Churchill (Feb 26/03) - A 28-year-old business relationship has come to an end.

The Northern Transportation Company Ltd. (NTCL) has announced it will no longer deliver dry goods to the Kivalliq region from the port of Churchill, Man.

NTCL president Clifford Abraham said the company exhausted every alternative before making its decision.

"It's natural to never want to give up, so we examined every angle we could to try and make this work," said Abraham.

"But, at the end of the day, we had to admit to ourselves that it just wasn't a viable proposition.

"As unfortunate a decision as it is, it was one we had to make."

NTCL has transported cargo to the Kivalliq for the past 28 shipping seasons.

The decision to cease the operation affects 34 jobs, the vast majority of which are seasonal positions based in Churchill.

Also affected are the crews of the barge vessel and a regional manager in Rankin Inlet who is not being offered another position with NTCL.

Abraham said the biggest factor in the decision was the loss of the fuel transportation contract NTCL held for the same number of years it delivered dry cargo.

"We had economies of scale with the combination of the fuel and dry cargo business.

"Without the fuel, it became impossible for us to offer a competitive scheduled service from Churchill, based on the anticipated volumes of dry cargo."

Abraham said the government of Nunavut's contract for dry cargo also changed this year, making it unattractive to NTCL as a way to solidify the Kivalliq run.

He said the contract did not guarantee a carrier any substantial or significant amount of business.

"We couldn't make a decision to continue our Kivalliq service based on that contract.

"In the way the government structured its contract, it seemed it didn't want to give any type of preference to any port of exit, be that Churchill or Montreal."

Combined cost too high

Abraham said he's aware some people think NTCL is sailing away from the operation because it couldn't maintain the profit margin it had grown accustomed to.

That assertion, he said, is completely unfounded.

"Our view is that it would have been a money losing operation.

"We have a responsibility to our shareholders, as well as the people in any region where we're going to operate, to offer a competitive service."

NTCL may not be history in the Kivalliq quite yet, however.

Abraham said the company is keeping a close eye on the Meadowbank gold project near Baker Lake.

"We're absolutely interested in that project.

"We retain a marketing-and-business-development presence in Nunavut that's responsible for staying on top of those types of business opportunities."

Rankin Inlet Mayor Lorne Kusugak said NTCL's announcement didn't come as a big surprise to anyone.

He said hamlet council will discuss the matter during its regular meeting on March 3.

"I don't think this is going to have a big impact on anyone who can communicate fluently in both languages," said Kusugak.

"I'm worried about the impact it may have on unilingual Inuit, and/or those who don't have the knowledge or ability to look for suppliers out of Montreal."

Kusugak said 2003 construction projects in the region may be hampered by NTCL's announcement.

He said many people are surprised NTCL didn't put forth more of an effort to win support from Kivalliq hamlets after losing the government's fuel resupply contract.

"We never saw any of NTCL's management team come into the communities.

"They sent their Kivalliq representative, but they would have gained a lot more political clout if they'd sent their heavy hitters into the communities."

Kusugak said another shipping company may step up to the plate and delivery cargo to the region from Churchill.

But first, he adds, a way must be found to reduce the freight costs from Winnipeg and Thompson to Churchill.

"If Churchill wants to be the main shipping port for Kivalliq, companies like Gardewine North have to look at their freight charges.

"They're way too high, especially for being shipped by train which is supposed to be one of the cheapest modes of shipping."