$7.5 million buys entire operation
GNWT got everything from Northern Transportation: land, buildings, boats and barges
Paul Bickford
Northern News Services
Monday, January 16, 2017
HAY RIVER
In mid-December, the territorial government bought the assets of the financially-insolvent Northern Transportation Company Ltd. (NTCL). And the $7.5 million spent by the territorial government bought a lot.
The GNWT now owns all of Northern Transportation Company Limited's assets. Above, a loaded barge on the Mackenzie River. - photo courtesy of Northern Transportation Company Limited |
"In Hay River, everything that they owned," said John Vandenberg, assistant deputy minister of the Department of Public Works and Services, with responsibility for energy, including the new venture with the marine assets.
The GNWT took the action to protect the petroleum product supply chain through bargingfor isolated communities along the Mackenzie River and Arctic Ocean coast, which do not have other economical options for obtaining fuel and other goods.
"Our focus was to acquire all the assets that were necessary to provide this essential service in the Northwest Territories," said Vandenberg.
The assistant deputy minister said that included all the operating tugs - eight of them - capable of being used on the Mackenzie River and into the salt water of the Arctic Ocean, along with a yarding vessel.
"We also acquired a lot of barges," he said. "I think something in the area of 70-plus barges. Most of these are designed to carry both bulk fuel and deck cargo."
The GNWT will be determining how many of those barges and other assets are actually needed to perform the business, said Vandenberg.
"I would say that NTCL had more assets than they needed to actually do the business they were doing, and we will determine as the future unfolds how those assets will be dealt with."
The GNWT's purchase also included all of NTCL's land in Hay River, the synchrolift, the whole shipyard, the deck cargo marshalling yard, the crew accommodation and mess hall complex, the NTCL head office building, and all the cargo handling equipment which includes trucks, loaders, pumps, hoses and more.
"We've got the complex of buildings in Hay River," said Vandenberg.
In particular, he noted the synchrolift is a unique facility that can lift vessels out of the water for maintenance.
And the purchase included property elsewhere.
"We also have a small office and warehouse in Norman Wells but more importantly we have the Inuvik terminal and properties in Inuvik and the old NTCL terminal property in Tuktoyaktuk, which is integral to this operation," said Vandenberg.
During the Companies' Creditors Arrangement Act protection from the Court of Queen's Bench of Alberta under which NTCL operated for much of last year and ended on Dec. 15 with the sale to the GNWT, estimates of the value of the assets ranged from $33.6 million up to $55 million.
In fact, Vandenberg also noted he was told by a major shipbuilder that the replacement cost of each tugboat would be in the range of $15 million apiece.
"You can imagine what it would cost to actually replace this with brand-new stuff at current market value," he said. "It would be phenomenal."
Mayor Brad Mapes agreed the GNWT got the assets at a bargain price.
"They basically got the sale of everything for a song," he said.
"They got it for a pretty rock-bottom price, so there's opportunities for them to definitely make money," Mapes added.
Vandenberg said no decision has yet been made on the organizational arrangement for the assets.
However, the government previously announced it will be reaching out to private sector partners in the coming months to come up with a made-in-the-North marine transportation services solution.
"Maybe some aspects of this or all aspects of this would be contracted," said Vandenberg. "It could be a single contractor, it could be more than one. We don't know yet."
The GNWT official said the government is "vigorously investigating" to determine what the best model would be for the future.
One of the decisions will be a new name for the operation, since using NTCL is out of the question.
"Clearly you can't just call it a pile of boats," Vandenberg joked. "You have to say something. So we're having those internal discussions."
The communities served by barging out of Hay River include Tulita, Fort Good Hope, Lutsel K'e, Sachs Harbour, Ulukhaktok and Paulatuk.
