Priority Gateway Infrastructure Projects Cost-Recovery Mechanism Options Consultation November 27 – December 22, 2017
Purpose Provide an overview of Vancouver Fraser Port Authority work • in identifying and seeking federal funding for projects that will benefit the gateway Outline current understanding of potential port authority pre- • funding on behalf of industry over the next decade and need for cost-recovery Seek input from industry regarding potential cost- • recovery mechanism options 2
Outline 1. About the Port of Vancouver and the Vancouver Fraser Port Authority 2. Background: Gateway Infrastructure Program and Gateway Infrastructure Fee 3. The next round of generational infrastructure investments Gateway T ransportation Collaboration Forum’s Greater Vancouver • Gateway 2030 strategy Other Vancouver Fraser Port Authority projects • 4. Cost-recovery mechanism options Discussion regarding options • 5. Feedback from industry 3
Background: About the Port of Vancouver and the Vancouver Fraser Port Authority 4
About the Port of Vancouver • Canada’s largest and most diversified port • $200 billion in goods annually • $550 million of cargo/day • 28% of Canada’s trade beyond North America • 115,300 jobs across Canada 5
Vancouver Fraser Port Authority mandate and role • Facilitate Canada’s trade • Protect the environment • Consider local communities • Operate safely • Be commercially viable Work for the benefit of all Canadians 6
2.3 Federal port lands and waters million people 16 municipalities 7
Our five business sectors Breakbulk Bulk Auto Container Cruise 8
Background: Gateway Infrastructure Program and Gateway Infrastructure Fee 9
Gateway Infrastructure Program (2009 – 2015) Roberts Bank Rail Corridor North Shore Trade Area South Shore Trade Area $310 million $283 million $127 million 10
Gateway Infrastructure Program (2009 – 2015) 17 projects completed in North Shore, South Shore and • Roberts Bank T rade Areas Projects largely removed road and rail conflicts and congestion • at key bottlenecks, and increased capacity to accommodate anticipated growth in road and rail traffic associated with goods movement VFPA pre-funded $167 million on behalf of industry • Leveraged more than $3 million of funding from federal, provincial • and local governments, T ransLink and railways for every $1 million contributed by industry These investments in turn led to rail improvements • undertaken by the railways and private sector investment 11
Richardson $140 million Deltaport $400 million G3 Terminal $550 million Private sector investments PCT $170 million Westshore $385 million Neptune $330 million 12
Gateway Infrastructure Fee As part of its requirement to be financially self-sufficient, port • authority needed to recover the $167 million investment from industry Four models were taken out to consultation in 2010: • Value-based • T onnage-based • Mode and tonnage-based • Rail footage and truck unit-based • Industry feedback was considered in establishment of the • Gateway Infrastructure Fee 13
Gateway Infrastructure Fee Cont. The Gateway Infrastructure Fee was established in 2011 and will be in place for • 30 years T onnage-based fee allocated by benefiting trade areas (North Shore, South • Shore and Roberts Bank) As of 2017, Gateway Infrastructure Fee is set at: • Roberts Bank T rade Area: $0.05/tonne • South Shore T rade Area: $0.17/tonne • North Shore T rade Area: $0.08/tonne • There were no projects in the Fraser River T rade Area in the Gateway Infrastructure • Program Annual report is provided to industry on portvancouver .com • Recalculation of Gateway Infrastructure Fee is done on an annual basis based on • cargo volumes and project costs to ensure that there is not an excess or insufficient amount of cost-recovery 14
The next round of generational investment 15
Trade is growing and further investment is needed 250 Others Other Fertilizers 200 Autos Millions of Metric Tonnes Sulphur 150 Bulk Liquids Potash 100 Metals & Minerals Agricultural Products 50 Forest Products Containers Coal 0 16
The next round of generational investment Gateway T ransportation Collaboration Forum (GTCF) • Established in 2014 to identify priority projects related to trade and transportation • in the Greater Vancouver area Membership and steering committee consists of Vancouver Fraser Port Authority , • T ransport Canada, Ministry of T ransportation and Infrastructure, T ransLink and Greater Vancouver Gateway Council Greater Vancouver Gateway 2030 strategy: nearly 40 projects identified by • GTCF for federal funding asks through the National T rade Corridors Fund and others – not all projects will have a funding commitment from VFPA Other identified investments • In addition to GTCF projects, VFPA has announced funding commitment with the • Province of BC for the Highway 91 to Highway 17 and Deltaport Way Corridor Improvement Project 17
Priority Gateway Infrastructure Projects Greater Vancouver Gateway 2030 Projects 18
Priority Gateway Infrastructure Projects Identified projects for VFPA pre-funding 19
Cost-recovery for investments • As part of its requirement to be financially-self sufficient, VFPA intends to recover its pre-funding contributions from industry • This cost-recovery mechanism will apply to all commodities • The cost information in this presentation is a conservative estimate based on the current understanding of projects that may be funded by the port authority over the next 10 years • VFPA’s pre-funding contributions will not be recovered through its other fees (harbour dues, wharfage or berthage) 20
Cost-recovery mechanism options 21
Cost-recovery criteria • Fairness: Cost recovery is based on the principle that gateway infrastructure improvements will benefit gateway users, therefore gateway users should be subject to the fee. The cost recovery should be transparent and should not compromise port or port operator competitiveness. • Effectiveness: The cost-recovery mechanism should raise the required port authority pre-funded infrastructure investment plus the cost of borrowing. • Efficiency: The cost-recovery mechanism should be as simple and efficient to collect as possible. 22
Cost-recovery assumptions The cost-recovery mechanism will apply to all trade areas and • commodities The cost-recovery mechanism will be based on tonnage • Options based on value and modal split were considered in the • development of the Gateway Infrastructure Fee but were deemed by industry stakeholders to be too complicated The term of the cost recovery would be 30 years • Recalculation of the per tonne cost recovery amount would be • done on an annual basis based on cargo volumes and project costs An annual report would be provided on portvancouver .com • 23
Model assumptions T otal cargo volume estimates presented are for 2019, when • the new fee is anticipated to take effect Fee model assumes: • 3% cargo growth per year from 2019 to 2048 • 4.63% annual cost of borrowing, the current VFPA bond rate • $450 million capital costs do not include major • repair/maintenance, property insurance or land cost, which are cost recovered through GIF and would be cost recovered through the new fee 24
Capital spend by trade areas and across the gateway The following table provides the assumptions regarding project costs • and eligible cargo throughput by trade area and across the gateway , which result in the calculations of cost per tonne in the options. Roberts Fraser South North Total Bank Trade River Trade Shore Shore Area Area Trade Area Trade Area Estimated $104 M $161 M $90 M $95 M $450 M Project Cost Forecast Tonnage 40 MT 5 MT 30 MT 35 MT 110 MT Subject to Cost Recovery * project costs have been allocated to trade areas based on benefit to those trade areas. For example, a project located within the Fraser River T rade Area that also benefits the Roberts Bank T rade Area has had costs allocated, in part, to Roberts Bank. 25
Capital spend by trade areas – 2009-2030 RBTA FRTA SSTA NSTA Total GIP/GIF $50 M - $58 M $59 M $167 M (2009-2015) Current Projects $104 M $161 M $90 M $95 M $450 M (2017+) Total $154 M $161 M $148 M $154 M $617 M Total 2019 Tonnage 30 MT 35 MT 110 MT 40 MT 5 MT (forecast) * project costs have been allocated to trade areas based on benefit to those trade areas. For example, a project located within the Fraser River T rade Area that also benefits the Roberts Bank T rade Area has had costs allocated, in part, to Roberts Bank. 26
Cost-recovery mechanism options • Four options have been developed for consultation: • Option 1: T onnage-based cost recovery allocated by trade areas (no change to amount or collection of existing Gateway Infrastructure Fee) • Option 2: T onnage-based cost recovery allocated by trade areas combined with existing Gateway Infrastructure Fee • Option 3: T onnage-based gateway-wide cost recovery (no change to amount or collection of existing Gateway Infrastructure Fee) • Option 4: T onnage-based gateway-wide cost recovery combined with existing Gateway Infrastructure Fee 27
Recommend
More recommend
