BY BRENT FREDERICK
Located at the south end of Lake Huron on the eastern shore of the St. Clair River, Sarnia Harbour is seeking to play a key niche role in Great Lakes-St. Lawrence Seaway shipping under the helm of its new owner, the City of Sarnia. The port already handles imports of raw materials and equipment for the substantial local petrochemical and refining centres, but promising heavy-haul business has now emerged as a special target.
The City of Sarnia took ownership of and responsibility for the harbour in March 2014 following divestiture of the port from Transport Canada. The transfer agreement included a contribution of more than $8.7 million from the federal government to cover operational costs and maintain the port’s infrastructure.
“The City of Sarnia is the largest city on Lake Huron and we are now in a position with the ownership of Sarnia Harbour to have control over our own destiny,” says Sarnia Mayor Mike Bradley. “Sarnia Harbour is very much a vital link in being a transportation hub with the twin Bluewater Bridges, CN’s gateway tunnel between Canada and the United States and the 402 Highway.
“Part of (our) development is looking at a heavy-haul corridor that would bring manufactured modules through the community to Sarnia Harbour to be exported both nationally and internationally,” Bradley says.
There are many fabrication shops in the Sarnia-Lambton region that are able to export oversized industrial modules to markets in Canada and around the world.
SIGNIFICANT FABRICATION NEEDS IN CANADA AND ABROAD
A shipping study conducted in and around Sarnia-Lambton identified significant immediate and long-term metal fabrication needs in the Alberta oil sands, the Canadian East Coast and internationally. Developing a dedicated heavy-haul or oversized-load corridor through the city “would allow for the easier, less expensive and faster transport of these large objects to the harbour” for shipment to those markets during the shipping season, says Peter Hungerford, director of economic development and corporate planning for the City of Sarnia. “This would create a competitive economic advantage for our fabrication industries.” These oversized objects can be as large as nine meters square by 45 meters or more in length … too large to travel underneath highway overpasses in Ontario.
“We are in the process of laying the foundation for the creation of this corridor that would allow our fabrication industries to build more modules or reactor vessels and ship them to the harbor,” says Hungerford. “That would increase our wharfage revenue, and at the same time create cost benefits for both the fabrication industries and local petrochemical and refining industries when large vessels are imported into the area,” he continues. “The harbor would assume an even larger role in maintaining and sustaining the economic health of the community.
“If the city did not have the harbour, then we would not be able to undertake this type of initiative. What we are doing is taking the asset that we have and maximizing its benefit for the whole community.”
Developing the heavy-haul corridor means rebuilding and expanding current infrastructure: working with local utilities and road authorities to raise or bury power, telephone and cable lines so that they do not create an obstruction, putting street lights on arms so that they can be swung out of the way as large objects move through the city, and ensuring that underground infrastructure is sufficient to support objects weighing up to two million pounds.
Since divestiture, Sarnia Harbour has also embarked on an electrical service upgrade program to ensure that ships coming into the port have a secure supply of hydro. Two dockside electrical facilities already have been rebuilt, one is currently being rebuilt, and one will be rebuilt next year. “By the time we are done, we will have invested about $1.35 million to rebuild our electrical facilities,” Hungerford says.
Another major initiative will be a maintenance-dredging program in the harbour in 2016. The project will remove an estimated 10,000 to 15,000 cubic meters of sediments not collected when Transport Canada last dredged the harbour in 2012 plus accretion that has occurred since then.
FOCUS ON LONG-TERM SUSTAINABILITY
From a financial and long-term sustainability perspective, Hungerford says that a business plan conceived prior to divestiture demonstrated that revenues from berthage, wharfage and other charges would offset the harbours operating and capital costs. “The monies that we received from the federal government had not been factored into our business plan,” Hungerford says. “From an operating perspective, the revenues derived from the harbour are put into a reserve to ensure its long-term sustainability. The federal monies are being used to operate the harbour and to undertake capital improvements. We have 15 years to spend the federal monies. At the end of 15 years, we’ll still have a reserve of similar proportion to continue to sustain the harbour.
“One of the political imperatives when divestiture of the harbour was considered was to ensure that it could be run at no net cost to city taxpayers,” Hungerford explains. “So, in fact, it is actually creating a net benefit to the city because it creates employment and generates a fair amount of business for many of our local companies.” Ship repair and maintenance is another major industry in Sarnia.
Algoma Central Corporation and Algoma Ship Repair rely on Sarnia Harbour for winter berthage and occasional berthage throughout the shipping season,” says Captain Tom Anderson, director ports and harbors, for Algoma Central Corporation. “The harbour is a well-maintained facility and is suited for ship maintenance and repair.” Cargill AgHorizons Canada is also an active partner in the operation of the harbour. About 600,000 metric tons of wheat, soybeans and corn are exported and some 100,000 metric tons of fertilizer are imported through its Sarnia transfer terminal annually.
“The port is very important to farmers in Southern Ontario as a large percentage of the grain they grow has to be exported,” says Terry Barros, general manager of the Sarnia terminal. “It is important to have a facility like Cargill AgHorizons Canada in Sarnia in position to export to markets around the world the excess grain that is not used domestically.” Barros says Cargill AgHorizons Canada was very pleased when port divestiture occurred because it ensured that the port would be maintained, upgrades would occur, and the harbour would continue to be dredged to Seaway drafts.
“It gave us the assurance that the port would continue to operate as a commercial harbour and allow us to reach markets around the world,” Barros adds. “It’s good for other businesses, too. The city is very committed to the port. For us, it’s a commitment of a strong and positive relationship.”