Yukon Ports Access Strategy for Yukon Economic Development
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01_kpmgReport_cover_June 2007.qxp 6/14/2007 1:48 PM Page 1 Yukon Ports Access Strategy for Yukon Economic Development KPMG LLP Yukon Economic Development ABCD Yukon Ports Access Strategy Acknowledgements This report is produced under the cover of KPMG LLP ("KPMG"), but represents the efforts of a number of parties. KPMG would like to acknowledge the input of Collings Johnston Inc, Lauga & Associates Consulting Ltd. and Robert G. Friend Consultants Inc. Restrictions In completing this engagement KPMG has relied on information and material provided by the Yukon Government and third parties. KPMG has not audited nor independently verified any of the information contained herein. The financial estimates presented in this report are based on assumptions developed with, and agreed upon by the Yukon Government for the purposes of completing the financial analysis. Estimates and analyses presented in this report are also based on economic trends and market assumptions regarding future events, which are subject to variation and change between now and future dates. Therefore, actual results will vary from the information presented. Even if the planned activities occur as projected in this report, the variations may be material. Accordingly, KPMG expresses no opinion as to whether these projections will be achieved. This report has been prepared for the Yukon Government to assist in their development of a Port Access Strategy. This report is not to be used for any purpose other than that indicated above without our prior written permission. We will not assume any responsibility or liability for damages or losses incurred by the Yukon Government or any other parties as a result of the circulation, publication, reproduction, use of or reliance on this report. Yukon Economic Development ABCD Yukon Ports Access Strategy EXECUTIVE SUMMARY The Executive Summary has been published separately and covers both the development of the port strategy (Contract A – KPMG) and the discussion of land use, regulatory and environmental considerations associated with the strategy (Contract B – Gartner Lee). I Yukon Economic Development ABCD Yukon Ports Access Strategy CONTENTS Executive Summary ....................................................................................................................... I Glossary of Terms and Acronyms ................................................................................................v 1. Introduction .............................................................................................................................1 1.1 The Purpose of this Report........................................................................................................ 1 1.2 Methodology ............................................................................................................................... 1 1.2.1 Scenarios for Economic Development........................................................................ 2 1.2.2 Infrastructure Assessment ........................................................................................... 3 1.2.3 Elements of a Port Strategy......................................................................................... 3 1.2.4 Implementation Plan ................................................................................................... 3 1.3 Outline of the Report ................................................................................................................. 4 2. Yukon Economic Background................................................................................................5 2.1 Minerals ...................................................................................................................................... 6 2.1.1 Iron Ore....................................................................................................................... 6 2.1.2 Coal............................................................................................................................. 7 2.1.3 Base Metals................................................................................................................. 8 2.1.4 Other Minerals .......................................................................................................... 12 2.1.5 Summary of Shippable Volumes of Yukon Minerals ............................................... 13 2.2 Transportation Impact of Yukon Minerals............................................................................ 14 2.3 Forest Products......................................................................................................................... 15 2.3.1 Current Harvest Volumes.......................................................................................... 16 2.3.2 Challenges to Future Development ........................................................................... 16 2.3.3 Potential Harvest Volumes........................................................................................ 18 2.3.4 Transportation Impact of Future Harvest .................................................................. 19 2.4 Project Commodities................................................................................................................ 20 2.4.1 Mackenzie Gas Pipeline............................................................................................ 20 2.4.2 Alaska Highway Natural Gas Pipeline...................................................................... 21 2.4.3 Mineral Resource Development Projects .................................................................. 23 2.5 Re-Supply Commodities .......................................................................................................... 24 2.5.1 Freight Flows ............................................................................................................ 24 2.5.2 Other Infrastructure Freight Volumes ....................................................................... 25 2.5.3 Aggregate Future Projections.................................................................................... 26 2.6 Summary of Projected Commodity Movements.................................................................... 27 i Yukon Economic Development ABCD Yukon Ports Access Strategy 3. Existing Infrastructure Assessment .....................................................................................29 3.1 Current Road Infrastructure .................................................................................................. 29 3.1.1 Highways................................................................................................................... 29 3.1.2 Current Road Traffic Levels...................................................................................... 30 3.1.3 Pavement Strength..................................................................................................... 31 3.2 Current Rail Infrastructure .................................................................................................... 33 3.3 Current Barge Systems ............................................................................................................ 35 3.4 Current Port Infrastructure.................................................................................................... 36 4. Required Future Infrastructure Assessment.......................................................................39 4.1 Required Surface Infrastructure ............................................................................................ 39 4.1.1 Short-term ................................................................................................................. 39 4.1.2 Medium-term............................................................................................................. 41 4.1.3 Long-term without Crest ........................................................................................... 41 4.1.4 Long-term with Crest Development (Scenario 4) ..................................................... 42 4.2 Potential Port Infrastructure...................................................................................................47 4.2.1 Arctic Ports – King Point .......................................................................................... 47 4.2.2 Alaska Mainland Ports .............................................................................................. 49 4.2.3 Alaska Panhandle Ports............................................................................................. 52 4.2.4 British Columbia Port Options .................................................................................. 59 5. Transportation Cost and Feasibility Analysis.....................................................................63 5.1 Financial/Economic Assessment of Options........................................................................... 63 5.1.1 Basis of Financial Analysis ....................................................................................... 64 5.1.2 Results of the Feasibility Assessment ....................................................................... 67 5.2 Overall Assessment of Options................................................................................................ 69 5.2.1 Temporal Dimension................................................................................................. 70 5.2.2 Volume Dimension ..................................................................................................