Prince Rupert coal terminal to be sold by federal government
Move reverses Harper's 2006 decision to keep Ridley Terminals
The federal government has decided to sell off the Crown-owned Ridley Terminals in Prince Rupert, a key asset in B.C.'s growing coal export industry.
Minister of State for Finance Ted Menzies says the decision to sell the terminals was part of the government's review of its corporate assets.
Ridley Terminals handles bulk exports of coal and other commodities, mostly to Asia. It is considered a world leader in transferring cargo from railcars to large ships for export.
In 2006, as one of his first acts as prime minister, Stephen Harper halted plans by the previous Liberal government to sell the terminals to an Ontario mining company.
The government says the Ridley Terminals recorded losses in four of five years leading up to 2006 and has required millions in financial support to get it operating properly again.
Last year, the terminals broke records in revenues, profits and volume. It signed 11 new contracts and reduced its debt by 70 per cent.
Feds are motivated sellers
Nathan Cullen, NDP MP for the Skeena-Bulkley Valley, says he suspects the federal government has an overriding motivation to finally sell off the terminals.
"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."
Cullen says with the ink barely dry on the government's sale of Nexen to a state-owned Chinese company, people have a right to be worried about the sale of the key economic asset.
"There's a lot of concern going on in the northwest right now that this one may fall down that path or even worse."
But Minister Menzies promised a controlling interest in Ridley Terminals will not be sold to a state-owned company outside of Canada
The minister says the sale will be handled by the Canadian Development Investment Corporation to ensure that Canadian taxpayers get maximum value, and that any buyer continues to operate Ridley on an open-access, commercial basis.
Coal industry now booming
Ridley Terminals was built in the 1980s at a cost of $250 million, to ship coal from the then-new coal mines at Tumbler Ridge in northeastern B.C.
When the mines closed, the terminal's future appeared uncertain. The federal Liberals said they wanted to sell the operation as it was costing them $500,000 a month in subsidies.
But business has picked up because of China's increased demand for coal, and Ridley Terminal management predicts shipments will increase dramatically in the next few years with the opening of a new mine in Tumbler Ridge.
The Ridley Terminal has an annual shipping capacity of 12 million tonnes. Expansion plans are currently underway to increase that annual capacity to 24 million tonnes.
In 2009 chairman Daniel Veniez was fired as head of the operation, following a run-in with cabinet ministers.
With files from Terry Donnelly and The Canadian Press