDP MLA, Gary Coons

The last time that the prospect of a privatization of Ridley Terminals came forward, the reaction was quick from the not only the MLA and MP, but from Mayors across the Northern part of the province, as well as from the Mayor and Council of the City of Prince Rupert.

With much concern at the time expressed over the impact, (on the industry and the North Coast) that such a development might have. It will be interesting to see if the last three years have provided for a changing of opinion as Ridley once again goes into the Federal For Sale Inventory.

There was no timeline provided by the Government on Thursday as to when they anticipate any deal to close, though we imagine. that even with the requirement of access that the Government states is a deal breaker, that there will be more than a few competitive bids submitted for consideration to the Canada Investment Development Corporation.

One thing seems certain, we most likely will hear from Dan Veniez at some point in the process, having been inclined to see the Terminal put in private hands at one time, the prospect of the Terminal finally being put into that position is surely something that won't slip under his radar over the course of the next few months.

Northern View-- Federal Government Announces Intention to Sell Ridley Terminals Inc. in Prince Rupert 
CFTK-- Prince Rupert's Ridley Terminals Up For Sale
Vancouver Sun-- Ridley Terminals For Sale
Yahoo News-- Ridley Terminals Users Group Supports Government of Canada's decision to sell Ridley Terminals Inc.
Globe and Mail-- Ottawa puts key B. C. link in Asian trade on the block
Huffington Post-- BC's Ridley Coal Terminal, Federal Crown Corporation, to be sold
Opinion 250-- Ridley Terminals Inc. Up for Sale
CBC-- Prince Rupert Coal Terminal to be sold by Federal Government

For those looking for more background on Ridley Terminals, we have a full review in our Industrial Development Archives.

Updates: Some interesting reviews of the Federal Government's decision in the days following the announcement.

Huffington Post-- How the Government Dethroned a Crown Corporation
Globe and Mail-- Ridley Terminals a lesson for market-interfering governments