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Arctic coast road, deep sea port project back in motion with $7.25M loan agreement

The Kitikmeot Inuit Association plans to take on a 10-year $7.25 million loan from Nunavut Tunngavik Inc. to move ahead with its Grays Bay Road and Port project between the Northwest Territories and the Arctic coast.

Project would see a 227-kilometre road and a deep-sea port at Grays Bay

At the 2020 annual general meeting of Nunavut Tunngavik Inc. in Cambridge Bay, delegates approve an interest-free loan of $7.25 million to the Grays Bay Road and Port project. The Kitikmeot Inuit Association has now officially decided to incur that loan. (Government of Nunavut)

The Grays Bay Road and Port project in Nunavut is now back in motion after being bogged down for nearly two years by COVID-19 and financial constraints due to surging construction costs. 

The Kitikmeot Inuit Association (KIA), which heads the project, plans to take on a 10-year $7.25 million loan from Nunavut Tunngavik Inc. (NTI), the territory's Inuit organization.

"We're ready to proceed," said Stanley Anablak, the president of the KIA, an Inuit regional association that represents Inuit in western Nunavut. 

The project would see an all-weather, 227-kilometre road running northwards from the Jericho mine near the Northwest Territories border at the northern end of the Tibbitt-Contwoyto winter road, to Grays Bay on the Arctic Coast. It would also have a deep-sea port at Grays Bay on Coronation Gulf.

 The project would bring a lower cost of living, cheaper power and improved telecommunications to the Kitikmeot region.

The Kitikmeot association said it did an independent review of the business case for the project to gauge its viability before accepting the loan. It then asked the delegates at its recent AGM in Cambridge Bay, Nunavut, to approve the loan, who did in a unanimous vote. The KIA wanted a grant from NTI, meaning they wouldn't have to repay it, but instead was only offered to burrow the funds.

The loan agreement, which covers 25 per cent of what's needed to get it shovel-ready, should be signed by the end of the month, Anablak said.

The association received a financial commitment from the federal government to cover the remaining 75 per cent of the pre-construction costs needed of up to $21.6 million.

The project would see an all-weather, 227-kilometre road running northwards from the Jericho mine, near the Northwest Territories border at the northern end of the Tibbitt-Contwoyto winter road, to Grays Bay on the Arctic Coast. It would also have a deep-sea port at Grays Bay. (CBC)

Combined the federal grant and the loan from NTI will  help make the western Arctic road and deep-sea port project ready for an environmental assessment from the federal and territorial reviewers.

The loan from NTI is set to be given in two instalments, with the first $4 million handed to KIA within 30 days of signing the loan agreement.

The second part of the loan would be provided within 10 days of the KIA putting in place "certain financial management measures." The agreement says the whole loan has to be repaid by March 31, 2032.

Hiring project manager the 1st step

The first move in that three-year process, Anablak said, will be to hire a project manager.

The project — which the KIA took over from the Nunavut Resource Corp. in 2020 — was initially tagged at $550 million total.

But rising construction costs have since skyrocketed, Anablak said.

"COVID has put a big burden on us so we've been holding off the last 19 months on this project," he said. "Once we hire a project manager, that will be one of his jobs, costing this out."

After that, the task will be to find investors. 

"We've always dreamed of power lines, and internet. We hope the government will step in and make use of our access to connect us," Anablak said.

Linking up with the N.W.T.

Meanwhile, in the N.W.T., an estimated $1.1-billion Slave Geological Province Corridor project, which would link up with the Gray's Bay Road, is in the early planning stage.

The Slave Geological Province Corridor would see a 413-kilometres all-season road constructed northeast of Yellowknife to the western Nunavut border.

In August 2019, the federal government announced it would put up $30 million, and the N.W.T. government would contribute another $10 million to support environmental regulatory reviews and planning studies for that project.

Corrections

  • An earlier version of this story stated the Slave Geological Province Corridor project was a Yellowknives Dene First Nation project. In fact, it is an N.W.T. government project.
    Oct 18, 2021 5:54 PM CT

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