Wednesday, May 20, 2009

The battle for Ridley Terminals set to grab the headlines again…

"We have not made their lives easy, we've run the place as a business."--The ever loquacious Dan Veniez raising his alarm bells over the latest developments in the Ridley Terminals saga.

Dan Veniez is back in the press again, using an interview with the Globe and Mail’s Patrick Brethour (a favourite conduit it seems for the Chariman), to take a shot across the bow of some Conservative MP’s who have put the Stop sign out over a potential sale of Ridley Terminals to private interests.

It’s but the latest twist in the twenty seven year old history of the waterfront terminal on Ridley Island, which has seen a number of Chairmen, Presidents, Managers and business plans come and go over the years.

The current debate over the fate of the terminal has a number of backbench MP’s led by Prince George-Peace River MP Jay Hill, who also is the Government House Leader in Ottawa,less than enthusiastic about a $131-million offer for Ridley Terminals, apparently one of four formal expressions of interest currently in play for the Prince Rupert coal terminal.

It’s an unusual scenario being played out as the British Columbia caucus of the Conservative government, seems to be questioning the management style of the Conservative appointed chairman and his board.

Veniez the former head man of the bankrupt and subsequently closed New Skeena Forest Products, returned to the Northwest amid much fanfare a few years ago, tasked it seems to getting Ridley Terminals ready for eventual sale to the private sector.

A task he suggests that is exactly what he and his board have done, and in the Globe and Mail article posted today, he bemoans the interference by government MPs from BC, in his usual bombastic style he explains that his board members are becoming increasingly concerned over the issue, “I can't keep my directors contained any more on this," and suggests that their reputations have been sullied in the process, “Our reputations have been dragged through the mud and we've been left hanging by the government."

For its part, the elected officials on the other side of the debate are simply suggesting that they are simply worried about the effect of privatization on coal-mining firms in the B.C. Interior. A rather unusual statement for Conservative MP’s but perhaps one framed by the fact that coal mining is key industry in many of their ridings and the cost of shipment to Ridley is always a major concern of those industry players.

Jay Hill who seems to have emerged as the spokesperson for the group says that Mr. Veniez and his board perhaps are misreading the role of MP’s when it comes to watching over publicly owned industries such as Ridley.

The first attempt to sell off Ridley to private interests, which was brokered by the Liberal government of Paul Martin, was cancelled when the Conservative took power in 2006. The concern then, as it seems to be today was that a privately owned terminal would raise the prices of shipment for coal to levels that would not be sustainable by the provinces coal companies.

Hill says that he’s still supportive of Ridley being run as a Crown corporation and in fact wonders if it should not be folded into the larger model of the Port of Prince Rupert.

One wonders what Mr. Veniez and board might think of that prospect…

The full article is posted on the Globe website complete with commentary from Globe readers…

We also provide a transcript of it below, as well as some past Podunkian items related to the developments at Ridley Terminals.

Update: Mr. Veniez has taken his case for privatization to the Vancouver Sun, with an article posted on the Sun's website on May 21st.

Battle brews as MPs oppose sale of British Columbia coal terminal
By Patrick Brethour
From Wednesday's Globe and Mail
May 20, 2009 at 4:36 AM EDT

VANCOUVER — Private companies are lining up to bid for the cash-strapped coal-shipping Crown corporation in Prince Rupert, potentially handing Ottawa as much as $131-million as it seeks to raise billions from the sale of government property this year.

But the $131-million offer for Ridley Terminals - one of four formal expressions of interest - is being stymied by government MPs worried about the effect of privatization on coal-mining firms in the B.C. Interior, says Daniel Veniez, the Conservative-appointed chairman of Ridley.

In an interview with The Globe and Mail, Mr. Veniez said the opposition has been spearheaded by Jay Hill, government House Leader and the member of Parliament for Prince George-Peace River, a riding that embraces a large swath of B.C.'s coal-producing region.

Members of the Conservative British Columbia caucus, including Mr. Hill, are also unhappy with Ridley's attempts to negotiate higher rates for the coal shipped from the Interior through its Prince Rupert facility, Mr. Veniez said. "We have not made their lives easy, we've run the place as a business."

But the conflict with Ottawa has taken its toll on Mr. Veniez and his board, who believe they have simply done the job they've been asked to do, and are now being caught in political crossfire.

"I can't keep my directors contained any more on this," the former forestry executive wrote in an e-mail to a senior adviser in the government earlier this month. "Our reputations have been dragged through the mud and we've been left hanging by the government."

In the interview, Mr. Veniez stressed that he does not believe Prime Minister Stephen Harper is aware of the simmering dispute.

For his part, Mr. Hill readily acknowledges his concerns about the future direction of Ridley, saying it would be "completely irresponsible" for him not to give voice to worries about the effect of privatization or higher fees on the coal industry in northeastern B.C. - and the hundreds of jobs that depend on those mining firms.

One of the larger firms, Peace River Coal, met with the B.C. caucus a month ago, an event that Mr. Hill said is not unusual. That is just part of his job as an elected representative, Mr. Hill said. "If someone is describing this as political interference, they don't understand the role of a member of Parliament."

The tug-of-war over Ridley is the latest chapter in the odd history of the terminal, which started life as a Trudeau-era Crown corporation in 1982, deliberately targeted at spurring the development of B.C.'s coal resources.

Ridley Terminals continually struggled, and had to turn to the government several times for loans. Finally, in 2005, Paul Martin's Liberal government decided to sell off the troubled asset to an Ontario-based coal-mining firm for a comparative pittance - just $3-million, far less than the $400-million that the federal government has sunk into Ridley over the past 27 years.

One of the first acts of the newly elected Conservative administration in 2006 was to cancel that deal.

A new board was put in place at Ridley, headed by Mr. Veniez, who went on to install new management and negotiate a long-term labour deal. Mr. Veniez said he was given the mandate to stabilize the business and allow the government the option of privatizing Ridley.

But the notion of selling off the terminal to a private company, which would charge higher market-based rates, is at odds with the vision (in line with the original Trudeau-era strategy) that sees Ridley as something more akin to a public service, providing reasonable shipping access to B.C. coal miners.

Mr. Hill, who supported the cancellation of the 2006 sale, said he still believes public ownership is appropriate for Ridley, perhaps through amalgamation with the Port of Prince Rupert, also owned by the federal government.

"I'm very supportive of it continuing as a Crown corporation," he said, noting it is an "anomaly" to have two Crown corporations so closely related operating separately.

The offers for Ridley come in the midst of an effort by Ottawa to sell $2-billion in government-owned property, including "enterprise" Crown corporations (a category that includes Ridley Terminals). Yet a government source said Ottawa is not "aggressively considering" the sale of Ridley.

Mr. Hill said he has not seen an offer - "certainly nothing in writing" - and that in any case he is not directly responsible for decisions on the strategic direction of Crown corporations.
The offers for Ridley are not final and the majority of the $131-million offer would be paid out over several years.

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