Dave Sullivan
Northern News Services
Yellowknife (Jun 11/01) - The price of goods sent on the Eastern Arctic sealift should drop, because shipping costs have just gone down 18 per cent.
That's because the annual re-supply operation has been privatized. For the past 30 years it was in Coast Guard hands. The federal agency had in turn hired several companies to ship a wide variety of goods North after spring breakup.
Last week the sealift was turned over to a partnership including Northern Transportation Company, which is part of Inuit-owned Norterra, and Nunavut Sealink and Supply.
NSSI is controlled by Arctic Co-operatives, with Montreal-based Desgagnes Tran-sarctik owning 40 per cent.
The contract is for just two years with a one-year renewal option, because the Nunavut government is in the middle forming a transportation strategy.
The partnership, called N3 Alliance, was awarded the contract because "they offered the best value," said John Purdy, corporate services director for Nunavut's Department of Public Works.
Three other companies sought the contract, worth an estimated $3.75 million plus the federal government's shipping costs, which were not available.
The territorial government had asked for proposals, which is different from bids because the lowest-cost submission doesn't necessarily win the contract.
The decision to privatize was part of a devolution of responsibilities from the federal government to Nunavut, says Ross Mrazek, the deputy minister of public works.
This year's sealift, which starts the weekend of June 16, is expected to deliver 15,000 tonnes of goods. Purdy says the most popular items, especially in terms of weight, are building supplies. Diapers, cereal and canned goods are also popular.
Several shippers who work outside of the sealift umbrella may start feeling pressure to reduce their rates, he said.
Under the new sealift arrangement, the average shipping cost will be $250 per tonne, but it will be cheaper -- $205 a tonne -- for shipping to centres like Iqaluit.
Government is the sealift's biggest user, responsible for about 40 per cent of everything sent to the eastern Arctic, Purdy said.
This year four ships will be docking in 12 ports.
