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Port’s new terminal gets up to $300 million from Infrastructure Bank

Friday, 06 December 2019 | 00:00

The Port of Montreal’s long-awaited expansion on the South Shore has found a firm backer in Toronto.

The Canada Infrastructure Bank said Wednesday it’s committing up to $300 million toward the building of a container terminal in Contrecoeur that will allow Quebec’s biggest port to boost capacity by about 50 per cent. The “long-term” capital will bridge the gap between the start of construction and the time at which the new facility becomes profitable, CIB chief executive officer Pierre Lavallée said Wednesday morning at a press conference in Montreal.

The bank’s commitment allows the port to continue working to complete the financial structure of the project, in collaboration with private sector investors. It follows the signing of a memorandum of understanding between the parties in August.

Montreal, the only container port in Quebec, has been looking at ways to capture additional business amid a rise in global commerce accelerated by the signing of new trade agreements. Container volumes in Montreal have been rising for several years, hitting a record 1.7 million units last year. The port anticipates reaching full capacity around the middle of next decade, at which point it would need to start turning away business unless the Contrecoeur project goes ahead.

“Not developing a project like Contrecoeur would be like putting a ‘No vacancy’ sign on our doors,” Port of Montreal CEO Sylvie Vachon told reporters. A lack of capacity in Montreal would push importers and exporters to shift some of their business to Eastern seaboard ports in the U.S., she added.

Building Contrecoeur would cost between $750 million and $950 million — figures that cover several different scenarios and include spending on infrastructure, equipment and the road network around the facility, Vachon said.

Construction would start in 2021, with the new terminal entering service in 2024. The port authority already owns 4 kilometres of shoreline in Contrecoeur, in addition to the 26 kms it owns in Montreal.

“We’ve included everything — construction of the docks, the yard, the connection of the yard to the road and rail networks — because we wanted to present a completed picture of the project,” Vachon said in an interview after the press conference.

Port officials are still working on securing environmental approval from the Impact Assessment Agency of Canada. That process is “well under way,” federal Transport Minister Marc Garneau said at the press conference, without providing specifics.

When fully operational, the new terminal would draw 1,200 trucks daily and two to three ships per week, according to port estimates.

“The heart of the port’s activity will be in an industrial zone, which is going to help us lessen the impact” on the community, Vachon said.

About 5,000 jobs would be created during the construction period, with another 1,000 people required to operate the facility once it is up and running, port officials said.

Discussions are ongoing with operators Montreal Gateway Terminals Partnership and Termont to see which one will run the new facility, Vachon said. Talks are also under way with other unidentified private investors to complete the financing structure.

Created in 2017, Toronto-based CIB is a Crown corporation tasked with deploying $35 billion in federal funding over 10 years to attract private and institutional investors. In Montreal, it’s already agreed to provide $1.3 billion in funding for the Réseau express métropolitain, the 67-kilometre light-rail network that the Caisse de dépôt et placement du Québec is building.

CIB’s commitment to the Contrecoeur project is for “several decades,” Lavallée told reporters after the conference. “Think 25, 30, 35 years or more.”

“This is capital for the very long-term, which de-risks the project,” Vachon said. “We’ve found a financial partner that’s in less of a hurry than a commercial bank would be.”
Source: Montreal Gazzete

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