Friday, June 05, 2009

Mr. Veniez gets some back up

It's been a pretty lonely road that Dan Veniez has been on so far, seemingly the only one that publicly at least thinks that the privatization of Ridley Terminals is a necessary and good thing.

As has been chronicled over the last few weeks, Mr. Veniez has been a very prolific correspondent with the nations largest papers, getting his message of privatization out to a wide audience.

His efforts have served to bring together a coalition of sorts of Northern BC residents to offer up the contrary opinion to his desires, a group which most recently put together a very public rebuke to the plans of Mr. Veniez.

It's the organized nature of that opposition that has caught the attention of a well known national columnist with the National Post. Terence Corcoran has posted an article on the National Post website which challenges the nature of the "ground roots" protest, suggesting that a more organized campaign is at work, one sponsored by a rather self interested lobby group the British Columbia and Alberta coal industries.

Corcoran's article outlines some of the history of the Terminal, the attempt by Paul Martin to privatize it a few years ago and fully explores Corcoran's disappointment in the handling of the issue by the Conservative Harper government, which he suggests is running against all that Conservative, free enterprise believers would want or expect.

He examines the recent offerings of the local opponents, both the declaration from local mayors and regional district representatives as well as the recent letter from Houston Mayor Bill Holmberg, and sees the orchestrated moves of a professional PR campaign in place.

On the suggested preference of the local group to see Ridley merge with the Port, Corcoran picks up the ongoing theme of Mr. Veniez that including Ridley as part of a larger Port of Prince Rupert organizational chart would only create more problems than it solves.

It's doubtful that the Corcoran article will hold much sway with those that are firmly against the Veniez privatization bid, but it is interesting that he points some rather disconnected policy shifts from the Conservatives on this file, suggesting that perhaps they are getting used to the concept of government intervention in industry.

He may not be much help to Mr. Veniez in the long run, but at least he's coming along for the ride on his journey. After all nobody likes to travel alone...

Terence Corcoran: Tories back coal giants at Ridley
Posted: June 04, 2009, 7:59 PM by NP Editor

Plan would subsidize Alberta and B.C. coal shipments
By Terence Corcoran
The National Post

In the great scheme of Canada’s economy, Ridley Terminals Inc. is no big deal. With annual revenue of just under $25-million, the Crown corporation operates a bulk-commodity handling facility off Ridley Island in Prince Rupert, B.C., 1,000 kilometres north of Vancouver. FP Comment’s editorial team has never been to Ridley Terminals, and wouldn’t know a bulk handling facility from the Coney Island Cyclone Ride. What we do know, when we see it, is big time corporate subsidy seeking, backroom politics, scheming lobbyists and cabinet ministers throwing their weight around to satisfy the big time corporate interests.

In this case, the corporate interests include the B.C. and Alberta coal industries, whose coal production flows through Ridley Terminals. The political players include two Conservative cabinet ministers, House Leader Jay Hill and Transport Minister Rob Merrifield. Being Conservatives of the bold free-market mold allegedly found in Alberta and parts West, one would expect Hill, Merrifield & Company to be staunch defenders of commercialized and privatized service delivery through Ridley at market rates.

Alas, Messrs. Hill and Merrifield have no such interests as far as Ridley Terminals is concerned. Both have begun to oppose plans for proper commercialization of Ridley and to throw their support behind the idea of turning the Crown corporation, a vast sinkhole of taxpayer money over the years, into a vast sinkhole of more taxpayer money.

Instead of privatizing Ridley, our Tory MPs — along with a phalanx of coal lobby-orchestrated local governments — have cooked up the idea of turning Ridley over to the Prince Rupert Port Authority. The effect of this would be to turn Ridley Terminals into a subsidized transport link for the coal industry.

It turns out, to no surprise, that Mr. Hill is the MP for Prince George, where some coal mines operate. And Mr. Merrifield’s Alberta riding, Yellowhead, is the home of a very fat coal industry, including Coal Valley Mine, operated by Coal Valley Resources of Edson, a subsidiary of Sherritt International of Toronto. Sherritt has big plans to expand Coal Valley, and a subsidized Ridley would help keep their shipping costs down.

Both Conservative cabinet ministers are part of what has now become a campaign to head off attempts by Ridley’s board of directors, chaired by Daniel Veniez, to bring commercial discipline to the Crown corporation and, if possible, to privatize it. Mr. Veniez has written two commentaries on Ridley’s situation; they can be found here and here.

Ridley was built in 1982 on a whim by the Trudeau Liberals at a cost, in today’s dollars, of $550-million, to support the coal industry. Since then, tens of millions more were spent operating the place, with little attention paid to turning it into a non-subsidized commercial operation. In 2006, Paul Martin’s Liberals had had enough, and were prepared to dump Ridley for $3-million.

Prime Minister Stephen Harper apparently had a better idea. In December, 2007, he stepped in and appointed Mr. Veniez as chairman of the terminal operation. A new Conservative-appointed board was brought in, apparently with the objective of turning Ridley into a commercial operation. As Mr. Veniez sees it, the mandate was to bring new discipline to Ridley. The board, he reported in Ridley’s 2008 annual report, “decided to be aggressive in following through on the Prime Minister’s foresight. Renewal was urgently needed.”

It would appear, from accounts, that Ridley has been shaken up. But Mr. Veniez says much more needs to be done, including spending tens of millions on equipment upgrades, funding a $10-million hole in a defined benefit pension plan and finding cash to improve operations. Mr. Veniez believes the best plan is to privatize Ridley to bring full commercial standards to the terminals and expand the base of commodities and reduce dependence on coal.

All of this has driven the coal industry into a rearguard action against Mr. Veniez, both in terms of his current operating methods and his plans to privatize. One report mentioned a privatization offer in the range of $130-million.

The focus of opposition activity is the Ridley Terminals Users Group, a cabal of major B.C. and Alberta coal mine operators, including such giants as Husky Energy, Suncor Energy, Tech Coal and Coal Valley Resources, headquartered in Mr. Merrifield’s riding. The listed federal lobbyist for Ridley Terminal Users Group is Philip Cartwright, of Global Public Affairs in Ottwas.

With Global Public Affairs leading the campaign, a sudden un-spontaneous groundswell of opposition is sweeping local governments in and around Prince Rupert. “Privatizing Ridley Terminals the Wrong Thing,” said Bill Holmberg, the Mayor of Houston, B.C., in a letter to local newspapers. Another letter from a collection of local governments has been circulating, carrying all the earmarks of a professional PR job run out of the lobby of the big coal lobby.

One coal-lobby canard is the claim that Ridley is a natural monopoly that should be treated as a government-run service for the benefit of all communities and industries. But there is no evidence that Ridley is a monopoly, since it clearly competes with coal ports in Vancouver and other parts of the world.

The idea of turning Ridley over to the Prince Rupert Port Authority, the favourite anti-privatization scheme, would appear to solve no problem and create a couple of big ones. Who will run Ridley once it is owned by the Port Authority, and who will fund Ridley?

On this subject, Prime Minister Harper might want to consult Lisa Raitt, his natural resources minister, once she gets over her current troubles. Ms. Raitt headed the Toronto Port Authority, and she would know that Ridley would be in better hands if it were not in government hands. Or is the Harper government, having bailed out the auto giants, now in the perpetual business of subsidizing industries?

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