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Ports of Sydney Master Plan November 2007

EXECUTIVE SUMMARY

A consortium of marine terminal owners and operators formed The Marine Group to plan the maritime future of Sydney Harbour. The ports community has come together to foster economic benefits to the region and to work towards common goals of increased port development and international shipping. The road map for this new direction is documented in the Ports of Sydney Master Plan (2007).

THE MASTER PLAN REFLECTS LEADERSHIP OF THE MARINE GROUP The Marine Group consists of the following active members:

x Laurentian Energy Corporation: Owners/Operators of Sydport Industrial Park x Logistec Stevedoring (Atlantic): Operators of International Coal Pier x Marine Atlantic: Crown Corporation – Operator of Newfoundland ferries x Nova Scotia Power: Owners of International Coal Pier x Provincial Energy Ventures: Operators of Atlantic Canada Bulk Terminal x Sydney Steel Company: Owners of Atlantic Canada Bulk Terminal x Sydney Ports Corporation: Operators of Sydney Marine Terminal

GOALS ARE FOCUSED ON FUTURE GROWTH The Master Plan has been driven by targeting the achievement of the following interrelated goals:

x Develop a consolidated vision for Sydney Harbour. x Identify opportunities for future growth and expansion. x Develop a Master Plan to capture opportunities. x Demonstrate the economic importance of the Harbour, both today and in the future. x Develop ways to better market Sydney Harbour to customers.

PORTS OF SYDNEY ALREADY GENERATE SUBSTANTIAL ECONOMIC BENEFITS This Master Plan establishes for the first time, the economic impacts of the Ports of Sydney. Port activities within Sydney Harbour currently have substantial economic benefit to the region. The following provides evidence of the economic impacts of the Ports of Sydney that were derived from 2007 surveys of maritime employers and businesses1: • Marine Cargo Activities: • 2,125 Current Jobs (includes direct, indirect and induced jobs) • $57 million in Annual Tax Revenue to Region and Country –

1 Economic impacts and cost estimates in this Plan are Canadian dollars.

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– $34.9 million federal income tax – $20.7 million provincial taxes – $1.4 million local tax revenue • Cruise Activities: • 271 Current Jobs • $4.2 million Tax Revenue to Region and Country: • Total Ports Activities Today Generate: • 2,400 Jobs for the Region, and • $61 million in annual tax revenue

SYDNEY IS A FREQUENT HOST TO CRUISE SHIPS Sydney has been a premier port of call for cruise ships and international tourists. The cruise market will continue to grow. In 2008, Sydney will host 86,000 cruise passengers on 51 cruise calls; a 76% increase over 2007.

Three corporations dominate the cruise ship industry and all three are represented in Sydney. As of October 2007, 37 new cruise vessels are scheduled for delivery through 2012. Sydney’s strength is to serve as a port of call for the regional Canada & New England deployment patterns. Sydney competes directly with Charlottetown, PEI and Saint John, NB for cruise traffic and secondarily with Halifax. Growth is anticipated to be between 183,000 to 238,000-passengers in 2030. Cruise calls will range from 60 to 92 and Sydney will climb in peak day traffic on mid-week days from 2,918-passengers in 2008 to between 7,200 and 8,000-passengers in 2030.

The cruise business will continue to be focused on the cruise passenger terminal in downtown Sydney. Sydney has one of the premiere multi-use cruise terminal facilities in Atlantic Canada. Expanding the tourism infrastructure and tourism offering overall is a key element in the overall delivery of Sydney as a cruise port of call.

MARINE CARGO REPRESENTS STRONG POTENTIAL There are also strong cargo market opportunities for the Ports of Sydney. Ocean shipping routes are changing. Direct shipping from the Indian Sub-Continent to North America via the Suez Canal is faster and cheaper than going through West Coast North American ports. From the Indian Sub-Continent, the Suez Canal is the shortest distance routing to East Coast ports and equal distance to Chicago and Midwest destination as are routings via West Coast ports. Sydney Harbour represents the first port of call in North America for this Suez Canal vessel traffic.

A state of the art container terminal in Sydney Harbour would take advantage of these shifts in ocean shipping routes and serve as a transfer hub with long haul rail movements of container cargo to the Midwest. With the potential resurgence of coal exportation from the region, the Ports of Sydney are also viable candidates to move millions of tons of this dry bulk cargo annually. Additionally, available marine terminal capacity exists within the Ports of Sydney to attract and handle increased volumes of traditional breakbulk and larger project cargoes for regional and various Great Lakes and Midwest markets.

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COMMERCIAL CARGO SHIPS ARE BIGGER AND SHIPPERS ARE FINDING FEW PORTS WITH POTENTIAL NEW SITES Commercial cargo vessels are larger and will only be able to be accommodated in a few ports with deep water harbours. The required draught of container vessels has grown from 10 meters (m) to 16 m that carry up to 12,000 twenty-foot equivalent units (TEUs) of containers. Coal carriers of 125,000 dead weight tons (DWT) that would be needed for a Sydney export market draw 16.5 m of water.

Shippers are looking for certain assets in marine terminal locations. Ports no longer need to be located only in population centers. Available and adequate waterfront land for facility development and expansion are paramount in shipper choices for site location. Efficient rail transportation that will allow accessibility to distance customer markets and sufficient water depths to allow for the accommodation of planned vessel sizes are key decision criteria for port selection.

THE PORTS OF SYDNEY ARE WELL POSITIONED Sydney is well positioned to capture these new cargo opportunities. The Ports of Sydney are the closest North American harbour to Europe through its proximity to the North American Great Circle Route. This fact positions Sydney well for receiving large cargo vessels using the Suez Canal and bringing products to North America. Marine terminals of the Ports of Sydney are all located within 10 kilometer (km) of the ocean in a very sheltered harbour with naturally deep water. There is available excellent rail connectivity that provides a strong competitive advantage for transferring cargoes to the Midwest and moving coal from potential recovered reserves in the region. Labor is readily available. And waterside land is available for increased utilization and new development with ample room for port expansion.

DEEPENING A PORTION OF THE HARBOUR NAVIGATION CHANNEL IS CRITICAL TO THE EFFORTS TO ATTRACT POTENTIAL CARGOES The land and harbour conditions in Sydney are ideal for new terminal development; however, both the container and coal opportunities need to be able to accommodate larger vessels. The existing navigation channel, while having ample deep water in most locations of the harbour, has current water depth limitations of 11.5 m in the outer channel. Therefore, a key recommendation of this Master Plan is to deepen this 7.5 km long outer section of the navigation channel to a depth of 17 m.

Navigational deepening is a common occurrence at ports today because of the increase in vessel size. The natural geology and hydrodynamics of Sydney Harbour limit sedimentation rates. High sedimentation rates in other ports force frequent maintenance dredging. It is anticipated that channel deepening of Sydney Harbour will not require costly and recurring maintenance dredging. This is another competitive advantage. It is estimated that approximately 4 million cubic meters of material will need to be excavated to reach 17 m throughout the outer navigation channel. Geotechnical studies indicate the much of this dredged material is sand and gravel with some silts that would be suitable for use in construction projects. An innovative use of this dredged material would be as

TEC Inc. ES-3 Executive Summary Ports of Sydney Master Plan November 2007 fill material in the construction of new wharfs for the recommended container and expanded coal terminal of this Master Plan. This channel deepening and dredged material placement plan would be the subject of appropriate environmental study and permits.

THE PORTS OF SYDNEY HAVE EXISTING ATTRIBUTES FOR INCREASED USE The Master Plan provides details of existing port assets and cargo or passenger business potential. It is important to note that the Ports of Sydney are independent entities and that each will follow their own business plans. However, this Master Plan provides guidance for potential development projects based on physical attributes and market forces. A summary is provided below.

Potential for Development by Site and Cargo Type

Facility/Site Container Bulk Breakbulk Other

Existing Coal Restricted International Terminal can be space for breakbulk Restricted Coal Not Suitable expanded with new storage plus new space for other Pier berth and larger stock marginal wharf cargoes. plies required. Some limited potential, but berth Good site for bulk Limited for Autos, if length inadequate for Best Suited for Break shipments, currently coal piles are near. larger vessels and Bulk because of rail SYSCO/PEV loading coal and slag. Could serve as auxiliary shape of property and access and available Can be expanded for Passenger or Cruise rail access through open storage space. larger coal export Berth downtown limiting for containers Primary role as Marine Passenger terminal, can Not Suitable Not Suitable Secondary Atlantic handle some roll-roll cargo Some Potential to use Sydney Primary Passenger open space and Marine Not Suitable Not Suitable Terminal, serving adjacent site for Terminal cruise industry. Breakbulk Best Potential for Potential for Project Sydport Limited, for containers Break Bulk with Cargo w/ good rail Industrial because of existing Unlikely reconfigured wharf access Park Piers facilities with rail access and storage Very Probable x Access to Deep Sydport Possible, but better Water; Possible location for Greenfield existing sites are Size/Shape of new bulk terminal Site x available Parcel; x Good Rail Access

- Highlighted cells represent highly probable cargo opportunities

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Based on this evaluation of the assets, facilities and current business operations at each of the potential marine terminal sites, coupled with the facility and operational requirements of each cargo type, the following sites have been identified as the ones that best meet both the physical and operational requirements for the various cargo types:

x Bulk Cargoes: International Coal Terminal; SYSCO/PEV x Breakbulk Cargoes: SYSCO/PEV; Sydport Industrial Park Piers x Container: Sydport Greenfield Site x Passenger: Sydney Marine Terminal; Marine Atlantic

THE MASTER PLAN IDENTIFIES SEVERAL CAPITAL IMPROVEMENT PROJECTS To best capture potential business, facilitate operational efficiencies and expand for anticipated growth, the Master Plan identifies a number of port development projects for the Ports of Sydney.

International Coal Pier Design capacity of upgraded terminal: 4 – 5 million tonnes per year; Design vessel: 125,000 DWT Bulk Carrier; Project elements:

x New ship loader and marine supports; x Enlarged and expanded stockpile area x Ancillary equipment and site improvements;

Total Estimated Development Costs, including equipment: $52 million

SYSCO/PEV Design capacity of upgraded terminal: 400-500,000 tonnes per year for breakbulk and 4- 5 million tonnes for coal; (An option would be to more fully develop terminal for more exclusively export coal market) Design vessel: 60,000 DWT bulk or general cargo vessel; (An option would be to increase water depths alongside the berth and deepen access way to point where channel depths are 17 m for up to 125,000 DWT bulk carrier) Project elements for Multibulk Terminal: x Rehabilitate existing wharf structure, if required x Improve paved storage areas and construct storage building; x Improve the existing on-dock rail; x Purchase new Mobile Harbour Crane x Coal export and ship loader conveyors x Transfer towers x Traveling ship loader

Total Estimated Development Costs, including equipment: $35 million

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Project elements: for Option for 125,000 DWT Bulk Carriers:

x Dredging of approximately 300,000 for berth and access to channel to 17 m x Additional wharf rehabilitation reflecting increased depth alongside x Designated and upgraded stockpile area x Shiploader for 125,000 DWT bulk carrier

Total Estimated Development Cost for Option: $55 million

Sydport Industrial Park Piers Design capacity of upgraded terminal: 400-500,000 tonnes per year; Design vessel: 35,000 DWT bulk or general cargo vessel; Project elements: x Demolition of the existing outward pier structure; x Construction of a new 572 m long marginal wharf; x Dredging to allow for -12.5 m depth at the berth; x 4-5 acres of new landfill developed behind the wharf; x Reconstruction of landside storage areas; x Development of new 6,000 m2 transit shed/warehouse; x Improvements to rail sidings to terminal area; x New equipment, including Mobile Harbour Crane.

The Total Estimated Development Costs: $42.5 million.

Sydport Greenfield Site A state-of-the-art container terminal would be built in phases on this 450 acre undeveloped site along the South Arm, with the first two berths constructed in Phase 1 and the full four-berth complex being completed with a second phase as business grows.

Design capacity of new terminal: 750,000 TEUs per year in Phase 1 and 1,500,000 TEUs in Phase 2 Design vessel: 12,000 TEUs with 16 m draught Project elements:

x A new wharf 1,500 m long; allowing for 4 berths, serviced by 8 large ship-to- shore gantry cranes; x A berth depth of -16 m, requiring some additional dredging; x 100 acres of new container terminal storage area, some of which would be build on new land created by filling near shore areas; x Near shore fill areas would incorporate dredged material from the channel that is suitable for structural support thus acting as Confined Disposal Facility (CDF) for the placement of dredged material; x A rail, intermodal transfer facility;

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x Administrative buildings; x Off-site rail and road improvements to the site.

The Total Estimated Development Costs: Phase 1 - $163 million; Phase 2 - $139 million;

Total - $302 million

Sydney Marine Terminal Projections of existing passenger business indicate the need for a second berth by 2012. The existing berthing wharf can be expanded to allow for the berthing of a second vessel by incorporating a mooring dolphin system. This would expand the berthing area by 145 m and allow for smaller cruise vessels or Coast Guard Cutters to dock at the terminal. The best use of the adjacent properties would be to develop a cruise orientated Nova Scotia “village” that would help to attract and increase the terminals passenger and cruise business.

In the long term concept, an approximate 300 m length pile supported dock would be extended at an angle from the north end of the existing marginal wharf. In this way, two 900 ft cruise ships could be accommodated at the terminal.

The Total Estimated Development Costs: Dolphin System - $850,000 New Pile Supported Dock - $14 million Marine Atlantic Current improvements projects at Marine Atlantic in Fiscal Year 2007 and 2008 include:

x Gulfspan dock fendering upgrades x Security fencing x Addition of a second level ramp on the Alternative Dock

Deepen the Main Harbour Navigation Channel to -17 Meters A most critical project recommended by this Master Plan is the deepening of the outer portion of the main harbour navigation channel to a depth of -17 m. Currently, the main channel into Sydney Harbour has a restricted depth of approximately 11.5 m near the mouth of the harbour. However, much of the channel into the South Arm has existing water depths of 17-18 m. The area with restricted depth is a strip of the navigation channel in the outer harbour of approximately 7.5 km in length.

Based on current discussions with several international dredging firms, the cost of the dredging, including engineering and contingencies and assuming the near term placement of the dredged material at the proposed container terminal at Sydport’s Greenfield site and/or between the ACBT and International Coal Pier sites (no ocean disposal), is estimated to be approximately $44 million ($31 million for dredging and $13 million for on site dredge material disposal management).

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THE RESULTING PORT ACTIVITIES IN THE FUTURE WILL TRANSLATE INTO MORE ECONOMIC BENEFITS FOR THE REGION The Ports of Sydney will need to aggressively market their capabilities to grow in the globally competitive world of international shipping. With the market opportunities for increased cruise business and new ventures in container and export coal plus increased throughput of breakbulk and project cargoes and with the development of new projects as outlined in this Master Plan, there will be expanded economic impacts. The following provides a projection of potential future economic impacts from the Ports of Sydney:

• Marine Cargo Activities: • 5,050-7,350 Jobs • Tax Revenue to Country and Region (Annual): – $48-85 million Federal income tax revenue – $29-51 million provincial tax revenue and – $2-4 million local tax • Cruise Activities: • 740-1,500 Jobs • Tax Revenue to Country and Region (Annual): – $11-26 million in Federal income, provincial and local tax revenue

• Total Future Harbour Activities: – 5,750 - 8,800 Jobs and – $90- $166 million in Annual Tax Revenue

The channel deepening, by itself, would allow new container and export coal opportunities providing over 4,000 jobs and $109 million in additional annual tax revenues.

THE PORTS OF SYDNEY WILL BENEFIT FROM A UNIFORM APPROACH TO GOVERNANCE AND MARKETING Sydney Harbour is in a unique position with relatively recent federal government divestiture programs and new owners and operators of marine terminals. The creation of the Marine Group and movement forward with this Master Plan fills a void for leadership that needs to continue for the Ports to become more competitive and capture a share of global waterborne commerce.

The Master Plan evaluates three options for governance that include: x Expand Memorandum of Understanding (MOU) for Marine Group x Expand Role of Sydney Ports Corporation x Create Sydney Harbour Port Commission

Momentum is an important factor in bringing about increased business to the Ports of Sydney. As such, the recommended near term option for governance is to expand the MOU of the Marine Group. This expanded MOU would include additional roles and activities to implement next steps beyond the Master Plan. Other port related entities may

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also be added to the Group. For either of the other two options, there are a number of legal and financial issues with the continuing federal divestiture of the harbour bottom and roles of the regional and provincial government that should be further investigated, and that will take time. For several elements of the Master Plan, however, the time is now and continuing the momentum of the Marine Group is recommended as the most prudent course of action for Sydney Harbour.

THE MASTER PLAN MUST BE FOLLOWED BY ACTION The Master Plan for the Ports of Sydney envisions increased cargo and cruise activities. For marine cargo, there are plans to grow incrementally following more aggressive and focused marketing. Additionally, there are bold plans for containers and coal exports to take advantage of the Sydney Harbour’s natural attributes and trends in global commerce and logistics. For Sydney’s cruise business, the plan depicts the continuing growth of passenger visitation through the Sydney Marine Terminal. With expansion of the berthing and development of adjacent parcels for tourist related activities, the plan seeks to keep Sydney competitive and welcoming as a port of call for cruise ships.

The proposed development projects would occur at different intervals. The development projects are summarized below:

x Planned Upgrades at Marine Atlantic Ferry Terminal x Deepening of Outer Navigation Channel x Phase 1 Development of New Container Terminal at Sydport Greenfield site x Coal Export Expansion at International Coal Pier/Atlantic Canada Bulk Terminal x Add Dolphin System at Sydney Marine Terminal x Upgrade Multibulk Capability at Atlantic Canada Bulk Terminal x Upgrade Breakbulk Capability at Sydport x Phase 2 Development of Container Terminal at Sydport x Add Second Berth and develop adjacent parcels at Sydney Marine Terminal

The funding and implementation of these projects will be mostly borne by the private companies that own the land and marine businesses. However, there is the opportunity and need to cost share as well as to obtain and leverage government financial support to reflect the economic benefits in jobs, taxes and revenues that are possible with more port activities in Sydney. An Action Plan for the implementation of the Ports of Sydney Master Plan is provided below.

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Action Plan for the Ports of Sydney Master Plan SHORT TERM ACTION PLAN Action Responsible Party Remarks Expand MOU for Marine Seek funding for marketing Marine Group Group and government relations Hire Marketing Firm Marine Group Focus is breakbulk Pursue Environmental Permits Coordinate with new terminals Private/Government for Deepening Project for dredged material placement Get Partners for Container Funding, rail, terminal operator Private Terminal and shipping co. Work with Xstrata Terminal Plan for Coal Export Private

INTERMEDIATE TERM ACTION PLAN Action Responsible Party Remarks Construct Phase 1 Coordinate with channel Private Container Terminal deepening Private/Government Cost Sharing makes sense Deepen Channel Dependent on Xstrata Expand Coal Operation Private Install Dolphin System Sydney Private/Government Will enhance terminal flexibility Marine Terminal Programmed improvements to Upgrade Marine Atlantic Federal Newfoundland ferry system Establish Port Commission, or Recommend Governance Marine Group not LONG TERM ACTION PLAN Action Responsible Party Remarks Construct Phase 2 Container Follows establishment of Private Terminal business Upgrade Breakbulk Private Both ACBT and Sydport Build Second Berth Develop Adjoining Parcels Private/Government Capable of handling two ships near Sydney Cruise facility

Next Steps for Sydney Harbour • Develop a regional approach to the Ports of Sydney; • Continue the M.O.U. among the Marine Group • Develop environmental assessment and permitting for channel deepening • Identify and market specific cargo opportunities • Finalize planning for individual harbour improvement projects; • Develop environmental studies for development projects and obtain permits, then finalize design; • Have facilities in place to be able to serve new/expanded market opportunities

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Table of Contents

EXECUTIVE SUMMARY ...... ES-1

Table of Contents ...... i

1.0 Introduction ...... 1 1.1 Goals of the Master Plan ...... 1 1.2 Master Plan Process ...... 4

2.0 Economic Impact of Current Maritime Industry ...... 6 2.1 Overview of Sydney Harbour Maritime Activity ...... 6 2.2 Overview of Methodology and Analysis ...... 9 2.2.1 Flow of Economic Impacts ...... 9 2.2.2 Economic Impact Measures ...... 10 2.3 Economic Impacts of Marine Cargo Operations ...... 12 2.3.1 Marine Cargo Impact Model Structure ...... 12 2.3.1.1 The Surface Transportation Sector ...... 12 2.3.1.2 The Maritime Services Sector ...... 12 2.3.1.3 Ports Corporation ...... 14 2.3.2 Marine Cargo Impact Model Methodology ...... 14 2.3.3 Estimated Economic Impacts of Marine Cargo Operations ...... 15 2.3.3.1 Job Impacts ...... 16 2.3.3.2 Personal Earnings Impacts ...... 17 2.3.3.3 Business Revenue Impacts ...... 17 2.3.3.4 Tax Impacts ...... 17 2.4 Economic Impacts of Cruise Operations ...... 18 2.4.1 Cruise Impact Model Structure ...... 18 2.4.2 Impact Categories ...... 19 2.3.3 Estimated Economic Impacts of Cruise Operations ...... 20

3.0 Inventory Analysis of Existing Marine Facilities, Properties, and Transportation Networks in Sydney Harbour ...... 21 3.1 Inventory of Existing Marine Terminals and Facilities ...... 21 3.1.1 Sydney Marine Terminal Facility ...... 27 3.1.2 Atlantic Canada Bulk Terminal ...... 28 3.1.3 Sydport Industrial Park ...... 30 3.1.4 International Coal Pier ...... 31 3.1.5 Marine Atlantic Ferry Terminal ...... 32 3.1.6 MV Osprey Limited ...... 34 3.1.7 Harbourside Commercial Park ...... 34 3.1.8 Victoria Junction Site ...... 36 3.1.9 Sydney Engineering and Drydock ...... 37 3.1.10 Petroleum Bulk Storage Facility ...... 37 3.2 Inventory of Transportation Networks: Rail, Road and Navigation Channel ...... 38 3.2 Inventory of Transportation Networks: Rail, Road and Navigation Channel ...... 38

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4.0 Potential Cargo Market Opportunities ...... 45 4.1 Sydney Harbour Cargo Market ...... 45 4.1.1 Coal and Coke Market ...... 45 4.1.2 Other Cargo Markets ...... 45 4.2 Assets of Competitive Port Cargo Facilities...... 46 4.3 Cargo Markets at Competing Ports ...... 48 4.3.1 Bulk Market ...... 48 4.3.1.1 Bulk Import Market ...... 48 4.3.1.2 Bulk Export Market ...... 53 4.3.2 Breakbulk Market ...... 58 4.3.2.1 Breakbulk Import Market ...... 58 4.3.2.2 Breakbulk Export Market ...... 63 4.3.3 Container Market ...... 68 4.4 Trade Routes and Market Niches ...... 70 4.4.1 Breakbulk Trades Assessment ...... 70 4.4.1.1 Breakbulk Import Market ...... 70 4.4.1.2 Breakbulk Export Market ...... 74 4.4.2 Container Market ...... 78 4.4.3 Breakbulk Commodities/Niche Market Assessment ...... 82 4.4.3.1 Breakbulk Import Commodities ...... 82 4.4.3.2 Breakbulk Export Commodities ...... 84 4.5 Potential Market Opportunities Assessment ...... 85 4.5.1 Dry Bulk Market Opportunity Assessment ...... 85 4.5.2 Machinery/Project Cargo Market Opportunity Assessment ...... 86 4.5.3 Steel Market Opportunity Assessment ...... 87 4.5.4 Forest Products Market Opportunity Assessment ...... 89 4.5.5 Container Market Opportunity Assessment ...... 90

5.0 Cruise Industry Trends and Market Analysis ...... 95 5.1 Worldwide Cruise Market Overview ...... 95 5.1.1 Cruise Vacationer Demographics ...... 96 5.1.2 Cruise Vessel Growth Trends ...... 97 5.1.3 Design vessel requirements ...... 98 5.1.4 Suggested design vessels for Sydney ...... 99 5.2 Atlantic Canada Cruise Region ...... 100 5.2.1 Atlantic Canada Cruise Trends ...... 100 5.3 Sydney Cruise Operations ...... 103 5.3.1 Sydney Overview ...... 103 5.3.2 Sydney’s Current Situation ...... 104 5.3.3 Cruise sectors and itinerary patterns impacting Sydney ...... 110 5.3.3.1 Canada & New England ...... 110 5.3.3.2 Atlantic Coast (Small Ship Deployments) ...... 112 5.3.3.3 Transatlantic ...... 113 5.3.3.4 Round-the-World Cruises ...... 113 5.3.3.5 Fit of Sydney within Identified Target Sectors ...... 114 5.3.4 Cruise port competitors impacting the Ports of Sydney ...... 115 5.3.5 Cruise Line Needs and Selection Criteria ...... 118

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5.3.6 Successful Destination Characteristics ...... 120 5.4 Cruise line feedback ...... 123 5.5 Sydney Cruise Growth Opportunities ...... 124 5.5.1 General Approach to Forecast Preparation – Growth Scenarios ...... 124 5.5.2 Projections Overview...... 125 5.6 Ports of Sydney Future Traffic Analysis ...... 125 5.7 Sydney Strategies for Cruise Growth and Service ...... 127 5.7.1 Overview ...... 127

6.0 Facility Requirements, Current Capacity and Potential Development Needs ...... 128 6.1 Facility Requirements Needed to Meet Market Opportunities ...... 128 6.1.1 Containers ...... 129 6.1.2 Bulk (Coal) ...... 130 6.1.3 Autos...... 130 6.1.4 Break Bulk and/or Project Cargo ...... 131 6.2 Proposed Development Options and Opportunities ...... 132 6.2.1 Facility/Cargo Type Opportunities ...... 134 6.2.2 Container Opportunities...... 136 6.2.3 Bulk Coal Opportunities...... 136 6.2.4 Break Bulk and Project Cargo Opportunities: ...... 137 6.2.5 Other Opportunities ...... 137 6.3 Identified Development Projects ...... 138 6.3.1 Expand the International Coal Terminal ...... 138 6.3.2 Make Improvements to Atlantic Canada Bulk Terminal for Breakbulk and Bulk Export ...... 141 6.3.3 Upgrade Existing Facilities at Marine Atlantic Terminal: ...... 142 6.3.4 Develop Break Bulk/General Cargo Terminal at Sydport Industrial Park Piers ...... 143 6.3.5 Develop New Container Complex on Sydport Greenfield Site ...... 147 6.3.6 Sydney Marine Terminal ...... 150 6.3.7 Deepen the Main Harbour Navigation Channel to -17 Meters ...... 153

7.0 Projected Financial and Economic Impact Assessments ...... 155 7.1 Financial Assessment ...... 155 7.2 Economic Impact of Projected Marine Cargo Development ...... 156 7.3 Economic Impact of Projected Cruise Passenger Activity ...... 157 7.4 Economic Impact of Channel Deepening...... 158

8.0 Environmental Overview of Port Master Plan ...... 160 8.1 Environmental Overview of the Port Master Plan ...... 160 8.1.1 Land Use ...... 160 8.1.2 Geology ...... 161 8.1.3 Water Resources ...... 161 8.1.4 Habitat and Wildlife ...... 163 8.1.4.1 Terrestrial Habitat ...... 163 8.1.4.2 Marine Habitat ...... 163 8.1.4.3 Significant Habitats and Species at Risk ...... 164 8.1.5 Air Quality ...... 165

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8.2 Environmental Issues of Concern ...... 165

9.0 Strategic Marketing and Management Plan ...... 168 9.1 Ports of Sydney Governance ...... 168 9.1.1 Background on Governance ...... 169 9.1.2 Options for Governance ...... 170 9.1.2.1 Expand Memorandum of Understanding for Marine Group ...... 171 9.1.2.2 Expand Role of Sydney Ports Corporation...... 171 9.1.2.3 Create Sydney Harbour Port Commission ...... 172 9.1.3 Recommended Plan for Management and Marketing of Ports of Sydney ...... 173 9.1.3.1 Marketing ...... 173 9.1.3.2 Government Relations and Regulatory Affairs ...... 175 9.1.3.3 Fund Raising for Harbour wide Issues ...... 175 9.1.3.4 Investigating Long Term Governance Organization ...... 176 9.1.3.5 Port Market Branding ...... 176

10.0 Master Plan for the Ports of Sydney ...... 178

References ...... 181

List of Tables Table 2-1 Historical Cruise Activity in Cape Breton ...... 8 Table 2-2 Economic Impacts of Sydney Harbour Marine Cargo Operations – 2006 ...... 15 Table 2-3 Distribution of Direct Jobs by Place of Residency ...... 16 Table 2-4 Economic Impact of Cruise Operations at the Port of Sydney ...... 20 Table 4-1 Container Terminal Facilities in Atlantic Canada and U.S. North Atlantic ...... 46 Table 4-2 Breakbulk Terminal Facilities in Atlantic Canada and U.S. North Atlantic ...... 47 Table 4-3 Bulk Import Market to Atlantic Canada by Commodity – 2000-2004 ...... 49 Table 4-4 Bulk Import Market to Atlantic Canada by Port – 2000-2004 ...... 50 Table 4-5 Bulk Import Market through Atlantic Canada Ports - 2004 ...... 50 Table 4-6 Bulk Import Market to the United States by Commodity – 2003-2006 ...... 51 Table 4-7 Bulk Import Market to the United States by Port – 2003-2006 ...... 52 Table 4-8 Bulk Import Market through U.S. North Atlantic Ports - 2006 ...... 52 Table 4-9 Bulk Export Market from Atlantic Canada by Commodity – 2000-2004 ...... 53 Table 4-10 Bulk Export Market from Atlantic Canada by Port – 2000-2004 ...... 54 Table 4-11 Bulk Export Market through Atlantic Canada Ports - 2004 ...... 55 Table 4-12 Bulk Export Market from U.S. North Atlantic by Commodity – 2003-2006 ...... 56 Table 4-13 Bulk Export Market from U.S. North Atlantic by Port – 2003-2006 ...... 57 Table 4-14 Bulk Export Market through U.S. North Atlantic Ports - 2006 ...... 57 Table 4-15 Breakbulk Import Market to Atlantic Canada by Commodity – 2000-2004 ...... 59 Table 4-16 Breakbulk Import Market to Atlantic Canada by Port – 2000-2004 ...... 60 Table 4-17 Breakbulk Import Market through Atlantic Canada Ports - 2004 ...... 61 Table 4-18 Breakbulk Import Market to the U.S. North Atlantic and Great Lakes by Commodity 2003-2006 ...... 61 Table 4-19 Breakbulk Import Market to the United States by Port – 2003-2006 ...... 62 Table 4-20 Breakbulk Import Market through U.S. N Atlantic & Great Lakes Ports - 2006 ...... 63 Table 4-21 Breakbulk Export Market from Atlantic Canada by Commodity – 2000-2004 ...... 64 Table 4-22 Breakbulk Export Market from Atlantic Canada by Port – 2000-2004 ...... 65 Table 4-23 Breakbulk Export Market through Atlantic Canada Ports - 2004 ...... 65 Table 4-24 Breakbulk Export Market from U.S. N Atlantic and Great Lakes by Commodity 2003-2006 .. 66 Table 4-25 Breakbulk Export Market from U.S. N Atlantic and Great Lakes by Port 2003-2006 ...... 67 Table 4-26 Breakbulk Export Market from U.S. North Atlantic and Great Lakes Ports - 2006 ...... 67 Table 4-27 Historical Breakbulk Import Trades to Atlantic Canada Ports ...... 70 Table 4-28 Historical Market Shares of Breakbulk Import Trades to Atlantic Canada ...... 71

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Table 4-29 Atlantic Canada Ports Serving Major Import Breakbulk Trade Routes - 2004 ...... 72 Table 4-30 Historical Breakbulk Import Trades to U.S. No. Atlantic and Great Lakes ...... 72 Table 4-31 Historical Market Shares of Breakbulk Import Trades to U.S. North Atlantic and Great Lakes 73 Table 4-32 U.S. North Atlantic and Great Lakes Ports Serving Import Breakbulk Trade Routes - 2006 .... 73 Table 4-33 Historical Breakbulk Export Trades from Atlantic Canada Ports ...... 74 Table 4-34 Historical Market Shares of Breakbulk Export Trades from Atlantic Canada ...... 75 Table 4-35 Atlantic Canada Ports Serving Major Export Breakbulk Trade Routes - 2004 ...... 75 Table 4-36 Historical Breakbulk Export Trades from U.S. North Atlantic and Great Lakes ...... 76 Table 4-37 Historical Breakbulk Export Trades from U.S. North Atlantic and Great Lakes ...... 77 Table 4-38 U.S. North Atlantic and Great Lakes Ports ...... 77 Serving Export Breakbulk Trade Routes - 2006 ...... 77 Table 4-39 Historical Top Breakbulk Import Commodities to Atlantic Canada Ports by Trade Route ...... 82 Table 4-40 Historical Top Breakbulk Import Commodities to U.S. North Atlantic and Great Lakes by Trade Route ...... 83 Table 4-41 Historical Top Breakbulk Export Commodities from Atlantic Canada Ports by Trade Route ... 84 Table 4-42 Historical Top Breakbulk Export Commodities from U.S. North Atlantic and Great Lakes by Trade Route ...... 85 Table 4-43 Comparison of Through Transportation Cost for Steel Northern Europe to Great Lakes Steel Markets ...... 88 Table 4-44 Comparison of Transshipment Routing from Sydney to the Great Lakes vs. Direct Call by Ocean Going Vessel ...... 88 Table 5-1 Cruise Demographic Profiles, North Americans ...... 96 Table 5-2 Suggested Design Vessels for Sydney ...... 100 Table 5-3 Fit of Sydney within Identified Target Sectors (Summary) ...... 114 Table 5-4 Competitor Ports in the Region (Summary) ...... 116 Table 5-5 Sydney Competitors for Cruise Operations ...... 118 Table 5-6 Destination Selection: What is Important to the Cruise Lines? ...... 119 Table 5-7 Attractiveness of Sydney vs. Cruise Line Criteria ...... 123 Table 7-1 Capital Cost Assessment ...... 155 Table 7-2 Wharfage and Berthage Revenues (Based on 2007 Halifax rates) ...... 156 Table 7-4 Projected Economic Impacts Generated by Cruise Scenario “A” ...... 157 Table 7-5 Projected Economic Impacts Generated by Cruise Scenario “B” ...... 158 Table 7-6 Projected Economic Impacts Generated by Cruise Scenario “C” ...... 158 Table 7-7 Projected Economic Impacts of Deepening Navigation Channel ...... 159

List of Figures Figure 1-1 Location of Sydney Harbour ...... 2 Figure 1-1 Location of Sydney Harbour ...... 2 Figure 1-2 Location of Marine Facilities and Terminals ...... 3 Figure 2-1 Historical Import Tonnage for Sydney Harbour ...... 6 Figure 2-2 Historical Import Tonnage by Trading Partner ...... 7 Figure 2-3 Historical Export Tonnage for Sydney Harbour ...... 7 Figure 2-4 Historical Export Tonnage by Trading Partner ...... 8 Figure 2-5 Flow of Economic Impacts Generated By Marine Activity ...... 10 Figure 3-1 Overview of Sydney Harbour and Facilities ...... 22 Figure 3-2 Marine Terminals and Facilities – Sydney Harbour South Arm ...... 23 Figure 3-3 Marine Terminals and Facilities – Sydney Harbour Northwest Arm...... 24 Figure 3-4 Marine Terminals and Facilities – Sydney River ...... 25 Figure 3-5 Marine Terminals and Facilities – Inland ...... 26 Figure 3-6 Sydney Marine Terminal ...... 27 Figure 3-7 Atlantic Canada Bulk Terminal ...... 29 Figure 3-8 Sydport Industrial Park ...... 30 Figure 3-9 International Coal Pier ...... 31 Figure 3-10 Marine Atlantic Ferry Terminal ...... 32 Figure 3-11 MV Osprey Limited ...... 34 Figure 3-12 Harbourside Commercial Park ...... 35

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Figure 3-13 Victoria Junction Site ...... 36 Figure 3-14 Imperial Oil Bulk Storage Facility ...... 37 Figure 3-15 National Trans Canada Highway System ...... 38 Figure 3-16 Nova Scotia Roadway Transportation Links ...... 39 Figure 3-17 Rail Lines and Roads of the Sydney Area ...... 40 Figure 3-18 Rail Lines ...... 42 Figure 3-19 CBCNSR Rail Yard ...... 43 Figure 3-20 Approximate Navigation Channel in Sydney Harbour ...... 44 Figure 4-1 Illustration of Sailing Distances ...... 79 Figure 4-2 Container Vessel Class/Size and Anticipated Operating Draft Requirements ...... 92 Figure 5-1 Historic Canada & New England Cruise Passenger Capacity, 2000 - 2007 ...... 102 Figure 5-2 Cruise Passenger Throughput - Atlantic Canada Port, 1997 - 2006 ...... 102 Figure 5-3 Sydney Cruise Line Activity, 2007 ...... 104 Figure 5-4 Sydney Cruise Line Activity, 2008 ...... 104 Figure 5-5 Cruise Passenger Throughput, 2000 – 2008* ...... 106 Figure 5-6 Cruise Calls, 2000 - 2007...... 106 Figure 5-7 Cruise Passengers Per Vessel, 2000 – 2008*...... 107 Figure 5-8 Historical Passenger Throughput Pattern by Month, 2000 - 2007 ...... 107 Figure 5-9 Historical Vessel Throughput Pattern by Month, 2000 – 2007 ...... 108 Figure 5-10 Historical Percentage of Passenger Throughput by Day, 2000 - 2007...... 109 Figure 5-11 Historical Calls Per Day, 2000 – 2007 ...... 110 Figure 6-1 Warehouse Handling Breakbulk/Neobulk Products ...... 132 Figure 6-2 CN Intermodal Routes Access Major Markets ...... 136 Figure 6-3 Development Plan-International Coal Terminal Option 1 ...... 139 Figure 6-3a Development Plan-International Coal Terminal Option 2 ...... 140 Figure 6-4 Development Plan-Atlantic Canada Bulk Terminal...... 144 Figure 6-5 Development Plan-Marine Atlantic Terminal ...... 145 Figure 6-6 Development Plan-Sydport Breakbulk Terminal ...... 146 Figure 6-7 Renderings Depicting Potential Container Terminal Designs ...... 147 Figure 6-8 Development Plan-Container Terminal ...... 149 Figure 6-9 Development Plan-Sydney Marine Terminal ...... 151 Figure 6-10 Future Expansion Plan-Sydney Marine Terminal ...... 152 Figure 10-1 Ports of Sydney Master Plan ...... 180

Appendices Appendix A Marine Facilities Datasheets and Property Boundaries Appendix B Cruise Market Study Appendix C Cost Estimates-Sydport Breakbulk Terminal Appendix D Port Governance Case Studies

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1.0 Introduction

Sydney Harbour is natural ocean gateway. Located in Cabot Strait on the northeast shore of Cape Breton Island, the port facilities of Sydney and North Sydney offer year round shelter that represents the First Port of Call in Nova Scotia and North America. As illustrated in Figure 1-1, Sydney Harbour is strategically located in the northeast coastal region of Nova Scotia. Collectively called the Ports of Sydney, the maritime terminals within Sydney Harbour are located along the six kilometer (km) “Y” shaped waterway that is used for shipping activities.

The Ports of Sydney handle passengers and a diversity of waterborne cargoes. With the Marine Atlantic ferry service in North Sydney and the Sydney Marine Terminal’s cruise passenger facility, tens of thousands for passengers are accommodated annually. Other facilities handle coal, petroleum, breakbulk and project cargoes in well sheltered marine facilities with ample deep water, lengths of wharf, storage areas and rail and road connections.

The Ports of Sydney are comprised of a number of maritime terminals. A Marine Group has been formed representing all of the key owners and operators of marine terminals in the Ports of Sydney. The Marine Group has commissioned and led the development of this Master Plan. Members of the Marine Group are: x Laurentian Energy Corporation Inc – Owns Sydport Industrial Park x Logistec Stevedoring (Atlantic) Inc – Operates International Coal Piers x Marine Atlantic Inc – Federal Newfoundland Ferry Service x Nova Scotia Power Inc – Owns International Coal Piers x Provincial Energy Ventures Inc – Operates Atlantic Canada Bulk Terminal (ACBT) x Sydney Steel Company, now Nova Scotia Lands Inc., – Owns the ACBT site. x Sydney Ports Corporation Inc – Operates Sydney Marine Terminal

Figure 1-2 depicts the location of these marine terminals. Marine Atlantic and MV Osprey are located in downtown North Sydney. Sydport is situated along the western banks of the South Arm of Sydney Harbour. Across the South Arm waterway from Sydport are the International Coal Piers and the Atlantic Canada Bulk Terminal. The Sydney Marine Terminal is located further south along the eastern bank of the South Arm in downtown Sydney.

1.1 Goals of the Master Plan As an initial step in the master planning process, members of the Marine Group established a clear and concise set of goals for the Master Plan. The importance of setting these goals should not be understated. For the first time, the separate owners and operators of the marine terminals in Sydney Harbour worked as a team to formulate objectives for the future maritime success of the Port.

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Figure 1-1 Location of Sydney Harbour

Figure 1-1 Location of Sydney Harbour

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The following are the six goals of the Master Plan: • Present a “consolidated” vision of Sydney Harbour in support of obtaining investment for future development; • Identify real opportunities and ways to implement these opportunities; • Demonstrate the economic impact of existing port activities and of the future potential; • Develop a plan that positions the port to be successful while attempting to accommodate the business plans of individual property owners; • Develop Management Structure Recommendations to promote the assets of Sydney Harbour; and • Develop a Plan that balances port development with environmental sustainability.

1.2 Master Plan Process The development of this Master Plan involved the gathering of data on existing conditions of each of the Harbour’s marine assets; assessing current and potential market opportunities for the Harbour; estimating the current economic impacts of these marine activities; formulating future development projects to capture the identified opportunities; and evaluating options for Harbourwide port governance to advance the region in port and marine enterprise.

The Master Plan has been prepared as a collaborative effort lead by members of the Marine Group with the support of port consultants of the TEC Inc. team. The effort involved several workshops that focused on key elements of the plan including:

Kick Off Meetings: March 2007 x Set goals and decision criteria x Initiate contacts and protocols x Begin data collection Progress Meeting #1: May 2007 x Report on market and marine facility potential x Report on cruise market status in region x Present status of Plan at Sydney Ports Day Progress Meeting #2: July 2007 x Report on inventory of facilities x Report on port economic impact x Report on options for port governance x Report port capacity and potential future project Progress Meeting #3: September 2007 x Review draft Master Plan x Conduct Public Information Meeting

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Individuals in The Marine Group have many years of experience in Sydney Harbour and provided expertise in a number of cargo, vessel operator, passenger and terminal operations that kept the meetings interesting and focused on realistic opportunities for the future. The TEC team provided an interdisciplinary group of experienced professionals that provided information and expertise in the following:

TEC – Port Planning, market opportunities, governance and terminal planning Martin & Associates – Economic impact and cargo opportunities Bermello Ajamil – Cruise market and strategic opportunities CBCL Limited – Port asset inventory and local coordination

The Master Plan document begins with presenting an understanding of the economic impacts of current port activities in Sydney Harbour. While the strategic location of the Harbour and the availability of ample port capacity are great in the Ports of Sydney, it is also illuminating to reveal the financial significance of existing port activities given the much greater potential that is available within the Port. The next section of the Master Plan establishes the inventory of each of the port assets as well as the road, rail and navigation elements of the region. The cargo market is addressed; followed by the cruise ship discussion. The analysis and recommended future port development projects are then presented. An overview of environmental impacts and sustainability is provided. Management concepts and strategies follow and conclude the Master Plan. Appendices include data sheets and general arrangement plans of each marine facility and larger discussion of cruise passenger business.

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2.0 Economic Impact of Current Maritime Industry

Jobs, payrolls, revenues, and taxes are generated from port and maritime activities in Sydney Harbour. Estimating the economic significance of these port activities is a key to understanding the current role of trade, tourism, and transportation in the region as well as the link between prudent future investment and potential benefits to Sydney. This section presents the estimated economic impacts of maritime activity in Sydney Harbour on the local and regional economies. Economic impacts of both marine cargo and cruise activities are presented. The methodology used to develop the assessments is also discussed. The economic impacts presented are for current maritime activity in the harbour. A description of historic maritime activity in Sydney Harbour is presented below.

2.1 Overview of Sydney Harbour Maritime Activity

Maritime cargo activity in Sydney Harbour occurs at several terminals throughout the harbour. Several of the Harbour’s terminals are proprietary in nature, handling specific commodities for specific customers. This includes coal handled at the International Coal Pier; slag handled at the Atlantic Canada Bulk Terminal, fish handled at the MV Osprey terminal and truck ferry traffic at the Marine Atlantic terminal. Petroleum is also discharged at the Sydney Marine Terminal where the Harbour’s cruise activities are accommodated. Some of the Harbour’s terminals are capable of handling general cargo, currently or potentially in the future as new markets develop.

Historically, marine cargo markets have been dominated by a limited number of bulk commodities. Figure 2-1 illustrates the historical bulk tonnage imports handled in Sydney Harbour. The figure shows that coal and coke are the principal import commodities in the Harbour, and are destined for local power generation. Coal and coke import tonnage has been growing. Between 2000 and 2004, import tonnage has grown an average 13.6% per year. 2,000

1,500

1,000

500 Thousand Tons 0 2000 2001 2002 2003 2004

Bituminous Coal Petroleum Coke

Coke Of Coal, Lignite Other Metal Compounds

Source: Statistics Canada Figure 2-1 Historical Import Tonnage for Sydney Harbour

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Figure 2-2 shows the originating countries of Sydney Harbour’s imports. Colombia, the United States and Venezuela are the principal suppliers of the coal and coke accounting for 97% of the coal and coke imports between 2000 and 2004.

1,200

1,000

800

600

400

Thousand Tons Thousand 200

0 2000 2001 2002 2003 2004

Colombia United States Venezuela Other

Source: Statistics Canada Figure 2-2 Historical Import Tonnage by Trading Partner

140 120 100 80 60

Thousand Tons Thousand 40 20 0 2000 2001 2002 2003 2004

M etal Waste and Scrap Bituminous Coal

Iron Ores and Conc. Slag, Ash, And Residues

Salt Incl Rock, Brine Railway Track Material

Source: Statistics Canada Figure 2-3 Historical Export Tonnage for Sydney Harbour

The Sydney Harbour export market is less defined than the import market. As Figure 2-3 shows, historically the export market has consisted of “spot market” movements of products overseas. Scrap metal is an exception with exports occurring between 2002 and 2004. However, this market is declining.

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Figure 2-4 shows the principal destination markets for Sydney Harbour exports. The figure shows the United States and China are the primary markets, accounting for 88% of the export tonnage between 2000 and 2004.

140 120 100 80 60

Thousand Tons Thousand 40 20 0 2000 2001 2002 2003 2004

United States China Italy Panama Taiwan Mexico Brazil Russia

Source: Statistics Canada Figure 2-4 Historical Export Tonnage by Trading Partner

The cruise market for Cape Breton attracted 36 vessel calls in 2006 carrying over 46,000 passengers. Table 2-1 shows the 2006 activity represented a decline of 40% in vessel calls from peak levels two years earlier. However, the deployment of larger vessels in recent years has contributed to a smaller decline (23%) from the peak year passenger count.

Table 2-1 Historical Cruise Activity in Cape Breton

2000 2001 2002 2003 2004 2005 2006

Calls 23 42 40 46 60 47 36

Passengers 14,668 39,927 54,734 48,706 60,410 58,089 46,531

Pass. / Ship 638 936 1,368 1,059 1,007 1,236 1,293 Source: Sydney Ports Corporation

The following section presents an assessment of the economic impacts of Sydney Harbour’s maritime activity on the local and regional economies.

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2.2 Overview of Methodology and Analysis

An economic impact assessment was made of the contributions marine cargo and vessel activities at Sydney Harbour terminals have on the local and regional Cape Breton Regional Municipality (CBRM)/Cape Breton economies. The terminals included in the assessment are Laurentian Energy, Logistec Stevedoring, Marine Atlantic, MV Osprey, Provincial Energy Ventures and the Sydney Ports Corporation. Impacts are estimated in terms of jobs, personal earnings, business revenue, and provincial and local taxes. The impacts are estimated for marine cargo, vessel activity and passenger cruise operations in 2006 (the last full year of data availability). In addition to quantifying the baseline impacts of Sydney Harbour, an economic impact model has been developed of the Harbour’s operations. The model can be used in evaluating the sensitivity of impacts to changes in tonnage, labour productivity, labour work rules, commodity mix, inland origins/destinations of commodities and vessel size. The model can also be used to evaluate the impacts of new terminal development and channel deepening, as well as for annual updates. The model is used to estimate future economic impacts generated by proposed harbour developments addressed later in this report.

The methodology used in this analysis has been developed by Martin Associates and has been used to estimate the economic impacts of seaport activity at public and private marine terminals of more than 200 United States and Canadian ports. The methodology has been used in studies that have been presented before the International Trade Commission, the Council of Economic Advisors, the Federal Reserve Board, the Canadian Justice Department, and two U.S. Presidents.

The remainder of this section presents an overview of the economic impact analysis and addresses:

x the flow of economic impacts through the local and regional economies x definition of economic impact measures

2.2.1 Flow of Economic Impacts

Waterborne cargo activity at a seaport contributes to the local and regional economy by generating business revenue to local and national firms providing vessel and cargo handling services at the marine terminals. These firms, in turn, provide employment and income to individuals, and pay taxes to provincial and local governments. Figure 2-5 shows how activity at marine terminals generates impacts throughout the local, provincial and national economies. As this exhibit indicates, the impact of a seaport on a local, provincial or national economy cannot be reduced to a single number, but instead, the seaport activity creates several impacts. These are the revenue impact, employment impact, personal income impact, and tax impact. These impacts are non-additive. For example, the income impact is a part of the revenue impact, and adding these impacts together would result in double counting. The figure shows graphically how activity at Sydney Harbour’s marine terminals generates the four impacts.

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Figure 2-5 Flow of Economic Impacts Generated By Marine Activity

At the outset, activity at the port generates business revenue for firms that provide services. This business revenue impact is dispersed throughout the economy in several ways. It is used to hire people to provide the services, to purchase goods and services, and to make Federal, provincial and local tax payments. The remainder is used to pay stock-holders, retire debt, make investments, or is held as retained earnings. It is to be emphasized that the only portions of the revenue impact that can be definitely identified as remaining in the local economy are those portions paid out in salaries to local employees, for local purchases by individuals and businesses directly dependent on the seaport, in contributions to provincial and local taxes, in lease payments to the terminal owners by tenants, and berthage and dockage fees paid to the terminal operators.

2.2.2 Economic Impact Measures

The impacts are measured separately for Sydney Harbour’s cargo activity and cruise activity. The impacts are measured in terms of:

x Jobs (direct, induced and indirect); x Personal income; x Business revenue; x Provincial and local taxes; x Federal taxes.

Each impact measurement is described below:

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x Direct, Indirect and Induced jobs

Direct jobs are those that would not exist if cargo and cruise activities at Sydney Harbour were to cease. Direct jobs created by marine cargo activity at Sydney Harbour terminals are those jobs with the firms directly providing cargo handling and vessel services, including trucking companies, terminal operators and stevedores, members of the International Longshoremen’s Association (ILA) and non-ILA dock workers, freight forwarders and customhouse brokers, vessel agents, pilots and tug assist companies, and shippers directly dependent upon the use of Sydney Harbour. Direct employees created by the cruise operations include the jobs with the firms providing the direct vessel services -- tugs, pilots, longshoremen, line handlers, local advertising firms, caterers, liquor wholesalers, linen companies, security firms, waste disposal firms, parking, local transportation -- as well as the firms providing services to the passengers on the vessels -- hotels, taxi cabs, restaurants and tour packages

Indirect jobs are created throughout the Sydney Harbour area as the result of purchases for goods and services by the firms directly impacted by Harbour activity and the firms providing services to cargo and cruise passenger operations. The indirect jobs are measured based on actual local purchase patterns of the directly dependent firms, and occur with such industries as utilities, office supplies, contract service providers, maintenance and repair, and construction.

Induced jobs are jobs created in the Sydney Harbour area by the purchases of goods and services by those individuals directly employed due to the Harbour’s maritime activity. These jobs are based on the purchase patterns of Nova Scotia residents. The induced jobs are jobs with grocery stores, restaurants, health care providers, retail stores, local housing/construction industry, and transportation services, as well as with wholesalers providing the goods to the retailers.

x Personal income impact consists of wages and salaries received by those directly employed by Harbour activity, and includes a re-spending impact, which measures the personal consumption activity in Sydney Harbour of those directly employed as the result of Sydney Harbour operations. Indirect personal income measures the wages and salaries received by those indirectly employed.

x Business revenue consists of total business receipts by firms providing services in support of the marine cargo activity and cruise operations. Local purchases for goods and services made by the directly impacted firms are also measured. These local purchases by the dependent firms create the indirect impacts.

x Provincial and local taxes include taxes paid by individuals as well as firms dependent upon Sydney Harbour cargo and cruise

x Federal taxes include taxes on income paid by individuals.

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2.3 Economic Impacts of Marine Cargo Operations

A computer model was developed to estimate the economic impacts of Sydney Harbour marine cargo operations. The impacts are measured for calendar year 2006. The cargo impact model is designed to test the sensitivity of impacts to changes in such factors as marine tonnage levels, seaport productivity and work rules, new marine facilities development, inland distribution patterns of marine cargo, number of vessel calls and the introduction of new ocean carrier service. Also, the marine cargo impact model can be used to assess the economic benefits of increased maritime activity due to infrastructure development and the opportunity cost of not undertaking specific maritime investments such as dredging, new terminal development or warehouse development.

2.3.1 Marine Cargo Impact Model Structure

The three types of economic impacts are created throughout various business sectors of the provincial and local economies. Specifically, three distinct economic sectors are impacted as a result of activity at the marine terminals. These are the:

x Surface Transportation Sector x Maritime Services Sector x Port Corporation

Within each sector, various participants are involved. Separate impacts are estimated for each of the participants. A discussion of each of the economic impact sectors is provided below, including a description of the major participants in each sector.

2.3.1.1 The Surface Transportation Sector

The surface transportation sector consists of both the railroad and trucking industries. The trucking firms and railroads are responsible for moving the various cargoes between the marine terminals and the inland origins and destinations.

2.3.1.2 The Maritime Services Sector

This sector consists of numerous firms and participants performing functions related to the following maritime services:

x Cargo Marine Transportation x Vessel Operations x Cargo Handling x Federal, Provincial, and Local Government Agencies

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A brief description of the major participants in each of these four categories is provided below:

x Cargo Marine Transportation - Participants in this category are involved in arranging for inland and water transportation for export or import freight. The freight forwarder/customshouse broker is the major participant in this category. The freight forwarder/customshouse broker arranges for the freight to be delivered between the terminals and inland destinations, as well as the ocean transportation. This function performed by freight forwarders and customshouse brokers is most prevalent for general cargo commodities.

x Vessel Operations - This category consists of several participants. The steamship agents provide a number of services for the vessel as soon as it enters the port; the agents arrange for pilot services and towing, for medical and dental care of the crew, and for ship supplies. The agents are also responsible for vessel documentation. In addition to the steamship agents arranging for vessel services, those providing the services include:

- Chandlers - supply the vessels with ship supplies (food, clothing, nautical equipment, etc.)

- Towing firms - provide the tug service to guide the vessel to and from port

- Pilots - assist in navigating the vessels to and from the marine terminals

- Bunkering firms - provide fuel to the vessels

- Marine surveyors - inspect the vessels and the cargo

- Shipyards/marine construction firms - provide repairs, either emergency or scheduled as well as marine pier construction and dredging.

x Cargo Handling – This category involves the physical handling of the cargo at the terminals between the land and the vessel. Included in this category are the following participants:

- Longshoremen - include members of the International Longshoremen's Association (ILA), as well as non-ILA dockworkers that are involved in the loading and unloading of cargo from the vessels, as well as handling the cargo prior to loading and after unloading.

- Stevedoring firms - manage the longshoremen and cargo-handling activities.

- Terminal operators - are often stevedoring firms who operate the maritime terminals where cargo is loaded and off-loaded.

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x Government Agencies - This service sector involves Federal, provincial and local government agencies that perform services related to cargo handling and vessel operations in the harbour. Coast Guard and Customs/Border Crossing employees are involved. These services are provided by the government offices located in the Sydney area or Nova Scotia.

2.3.1.3 Ports Corporation

The ports corporation sector includes those individuals employed by the Sydney Ports Corporation whose purpose is to oversee port activity at the Corporation-managed Sydney Marine Terminal. The terminal has facilities used to unload petroleum and other products, berth a number of miscellaneous commercial and government sector vessels, and berth cruise ships. The impacts of cruise operations are provided in Section 2.4.

2.3.2 Marine Cargo Impact Model Methodology

The impacts of Sydney Harbour were estimated based on telephone and personal interviews with 24 firms or agencies dependent to some extent on maritime activity in Sydney Harbour. This represents the universe of the marine cargo and cruise serving Sydney Harbour. The identification of these firms and agencies were provided by the Sydney Ports Corporation, terminal operators, other dependent businesses, and Federal and provincial agencies. It is to be emphasized that a 100% response rate was achieved from these firms. The direct impacts are measured at the firm level of detail, and aggregated to develop the harbourwide impacts for cargo and cruise operations. Each firm surveyed provided detailed employment levels (both full time and part time), annual payroll, local purchases and the locations of where the employees reside.

The induced impacts are based on the current expenditure profile of residents in Nova Scotia, as estimated by the Statistics Canada, "Spending Patterns in Canada, 2005". Typically personal expenditures are made in the following the consumption categories: x Housing; x Food at Restaurants; x Food at Home; x Entertainment; x Health Care; x Home Furnishings; x Transportation Equipment and Services.

The estimated consumption expenditure generated as a result of the re-spending impact is distributed across these consumption categories. Associated with each consumption category is the relevant retail and wholesale industry. Jobs to sales ratios in each industry are then computed for Nova Scotia and induced jobs are estimated for the relevant consumption categories. It is to be emphasized that induced jobs are only estimated at the

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retail and wholesale level, since these jobs are most likely generated in the Sydney Harbour area. Further levels of induced jobs are not estimated since it is not possible to defensibly identify geographically where the subsequent rounds of purchasing occur.

The indirect impacts are estimated based on the local purchases by the directly dependent firms, combined with indirect job, income and revenue coefficients for the supplying industries in Nova Scotia as developed by Statistics Canada Input-Output Division.

2.3.3 Estimated Economic Impacts of Marine Cargo Operations The economic impacts of marine cargo operations in Sydney Harbour are presented in this section. It is noted that the Marine Atlantic ferry passenger and freight operations are included in this category. Also, harbour fees collected from all vessel types are included in this category; these include marine service fees collected by the Coast Guard. Due to the unique nature of the terminals’ operations with regard to cargo type, and the need to maintain confidentiality, the impact results are presented in the aggregate to prevent the disclosure of impacts generated by specific terminals and commodities.2 Table 2-2 presents the economic impacts of Sydney Harbour marine cargo operations on the local and regional economies. These impacts are further discussed in the following sections. Table 2-2 Economic Impacts of Sydney Harbour Marine Cargo Operations – 20063 Category Impact Jobs Direct 833 Indirect 864 Induced 428 Total 2,125 Earnings ($1,000) Direct $31,817 Indirect/Induced(1) $31,499 Total $63,316 Business Revenue ($1,000) Direct $79,409 Indirect $52,622 Total $132,031 Taxes ($1,000) Federal $34,900 Provincial $20,700 Local $1,377 Total $56,977 (1) Harbour Fees ($1,000) indirect and induced earnings (2) are not calculated separately by Harbour Dues $340 the model. Marine Service Fees $220 (2)includes $240,000 for Sydney Total $560 and $100,000 for North Sydney

2 Data collected from the terminal operators was provided with the understanding the proprietary data will be kept confidential and not be provided to any other parties. 3 Economic impacts and cost estimates in this Plan are Canadian dollars.

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2.3.3.1 Job Impacts

It is estimated that 2,125 jobs are generated by maritime activities at the marine terminals within Sydney Harbour. Of the 2,125 jobs:

x 833 jobs are directly generated by activities at marine terminals and if such activities should cease, these jobs would be discontinued over the short term.

x 1,292 jobs are supported by the local purchases of the 833 individuals directly generated by maritime activity at the marine terminals (induced jobs) and by purchases in the local and regional economy by firms providing direct cargo handling and vessel services (indirect jobs). The majority of the induced jobs are with state and local government agencies providing school, health care, police and fire protection, other community and social services, as well as firms providing business and personal services. These purchases include expenditures for equipment and parts, maintenance and repair services, office supplies, raw materials, fuel, utilities, and insurance. Care is taken to avoid any double counting of jobs already included in direct jobs.

To underscore the geographic scope of the impacts generated by the marine terminals in Sydney Harbour, Table 2-3 presents the distribution of the 833 direct jobs by place of residence. The residence analysis is based on the results of the interviews with the dependent 24 firms. As this table indicates, 59% of the direct jobs are held by residents of the CBRM. Table 2-3 Distribution of Direct Jobs by Place of Residency Place of Residency Direct Jobs Sydney 193 North Sydney 137 Glace Bay 91 New Waterford 35 Dominion 8 Sydney Mines 4 Louisbourg 2 Richmond County 2 Other Cape Breton 20 Other Nova Scotia 80 Other Canada 262 Total 833

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2.3.3.2 Personal Earnings Impacts

The personal income received by those directly dependent upon maritime activity in Sydney Harbour is paid from the business revenue received by the firms supplying direct services at the marine terminals.

The earnings impact is estimated by multiplying the average annual earnings (excluding benefits) of each harbour participant, i.e., truckers, steamship agents, pilots, towing firm employees, longshoremen, warehousemen etc., by the corresponding number of direct jobs in each category. The individual annual earnings in each category multiplied by the corresponding job impact resulted in $31.8 million in personal wage and salary earnings.

The impact of the re-spending of this direct income for local purchases is estimated using a personal earnings multiplier. The personal earnings multiplier is based on data supplied by the Input-Output Division of Statistics Canada. The personal expenditure patterns provided by StatCan were used to distribute consumption expenditures for purchases of goods and services produced locally. Similarly, personal income and consumption impacts were generated by the wages and salaries of indirect employees. Therefore, in 2006, the maritime activity in Sydney Harbour created a total of $31.5 million of induced and indirect wages and salaries.

A total of $63.3 million in earnings were therefore estimated to have been generated by maritime activity in Sydney Harbour in 2006.

2.3.3.3 Business Revenue Impacts

The revenue impact is a measure of the total economic activity in the province that is generated by the cargo moving via the marine terminals in Sydney Harbour. In 2006, marine cargo activity at the terminals generated a total of $132 million of total economic activity in Nova Scotia. Of the $132 million, $79.4 million is the direct business revenue received by the firms directly dependent upon the Harbour and providing maritime services and inland transportation services to the cargo handled at the marine terminals. An additional $52.6 million was spent on local purchases by the firms directly dependent on the Harbour activity (which supported the indirect jobs).

2.3.3.4 Tax Impacts

Federal taxes are based on total federal income taxes nationwide (2006) divided by the national employment figure, which results in an average Federal tax burden of $16,400 per employee. Federal sales taxes are also part of the economic impact, but have not been included in this analysis. Provincial and local tax impacts are based on provincial and local per capita tax burdens developed from data obtained from Statistics Canada and the CBRM. The taxes include all provincial and local taxes collected or levied divided by Nova Scotia or CBRM population. Multiplying the tax burden by the total direct, induced and indirect job impact, it is estimated that activity at the Sydney Harbour marine

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terminals generated $34.9 million of Federal taxes, $20.7 million of provincial taxes and $1.4 million of local taxes.

2.4 Economic Impacts of Cruise Operations

The cruise service impact model provides a tool to evaluate changes in the types of cruises being offered, the size of vessels deployed, the number of passengers per cruise, the share of passengers staying overnight in area hotels prior to or after the cruise, and the share of cruises homeporting in port versus in-transit calls. The cruise model can also be used to quantify the potential impact of new services, by size of vessel and type of cruise. Finally, the cruise impact model along with the marine cargo model can be used to evaluate the economic impact of a marine terminal for use as a cruise terminal versus a cargo terminal.

In 2006, 36 cruise vessel calls were recorded in Sydney Harbour, carrying about 46,600 passengers and 21,700 crew members. It is important to note that these are all in-transit cruise calls in contrast to homeported vessels. The key difference between an in-transit call and a homeport call is the fact that a vessel home porting will take on passengers and supplies at a homeport, while a vessel making an intermediate in-transit call typically does not take on or discharge passengers and neither does the vessel take on supplies from local chandlers and caterers, as well as use local services such as advertising, maintenance and repair, linen services, etc. Hence, a call by a homeported vessel will generate a greater economic impact than an in-transit call. The Sydney Ports Corporation and other ship supply vendors stated the cruise vessels calling Sydney Harbour are not taking on provisions and vessel expenditures while in port are minimal.

A cruise impact model was developed to measure the economic impact of the current in- transit cruise operations in Sydney Harbour. The model can be used to test the sensitivity of the impacts to changes in the percent of passengers coming ashore in Sydney for local touring and excursions. The impact of changes in the mix of the size of vessels and the number of cruises by size of vessel can also be evaluated using the model.

2.4.1 Cruise Impact Model Structure

Cruise service related to the in-transit call of a vessel contributes to the local and regional economies by providing employment and income to individuals, tax revenues to local and state governments, and revenue to the local visitor industry engaged in providing touring/excursions, retail purchases and food and beverage services to passengers and crewmembers (greater impacts would be generated by homeported cruise vessels through the purchase of goods and services to support vessel operations and the impacts of visitors flying to/from the ship for the cruise and potential impacts on hotels and restaurants generated by overnighting passengers) . The flow of cruise industry-generated economic impacts throughout an economy creates four separate and non-additive types of impacts. These four types of impacts are:

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x Employment Impact - the number of full-time equivalent jobs generated by cruise activity in Sydney Harbour. This consists of jobs directly generated in the visitor industry by the in-transit cruise vessels as well as induced jobs, or jobs created in the Sydney Harbour area due to the purchase of goods and services by those individuals directly dependent upon cruise activity.

x Income Impact - the level of earnings associated with the jobs created by cruise activity, and adjusted to reflect re-spending throughout the economy.

x Revenue Impact - the sales generated by firms engaged in the visitor industry supplying services and materials to the cruise passengers while in port. The value of the cruise tickets is not included as a revenue impact for purposes of this analysis. x Tax Impacts – includes the Federal income tax, provincial and local tax revenues generated by cruise activity. Federal income taxes are paid by individuals and were estimated based on Canadian Federal income tax rates for 2006 obtained from the Canada Revenue Agency. Provincial and local taxes are paid by individuals and firms directly dependent upon the cruise activity.

2.4.2 Impact Categories

The impacts are generated in firms throughout many sectors of the local and regional economy. Separate impacts are estimated for each of the various economic categories supplying goods and services to the in-transit cruise passengers. The impact categories are identified below.

The typical expenditure profile of an in-transit cruise passenger while in port provides an understanding of the types of firms involved in providing goods and services to the passengers. Typically in-transit passenger coming ashore impact the local economy through the purchases of tour packages, souvenir and other retail purchases, food and beverage purchases, as well as the hire of ground transportation such as taxis or rental cars.

Passenger expenditure profiles and per capita expenditures used in this analysis were taken from the Economic Impact of the Cruise Ship Industry in Atlantic Canada (2002), the most current information available. The report identifies several categories of expenditures by passengers. These expenditures are: x Tours x Retail x Souvenirs x Arts/Crafts x Pharmacy x Food and Beverage x Groceries x Taxis x Other

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Holland America, Princess Cruises and Saga were contacted to update passenger and crew expenditure data and the shares of passengers and crew coming ashore identified in the 2002 report. The lines did not provide updated information and so, the earlier data was used in lieu of current data.

2.3.3 Estimated Economic Impacts of Cruise Operations

Sydney Harbour passenger and crew data for 2006 were used with the expenditure profiles identified in the 2002 report to estimate the economic impacts of cruise activity in Sydney Harbour. The estimated economic impact of the 2006 cruise vessel calls in Sydney Harbour is presented in Table 2-4.

Table 2-4 Economic Impact of Cruise Operations at the Port of Sydney Categories Total Jobs Total Income Total Revenue Total Taxes ($1,000) ($1,000) ($1,000)

Tours 37 $851 $1,978 $511 Retail 38 1,857 4,319 716

Souvenirs 32 1,534 3,568 591 Arts/Crafts 25 1,208 2,809 465 Pharmacy 11 537 1,250 207

Food/Beverage 38 897 2,242 548 Groceries 7 273 881 122 Taxis 78 633 1,977 908

Other 4 215 499 82 Total 271 $8,004 $19,522 $4,150

The exhibit shows the following impacts: x Job Impact - The cruise activity in Sydney Harbour created 271 total jobs for CBRM area residents. This includes direct, indirect and induced jobs. x Personal Income Impact - The 271 jobholders received $8 million in wages and salaries, for an annual salary of $29,500. x Business Revenue - Local businesses supplying food, beverages, and services to the cruise line passengers received $9.5 million of business revenue. x Tax Revenue - Finally, as the result of cruise activity in Sydney Harbour during the 2006 cruise season, $4.2 million of Federal income, provincial and local tax revenues were collected, of which $1.4 million were Federal income tax and $2.8 million were provincial and local tax revenues.

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3.0 Inventory Analysis of Existing Marine Facilities, Properties, and Transportation Networks in Sydney Harbour

An inventory assessment of the existing marine landside facilities located in the harbour was completed. The overall goal of the harbour inventory was to collect information and characterize each landside facility so opportunities and constraints could be identified.

The facilities captured in the assessment included all major harbour assets including passenger and cargo facilities. The assessment also identified other assets in close proximity to the harbour that complement the landside facilities and potentially could be used to expand or make the landside facilities more efficient.

Generally, the harbour inventory assessment gathered the following information on each of the following landside facilities:

x past studies x current and historical uses of the marine properties x cargo throughput data x current and past terminal operator x shippers that are, or have used, the facility x base mapping, including bathymetric, land uses and transportation links x site plans and information showing the size of the facilities and location 3.1 Inventory of Existing Marine Terminals and Facilities

A number of marine terminals currently operate from Sydney Harbour including facilities for bulk cargo, breakbulk cargo, fish processing, a ferries (passengers and freight), cruise passenger and a manufacturing/fabrication related activities. The landside facilities reviewed in detail are identified on Figures 3-1 through 3-3 and included the following:

x Sydney Marine Terminal x Sydport Industrial Park x International Coal Pier x Atlantic Canada Bulk Terminal x M.V. Osprey x Marine Atlantic Ferry Terminal

In addition to these facilities there are a number of other landside assets in relative close proximity to the Ports that are also identified. These other facilities are also identified on Figures 3-1 through 3-5. These secondary facilities include:

x Imperial Oil Bulk Storage Facility x Petro-Canada Petroleum Bulk Storage Facility

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Figure 3-1 Overview of Sydney Harbour and Facilities

TEC Inc. 22 (This page intentionally left blank) Figure 3-2 Marine Terminals and Facilities – Sydney Harbour South Arm

Figure 3 4 Marine Terminals and Facilities Sydney River Figure 3 5 Marine Terminals and Facilities Inland Ports of Sydney Master Plan November 2007

x Ultramar Petroleum Bulk Storage Tanks at Sydport Industrial Park (not shown) x Former Irving Petroleum Bulk Storage Facility x Former Sydney Engineering and Drydock x Harbourside Commercial Park (SYSCO), and x Victoria Junction Site.

Although, not subject to the detailed inventory assessment, it was deemed prudent to identify these secondary facilities given the current arrangements some of these facilities have with primary harbour facilities, the influence these other assets could have on potential expansion, or efficiency improvements that could occur at the primary facilities and the past prominence these facility have or had in usage of port usage.

3.1.1 Sydney Marine Terminal Facility

The Sydney Marine Terminal is located on the eastern shore of the South Arm of Sydney Harbour and is situated on the edge of downtown Sydney. The location of the facility is presented on Figures 3-1 and 3-2 and is pictured in Figure 3-6. The Sydney Marine Terminal was formally the government wharf, owned and operated by Transport Canada. In early 2000, Transport Canada divested the facility to CBRM, who turned the facility into the Sydney Marine Terminal. The original facility was a marginal wharf with a transit shed, mainly operating as a break Figure 3-6 Sydney Marine Terminal bulk terminal. With the worldwide transition from break bulk to container shipping, the marine cargo business at the terminal declined. Prior to CBRM assuming ownership of the facility, it underwent a $13 million upgrade/reconstruction. Upgrades included reconstruction of the wharf, installation of lighting and parking areas. Generally the facility can be considered to be in very good condition. Upon taking ownership of the facility, CBRM leased it to the Sydney Ports Corporation who now operates the facility. Currently, the facility is used to berth cruise ships, unload petroleum and other miscellaneous products. The facility is also using a berth for a number of miscellaneous commercial and government sector vessels. The property is approximately 4.4 hectares (ha) with almost half of this area paved. The current wharf structure is 275 m long with a 12 m water depth. On the south side there is a crib wharf structure 65 m long with an 8.5 m depth. The wharf has a concrete deck with

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a portion reinforced as a heavy lift pad. A rail spur exists on the property; however, it is connected to a non-active line.

Annually, the facility typically receives in the range 50,000 passengers and 40 to 50 cruise vessels beginning in May and ending in October. On average, three tankers berth at the facility per month, unloading 315 million litres of petroleum annually.

The most significant building on the facility is the Cruise Pavilion, which is a marshalling and entertainment facility for cruise passengers. The Pavilion houses a visitor centre, art gallery, shops, boutiques, exhibition centre and a licensed bar. Other buildings on the property include an office administration building and an entertainment stage.

Future long range plans for the facility could include acquiring the properties to the north and south of the terminal and the installation of a new dolphin. The property located to the north is the former Sydney Engineering and Drydock. This property and the property to the south could be used to expand tourist attractions for cruise ship passengers. The new dolphin installation would be located to the south of the existing wharf and provide an additional capacity of 120 to 150 m, allowing enough room for two ships to berth at the same time.

Further details about the facility are contained on datasheets included in Appendix A with an aerial photo view of the facility property boundary.

3.1.2 Atlantic Canada Bulk Terminal

The Atlantic Canada Bulk Terminal is located on the eastern shore of the South Arm of Sydney Harbour, directly adjacent to the Harbourside Commercial Park and in proximity to the International Coal Pier. The location of the facility is presented on Figures 3-1 and 3-2, and is pictured in Figure 3-7.

The Atlantic Canada Bulk Terminal site is currently leased by Provincial Energy Ventures (PEV) from the Harbourside Commercial Park. The Harbourside Commercial Park was formerly the lands occupied by the Sydney Steel Mill (SYSCO), which closed in 2000. The Nova Scotia Government was the owner and operator of steel mill. The Steel Mill has since been demolished and the lands are currently being converted to an industrial park by the Provincial Government. The park officially opened in summer of 2007 as the Harbourside Commercial Park.

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The Atlantic Canada Bulk Terminal consists of two adjacent wharves; both originally part of the SYSCO Pier that serviced the steel mill. The easterly section, formerly known as the One Receiving Dock, was constructed in 1963 to receive iron used in the steel making process. The newer section known as the Finished Product Wharf No. 4 was constructed in 1976 to load rails. Finished Product Wharf No. 4 has a load rating of 4,882 kg/m2 (1,000 lbs/ft2), which is, in general Figure 3-7 Atlantic Canada Bulk Terminal terms, an extremely high rating and possibly the highest loading rating in Atlantic Canada. The current wharf structure is 275 meters (m) long with a 12.7 m water depth.

The property is approximately 44 ha in size with about 2/3 of this area set aside for future expansion. Currently, the facility is used for the shipment of various types of bulk cargo. The facility also has imported and exported other specialized cargo including the importation wind turbine and the export of components of the dismantled steel mill.

In 2006, the following commodities were shipped from the facility:

x Coal 200,000 tonnes x Scrap Steel 80,000 tonnes x Aggregate 42,000 tonnes

Further details about the facility are contained on datasheets included in Appendix A with an aerial photo view of the facility property boundary.

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3.1.3 Sydport Industrial Park

The Sydport Industrial Park is located on the western shore of the South Arm of Sydney Harbour in the community of Edwardsville. The location of the facility is within the Harbour is presented on Figures 3-1 and 3-2, and is pictured in Figure 3-8.

The facility was originally constructed during World War II as a naval base. During WWII it was one of the prime naval bases supporting the allied forces in the European Figure 3-8 Sydport Industrial Park campaign. In 1969, after the Naval Base ceased operation, the facility was transformed to an industrial Park by the Federal Government under the Cape Breton Development Corporation (Devco). In 2000 the Laurentian Energy Corporation purchased the property and continues to own the property.

The wharf structures, which were upgraded in the early 1950s, consisted of a pier parallel to the shore with berthing on both faces and marginal wharves along the shoreline. The wharves are dated and as such have load restrictions and generally in a state of disrepair.

The facility has a total size of 263 ha (650 acres), of which only 38% is developed. The primary features of the facility are the developed industrial park, wharf structures and 450 acres of relative flat (2 to 6 % grade) undeveloped land (Greenfield) that borders the Harbour. The industrial park and wharf facilities are fully serviced with municipal sewer, water and electricity. There are approximately two dozen buildings in the industrial park ranging in size from 1,100 m2 to 4,000 m2. The primary uses of the buildings include warehousing, general commercial, metal fabrication, painting and sandblasting, and equipment repair. The facility has excellent road and rail connections to the national highway and rail systems.

The facility has three main wharf structures that have a combined length of 1370 m and water depths ranging between 5 to 9.5 m. The wharf structures are used to support the industrial park activities. The wharf is also used to service some foreign fishing, survey, cable laying, and bulk cargo vessels, as well as, tugs and barges.

There are a number of upgrades and improvements being contemplated for the wharf structures including: x general wharf structure repairs x installation of a heavy lift pad TEC Inc. 30 Ports of Sydney Master Plan November 2007

x improvements to lay down areas x increasing berth depths x security improvements

Further details about the facility are contained on datasheets included in Appendix A with an aerial photo view of the facility property boundary.

3.1.4 International Coal Pier

The International Coal Pier is located on the eastern shore of the South Arm of Sydney Harbour, directly adjacent to the Harbourside Commercial Park and the community of Whitney Pier. The location of the facility is presented on Figures 3- 1and 3-2 and is pictured in Figure 3-9. Emera Utility Services Inc. and Logistec Stevedoring (Atlantic) Inc. own and operate the site’s coal handling equipment.

Originally operated by the Dominion Coal Company, the International Coal Pier has been loading and receiving coal for over 100 years. In the 1940s and 1950s, it consisted of several wooden trestle finger piers that extended out into the Harbour and loaded mainly small vessels. Figure 3-9 International Coal Pier In the 1960s, the coal company secured a 10 year contract to ship coal to Ontario Hydro. Two dedicated ships were built, the Ontario Power and the Cape Breton Miner (30,000 dead weight tonne(DWT) vessels) to shuttle coal up the St. Lawrence to power plants along the Great Lakes. To accommodate this, in 1964 a new marginal wharf coal conveyance system and a new ship loader was constructed, as well as, a new storage shed capable of storing 15,000 tonnes.

After the energy crisis of 1976, there was resurgence in world demand for coal and the rail loop and trestle system was constructed at the pier. In 1993, the existing dock was modified to accommodate larger ocean going vessels (Panamax size 80,000 DWT) along with a 3,000 ton per hour traveling ship loader.

In the fall of 1998, Devco converted the pier to a coal receiving operation. This shift from exporting to importing of coal was a result of production problems at one of its two operating mines combined with an increase in demand by Nova Scotia Power, Devco’s most significant customer. With the closure of the Devco mines in the fall of 2000, the

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coal handling operations were sold to EMERA who subsequently sold the coal handling equipment to Logistec in 2001.

Currently, the facility is used to unload coal, which is supplied to the local power generation stations. Annually, approximately 2,300,000 tonnes of coal are offloaded from a combination of Lakers and Panamax size vessels. The berth has a length of 180 m and 15 m in depth. Coal is unloaded from the ship via a self unloader to a receiving hopper.

The ship loader has a capacity of 3,000 metric tonnes per hour. Coal is then transported by a system of conveyors to one of four stockpiles with a combined capacity of 200,000 tonnes. The facility also has another designated area for temporary stock piling, which has an additional capacity of 40,000 tonnes.

Coal is shipped from the facility either by truck or by rail. Coal shipped out by rail is loaded for shipment via front end loaders that retrieve coal from stock pile and place the material into stacker conveyors which in turn load train cars located on the facilities train loop. Trains then transport coal to the Lingan Generating Facility operated by Nova Scotia Power. Coal is also transported from the site by truck to the Point Aconi Generating Facility, also owned by Nova Scotia Power. Trucks are loaded using front end loaders.

Further details about the facility are contained on datasheets included in Appendix A with an aerial photo view of the facility property boundary.

3.1.5 Marine Atlantic Ferry Terminal

Marine Atlantic Inc. (MAI) is mandated to provide ferry service to the Province of Newfoundland and Labrador (NL&L). The MAI ferry is the main transportation link to the Province of NL&L, with the continental ferry terminal located in North Sydney. The facility is presented on Figures 3-1 and 3-3 and is pictured in Figure 3-10. The ferry service from North Sydney Figure 3-10 Marine Atlantic Ferry Terminal runs year round to Port- aux-Basques, with an additional ferry service provided to Argentina during the summer period. The NL&L ferry is the only constitutional ferry service in Canada as provided under Term 32(1) of the Terms of Union (The Newfoundland Act, 1949). MAI is a

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Federal Crown Corporation that began operating the service in 1986. Prior to 1986 the service was operated by Canadian National Marine.

The Marine Atlantic Ferry service is the main transportation link to the Island of Newfoundland and annually transports between 420,000 and 520,000 passengers and 79,000 to 87,000 commercial vehicles. It carries approximately 27% of all passengers, approximately 50% of all freight to the Province and employs approximately 900 people.

The number of crossings varies depending on the time of year and day of the week, but in general there are two crossings per day during the months of October through to May. During the peak tourism months the crossings range from two to four crossings per day.

The property has a total area of approximately 12 ha with queuing area of 4.7 ha. The facility has three wharf structures. The first structure is 212 m in length and services the passenger ferry service. The second wharf structure is 240 m in length and services the cargo freighter. The wharf is 150 m in length is used as a training area.

Currently, the ferry fleet is composed of four vessels: x MV Atlantic Freighter, 154 m, 75 drop trailers x Leif Ericson, 157 m, 500 passengers, 250 auto x MV Joseph and Clara Smallwood, 179 m, 1,200 passengers, 370 auto or 77 trailers x MV Caribou, 179 m, 1,200 passengers, 370 auto or 77 trailers

Currently, MAI is planning upgrades to both the landside facilities and the fleet. Fleet upgrade plans include a mid life refit for both the MV Joseph and Clara Smallwood and the MV Caribou and replacement of the MV Atlantic Freighter with two new ships. Landside upgrades include modification of the alternate dock in North Sydney to make ramp bi-level and an additional bi-level ramp in Port aux Basques, as well as, upgrades to the wharf facilities. The facility is in a very good state of repair.

Further details about the facility are contained on datasheets included in Appendix A with an aerial photo view of the facility property boundary.

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3.1.6 MV Osprey Limited

Located in North Sydney, M.V. Osprey Limited is a privately owned fish processing facility. The facility is serviced by its own fishing fleet which operates in the North Atlantic off the east coast of Canada. The fishing fleet berths at the facilities wharf, which are 130 m in length and 30 m wide with a depth of 8 m. Annually, the facility receives and processes 13,000 tonnes of shrimp and ground fish.

The main features of the facility include the wharf and a 700-m2 cold storage (-25C) transit shed. In addition to providing a berth for its own fishing fleet, the facility at this time provides berth for Canadian Coast Guard Vessels. Figure 3-11 MV Osprey Limited Generally the facility has good road access and is within 500 m of the national highway system. In general the facility is considered to be in a very good state of repair. Currently, there are no upgrade or expansion plans for the facility.

The facility is presented on Figures 3-1and 3-3 and is pictured in Figure 3-11. Further details about the facility are contained on datasheets including in Appendix A with an aerial photo view of the facility property boundary.

3.1.7 Harbourside Commercial Park

The Harbourside Commercial Park is located on the westerly side of Sydney Harbour on property owned by Nova Scotia Lands Inc. This property was formerly the lands occupied by the Sydney Steel Mill (SYSCO). The site is approximately 121 ha in size, with the majority being level in-filled Harbour lands. The site is presented on Figures 3-1 and 3-2 and is pictured in Figure 3-12.

Construction on site began in 1899, and by 1901, steel was made on the property. The mill produced everything from pig iron and crude steel to rails, bars, rods, tie plates, wire and nails. By 1912, the plant produced over half off all the steel produced in Canada. In 1930, Dominion Steel and Coal Corporation (DOSCO) bought the plant. The Hawker- Siddley Group bought it in 1957 and in 1967 the plant was taken over by the Nova Scotia government and named SYSCO.

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Despite significant efforts to keep the plant open including a major upgrade in 1989 and several attempts to sell it, the plant was closed in 2001. The park officially opened in summer of 2007 as the Harbourside Commercial Park.

Figure 3-12 Harbourside Commercial Park

The SYSCO site was contaminated and plans for remediation began in 2001. Approximately, 26 ha of the site have already been decommissioned and remediated. Demolition of the infrastructure has been completed and the majority of the steel plant assets have been sold or disposed. The cleanup and monitoring is still ongoing. The site will be fully remediated by 2009.

There are up to 4 million tonnes of inert waste product (slag) that was produced during the production of steel on site. Slag can be used for various construction projects. Examples of such projects include, road base, fill for demolished building foundations, overpass embankments and light weight cement. Nova Scotia Lands Inc. (NSLI) will market these and other assets of SYSCO. NSLI hopes to sell at least 250,000 tonnes of this material over the next two years.

The site is strategically located and a prime location for industrial growth within the CBRM. The site is fully serviced with water, electricity and sewer and has excellent road and rail connections. Being directly adjacent to both the Atlantic Canada Bulk Terminal and the International Coal Pier, the site is likely to be integral to expansion plans of these two facilities.

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3.1.8 Victoria Junction Site

Since the 1970’s, the 750 acre Victoria Junction (or VJ) site was home to a large coal preparation area and wash plant. Locomotive maintenance shops were built in the 1980’s. During the 70’s, 80’s, and 90’s, the Lingan and Phalen mines both hauled coal to the Victoria Junction preparation plant and then onto to the Lingan Generating Station. After

Figure 3-13 Victoria Junction Site

these mines closed, coal was trucked from the Prince mine to the site and then railed onto the Lingan Generating Station. Some coal was also shipped to the site from the piers and then railed onto the Lingan Generating Station. These operations ended in 2001. Today only the rail shops which are considered state of the art and have room for expanded operations are used by Sydney Coal Railway Inc. (SCRI) for maintenance. The site is presented on Figures 3-1and 3-4 and is pictured in Figure 3-13. An aerial photo view of the property boundary is included in Appendix A.

Remediation of the site began in 2001 after DEVCO decommissioned the coal wash plant. A coarse waste pile of refuse (mostly stone and sulphur), created when the wash plant was in operation, is still on site. These two piles have been capped with liners. There is also a pad for LBC (Lifting and Banking Centre) which has capacity for 1 million tons of coal. It is currently being used to store remediation activities. Building foundations also exist onsite and will not be removed as part of the remediation program. There is a 1200 to 1600 gallons per minute treatment system on site but the current flow rate is roughly 100 gallons per minute. Most of the remediation work should be done by end of 2007.

According to the CBRM Municipal Planning Strategy, the site is well positioned to accept industrial businesses, regional utilities and regional tertiary service industries. The site has frontage on, and access to, primary regional arterial (Grand Lake Road) and rural

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road (Lingan Road). It also has excellent rail access and is close to the airport. Since it is removed from existing development, the site has low potential for land use conflict.

3.1.9 Sydney Engineering and Drydock

The former Sydney Engineering and Drydock is located on Sydney Harbour. This privately owned property is a prime waterfront location immediately north of the Sydney Marine Terminal (Figure 3-2). The site was formerly utilized as a shipbuilding and repair facility. The site has not been in operation for a number of years and has fallen into a state of significant disrepair. In the past, the property was serviced by rail; however, this line has not been maintained and would require upgrading to become operational.

Given the strategic location and proximity to both the harbour and the Sydney Marine Terminal, the property is a prime location for redevelopment.

3.1.10 Petroleum Bulk Storage Facility

Sydney Harbour was once home to three different bulk petroleum storage facilities. These facilities included the Irving Petroleum facility, the Petro- Canada Facility and the Imperial Oil Facility. Currently only one of these facilities is in operation, the Imperial Oil Facility. The location of all of these facilities is presented on Figures 3-1, 3-2 and 3-4. The Imperial Oil Facility Figure 3-14 Imperial Oil Bulk Storage Facility is pictured in Figure 3- 14. Currently, Imperial Oil provides all of the local supply of petroleum to the region including supplying petroleum to Irving Oil and Petro-Canada.

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3.2 Inventory of Transportation Networks: Rail, Road and Navigation Channel

Sydney Harbour has excellent navigation capabilities with landside facilities that have access to major regional and national road and rail transportation systems.

Highways

The national 100 series highway system, known as the Trans Canada Highway, connects all Provinces in Canada and provides numerous links to the U.S. border. A schematic of the National Trans Canada Highway System is presented in Figure 3-15, with more detail on roadway transportation links within the region of Cape Breton Island presented in Figure 3-16 and Figure 3-17.

Figure 3-15 National Trans Canada Highway System

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Figure 3-16 Nova Scotia Roadway Transportation Links

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Figure 3-17 Rail Lines and Roads of the Sydney Area TEC Inc. 40 Ports of Sydney Master Plan November 2007

Highway 125 is a controlled-access, 100 series highway which encircles the western side of Sydney Harbour and connects to Highway 105. Approximately 60% of Highway 105 is undivided and classed as two-lane freeway. Long range planning calls for Highway 105 is to be upgraded to a four-lane twinned freeway. Highway 105 is a 142 km segment that travels from Marine Atlantics Facility to the Canso Causeway. With some minor exceptions, Highway 105 is uncontrolled access and two lanes.

Regional Arterial Collectors

The Atlantic Bulk Canada Bulk Terminal, International Coal Pier and Harbourside Commercial Park are serviced by an arterial collector known as the Sydney Ports Access Road (SPAR). The SPAR was constructed between 2001 and 2003 specifically to provide direct access between these harbour facilities and highway 125. Although not directly connected to the Sydney Marine Terminal, the SPAR also improves the access to the facility by providing a relatively close (~500 m) alternative access to Highway 125. Prior to construction of the SPAR, the access to the Sydney Marine Terminal was via Route 104 (Kings Road) or Route 4 (Grand Lake Road) which are the two most heavily traveled regional collector roads within the Municipality.

The Sydport Industrial Park has excellent access to the national highway system via the Sydport Access Road that was specifically constructed for the purpose of providing high quality road access to the facility.

Rail Transportation

The main rail link to the area is owned and operated by the Cape Breton and Central Nova Scotia Railway (CBCNSR). Currently, CBCNSR operates a freight line from Sydney to Truro where it connects to the mainline Canadian National Railway network and on to all other North American rail transportation networks (Figure 3-18). CBCNSR also operates a rail shunting yard in Sydney (Figure 3-19). The total size of this yard is 14.9 ha, and it is strategically located in proximity to the Imperial Petroleum Bulk Storage Facility, Atlantic Canada Bulk Terminal and the Harbourside Commercial Park.

CBCNSR provides active service to all of the port facilities except the Sydney Marine Terminal, M.V. Osprey and Marine Atlantic. The Sydney Marine Terminal had rail service in the past, however some portions of the rail have fallen into a state of disrepair and would require upgrading to again become operational.

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Figure 3-18 Rail Lines

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CBCNSR Rail Yard

Figure 3-19 CBCNSR Rail Yard

In addition to the CBCNSR operation, Sydney Coal Railway Inc. (SCRI) operated a short line, single use rail service in the area between the International Coal Pier and the Lingan Power Generating Station. SCRI also operated a large, modern maintenance facility in Victoria Junction. The rail right of way to the International Coal Pier is owned by EMERA but leased to SCRI. The spur line to SCRI's maintenance facility in Victoria Junction is owned by DEVCO and leased by SCRI. Annually, approximately 2.0 million tonnes of coal are shipped over the rail line.

Navigation Channel

Sydney Harbour has excellent deep water access through its navigation channel that connects port facilities to the Atlantic Ocean and global commerce. The Sydney Harbour navigation channel extends approximately 10 km from Spanish Bay to the North Sydney Waterfront where the outer harbour divides into the Northwest and South Arms forming a Y-shaped inner harbour. The navigation channel extends into the South Arm approximately 9 km to downtown Sydney. The navigation channel is depicted in Figure 3-20. Water depths in the channel generally range from 12 to 18 m. Channel depths in the outer harbour are 15 m at the entrance to Sydney Harbour from Spanish Bay, become shallower off Sydney Mines where depths range between 11 m and 13 m before

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deepening again to between 14 m and 15 m near the Southeast Bar (refer to Figure 3-1). The channel in the South Arm is actually deeper than in the outer harbour with depths ranging from 16 m to 18 m in the vicinity of Sydport and the International Coal Pier. Each marine terminal has different water depths alongside.

An interesting characteristic of the navigation channel in Sydney Harbour is that siltation rates are low enough that maintenance dredging of the Harbour has not been needed. This lack of the need for periodic maintenance dredging contrasts with many other seaports throughout the world where frequent maintenance is required to ensure adequate water depths.

Figure 3-20 Approximate Navigation Channel in Sydney Harbour

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4.0 Potential Cargo Market Opportunities This chapter assesses the cargo markets in Atlantic Canada and the U.S. North Atlantic port range, and identifies potential cargo market opportunities for Sydney Harbour. Section 4.1 addresses the Sydney Harbour cargo market, and Section 4.2 provides an assessment of port facilities at competing ports. An assessment of cargo markets through competing ports is presented is Section 4.3, followed by an assessment market trends within the Canadian/U.S. North Atlantic port range in Section 4.4. Cargo market opportunities for Sydney Harbour are presented in the final section of this chapter.

4.1 Sydney Harbour Cargo Market In Chapter 2, an historic perspective of marine cargo activity in Sydney Harbour was presented. Bulk cargoes were identified as the principal cargo markets of the Harbour. The coal and coke market and other Sydney Harbour markets are addressed below.

4.1.1 Coal and Coke Market Imports of coal and coke are the primary commodities handled in the Harbour. Approximately 2.4 million tons of coal and coke were discharged in Sydney Harbour in 2006. Once discharged from vessels, the coal and coke are railed and trucked to power generation plants in the province. Three-quarters of the coal and coke is railed in 21 car trains to Nova Scotia Power’s Lingan power plant. About 22% is trucked to a power plant in Sydney. The balance is railed to Truro. The Truro bound rail cars are moved as part of a general freight train unlike the dedicated train to Lingan. The power generating plants will continue to burn coal and coke into the future. The potential for change in the Sydney Harbour coal market is addressed in the final section of this chapter.

4.1.2 Other Cargo Markets As was shown earlier in Figure 2-3, the export market is sporadic with specific commodity shipments occurring infrequently. In 2006, about 200,000 tons of dry bulk products were loaded onto vessels at Sydney Harbour terminals. The bulk terminals include the Atlantic Canada Bulk Terminal. The bulk commodities handled included stone, gravel, sand and scrap steel. These products are sourced locally and are delivered to the docks by truck. Slag has been exported from Sydney Harbour in the past, albeit not regularly. The slag is sourced from the SYSCO site adjacent to Sydney’s bulk terminals. Future opportunities for the slag are addressed in the final section of this chapter. Petroleum products are also discharged from tankers at the Sydney Ports Corporation operation. The petroleum is piped to a nearby tank farm for distribution by truck to the local area. In 2006, 316 million liters was discharged at the dock. Marine Atlantic operates a passenger and cargo ferry service between North Sydney and Newfoundland and Labrador. In 2006, the service carried 85,000 commercial trucks between North Sydney and Newfoundland. MV Osprey operates two factory ships in the North Atlantic fishing market out of Sydney Harbour. A dismantled steel mill (example of project cargo) was also loaded onto ships at the Atlantic Canada Bulk Terminal in 2006. The mill was delivered to the dock from the adjacent SYSCO terminal.

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Future market opportunities for Sydney Harbour’s other cargo markets are addressed at the end of this chapter.

4.2 Assets of Competitive Port Cargo Facilities This section provides a brief overview of breakbulk and container terminal capacities at major public ports in Atlantic Canada and the U.S. North Atlantic port range. The following tables provide information on competing ports that allows a comparison with which the Ports of Sydney may gauge their competitive position. Table 4-1 presents an overview of container facilities. The table shows there is a minimum of 2,718 acres of container terminal acreage in the Atlantic Canada and U.S. North Atlantic ranges. Other ports with mixed use operations have not listed or have not separated container operation data.

Table 4-1 Container Terminal Facilities in Atlantic Canada and U.S. North Atlantic Port Terminal AcreageBerths Depth (ft)Cranes Rail

Halifax CN Terminal 20 2 2 CN Fairview Cove 70 2 55 4 On-dock South End 72 5 37-55 6 On-dock 162 9 12

Saint John Rodney 45 2 2 NB Southern

Boston Conley 101 2 40-45 4 Off-dock

New York Howland Hook 195 3 42 9 Express Rail Red Hook 80 3 6 NY Cross Hbr PNCT 175 3 40-50 7 Near-dock Maher 445 16 45-50 13 Express Rail APM 266 4 45 11 Express Rail Global Marine 100 2 40 6 1,261 31 52

Philadelphia Packer Avenue 112 6 40 6 CP, CSX, NS

Baltimore Seagirt 284 4 42 7 CSX Dundalk 131 8 42 8 NS 415 8 15

Virginia Norfolk Intl 400 5 44-50 11 CSX Portsmouth 219 3 40 9 CSX 619 8 20

TOTAL 2,718 66 112

Table 4-2 presents an overview of competing breakbulk facilities. The table shows there over 14 million square feet (ft) of covered storage and over 16 million square ft of open storage at the ports.

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Table 4-2 Breakbulk Terminal Facilities in Atlantic Canada and U.S. North Atlantic Port Berths Depth (ft) Covered Open Storage (ft2) Storage (ft2) Halifax Ocean Terminals 4 37-40 91,698 195,949 3 27-43 100,787 201,242 Richmond Terminals 1 30 88,103 48,760 1 29 148,413 63,760 Halifax Seaport 3 40 165,296 Piers 23-24 2 29-32 50,655 47,996 Woodside Atlantic 1 29 239,580 Autoport 1 45 4,356,000 16 644,952 5,153,287

Saint John Pugsley – Term C 1 34 65,658 No 10/11/12 2 30-32 74,269 430,556 Navy Island 3 34 519,884 699,652 Long Wharf 2 30-35 59,415 656,597 8 719,226 1,786,805

Boston Autoport

New York Brooklyn Piers 12 30-40 1,742,400 Auto MarineTerm 2 32 5,662,800 14 7,405,200

Philadelphia Packer Avenue 6 40 2,490,000 Piers 38 & 40 3 32 360,000 Pier 82 2 32 130,000 Piers 78 & 80 2 35 1,268,000 Pier 84 1 32 540,000 Tioga Marine Term 6 36 634,500 Camden Beckett Street 4 30-40 900,000 Broadway Term 2 35 1,241,053 Port of Salem 1 80,000 27 7,643,553

Baltimore Dundalk 9 34-35 932,320 North Locust Point 6 33-34 365,206 South Locust Point 3 36 620,000 Fairfield/Masonville 2 23-49 1,916,640 20 1,917,526 1,916,640

Virginia Norfolk Intl Term 4 30-35 2,540,000 Newport News 4 37-41 650,000 8 3,190,000

TOTAL 93 14,115,257

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4.3 Cargo Markets at Competing Ports

The cargo markets at competing Atlantic Canada and U.S. North Atlantic are identified in this section. The purpose of this market assessment is to identify principal commodities handled through other competing ports that may present potential market opportunities for Sydney Harbour. The markets assessed include import and export bulk, breakbulk and containerized cargo. The commodity/commodity group and port tonnage data presented represent the principal import and export commodities and ports within the designated North Atlantic port range. The Canadian trade data presented below is based on 2004 data, the most recent international trade available through Statistics Canada at this level of detail. The U.S. trade data presented is based on 2006 data, the most recent full year data available from the U.S. Bureau of the Census. The competing market assessment presents the bulk market first, followed by the breakbulk and container markets.

4.3.1 Bulk Market The bulk market assessment is presented in two sections. The first section below presents the bulk import market. This is followed by the bulk export market. Each section describes the Atlantic Canada and U.S. North Atlantic markets. Bulk markets on the Great Lakes are not assessed. Fully loaded bulk vessels do not enter the Great Lakes due to the vessel size limitations imposed by the St. Lawrence Seaway lock limitations. Several transshipping operations are located on the St. Lawrence River east of the Seaway locks to accommodate these bulk movements.

4.3.1.1 Bulk Import Market The Canadian bulk import market is presented first followed by the U.S. bulk import market. Canada Table 4-3 shows the historical import tonnage into Atlantic Canada ports by commodity. Total import tonnage has varied but has averaged around 6 million tons since 2001. Between 2000 and 2004, coal tonnage represents 52% of the bulk import tonnage. Tonnage peaked in 2001 and declined in 2002. Since then coal tonnage has increased but has not reached the 2001 level. Market share declined from 2000 to 2003. Share increased to 51% in 2004. Petroleum products4 (including coke) represent 28% of the total 5-year market. Tonnage increased 57% between 2000 and 2003. There was a small decline in 2004. Market share has remained stable at about 30% since 2002. Chemicals represent 14% of the market during the period. Chemical tonnage has grown 21% on average per year from 2000 to 2004.

4 Petroleum products include lubes, oils, LNG, coke and other petroleum products. Crude oil, gasoline, jet fuel and fuel oils are excluded. By including their tonnages, the statistics would overwhelming reflect the size of this liquid bulk market. The focus of the market assessment is on dry bulk and breakbulk cargoes. By including their tonnages, the statistics would overwhelming reflect the size of this liquid bulk market. TEC Inc. 48 Ports of Sydney Master Plan November 2007

Table 4-3 Bulk Import Market to Atlantic Canada by Commodity – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Coal 2,930 3,3384 2,727 2,943 3,152 Petroleum Products 1,182 1,484 1,726 1,853 1,806 Chemicals 422 863 890 888 912 Non-Metallic Minerals 140 164 189 203 164 Fertilizer 123 71 67 94 132 Metallic Ores & Conc 98 67 92 56 19 Non-Met Min Prod 8 25 0 0 0 Non-Metallic Waste 0 6 5 5 0 Gravel & Stone 7 0 0 0 0 Woodchips 0 0 3 0 0 Sand 0 0 0 0 0 Total 4,910 6,064 5,698 6,044 6,184 (Market Share) 2000 2001 2002 2003 2004 Coal 59.7% 55.8% 47.9% 48.7% 51.0% Petroleum Products 24.1% 24.5% 30.3% 30.7% 29.2% Chemicals 8.6% 14.2% 15.6% 14.7% 14.7% Non-Metallic Minerals 2.8% 2.7% 3.3% 3.4% 2.7% Fertilizer 2.5% 1.2% 1.2% 1.6% 2.1% Metallic Ores & Conc 2.0% 1.1% 1.6% 0.9% 0.3% Non-Met Min Prod 0.2% 0.4% 0.0% 0.0% 0.0% Non-Metallic Waste 0.0% 0.1% 0.1% 0.1% 0.0% Gravel & Stone 0.1% 0.0% 0.0% 0.0% 0.0% Woodchips 0.0% 0.0% 0.1% 0.0% 0.0% Sand 0.0% 0.0% 0.0% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-4 presents the bulk import tonnage handled through Atlantic Canada ports. The table shows Sydney Harbour is the leading port of bulk imports in Atlantic Canada. Sydney tonnage is variable but shows an increasing trend overall. Tonnage peaked in 2004. Sydney Harbour’s share of the bulk import market has also grown during this period and reached 36% in 2004. Belledune has the second highest import tonnage. Bulk tonnage has been variable. Port share has declined from 24.3% in 2000 to 21.5% in 2004. Import bulk tonnage and port share through Port Hawkesbury has declined since 2001.

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Table 4-4 Bulk Import Market to Atlantic Canada by Port – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Sydney 1,348 1,744 1,553 1,823 2,244 Belledune 1,194 1,411 1,332 1,450 1,329 Port Hawksbury 899 1,175 1,025 1,088 865 Dalhousie 626 756 729 617 743 Saint John 187 534 624 586 507 Come-By-Chance 351 200 172 199 245 Other 305 244 264 282 251 Total 4,910 6,064 5,698 6,043 6,184 (Market Share) 2000 2001 2002 2003 2004 Sydney 27.5% 28.8% 27.3% 30.2% 36.3% Belledune 24.3% 23.3% 23.4% 24.0% 21.5% Port Hawkesbury 18.3% 19.4% 18.0% 18.0% 14.0% Dalhousie 12.7% 12.5% 12.8% 10.2% 12.0% Saint John 3.8% 8.8% 11.0% 9.7% 8.2% Come-By-Chance 7.2% 3.3% 3.0% 3.3% 4.0% Other 6.2% 4.0% 4.6% 4.7% 4.1% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-5 identifies the bulk commodities imported through the principal Atlantic Canada ports identified above in 2004. The table shows import coal represents 51% of the import bulk market. Coal is the principal commodity imported through Sydney and Belledune, and is 34% of the Port Hawkesbury import bulk market. Petroleum products account for 29% of the Atlantic Canada bulk imports represents a large market for Sydney, Belledune, Port Hawkesbury and Dalhousie. Imports of chemicals dominate the Saint John and Come-By-Chance bulk import markets. Table 4-5 Bulk Import Market through Atlantic Canada Ports - 2004 (Thousand Tons) Coal Petro Chem Non-Met Fertilizer Other Total Prod Minerals Sydney 1,843 401 0 0 0 0 2,244 Belledune 1,015 263 33 0 0 19 1,329 Port Hawkesbury 295 380 58 132 0 0 864 Dalhousie 0 743 0 0 0 0 743 Saint John 0 0 505 2 0 0 507 Come-By-Chance 0 18 227 0 0 0 245 Other 0 0 89 30 132 0 251 Total 3,152 1,806 912 164 132 19 6,184

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United States Table 4-6 presents bulk import markets by U.S. Customs District for the North Atlantic port range. Hereafter, the term “port” will be used in lieu of “customs district”. The table shows total bulk imports to the North Atlantic ports grew 3.6% per year between 2003 and 2005. Tonnage declined 8% in 2006. The table shows mineral fuels5 (petroleum and coal) accounts for 87% of the import bulk tonnage into the North Atlantic. Tonnage also grew between 2003 and 2005 with a decline in 2006. Non-metallic minerals (salt, stone, etc) represent 8.7% of the import market. Tonnage follows the same trend as the previously mentioned bulk namely increasing tonnage followed by a decline in 2006. Ores, slag and ash imports have shown steady growth through the period averaging 4.6% growth per year. Organic chemical imports have declined 40% between 2002 and 2006. Table 4-6 Bulk Import Market to the United States by Commodity – 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Petroleum Prod, Coal 141,648 146,078 151,687 140,670 Salt, Sulfur, Stone, Lime 14,332 14,794 16,129 13,166 Ores, Slag & Ash 3,673 3,709 3,715 4,197 Organic Chemicals 2,227 2,366 2,077 1,419 Inorganic Chemicals 794 824 809 707 Sugars 591 631 778 1,023 Tallow 197 240 245 202 Misc Chemical Products 109 83 77 65 Plastics 52 46 45 49 Total 163,622 168,771 175,562 161,498 (Market Share) 2003 2004 2005 2006 Coal, Petroleum Products 86.6% 86.6% 86.4% 87.1% Non-Metallic Minerals 8.8% 8.8% 9.2% 8.2% Ores, Slag & Ash 2.2% 2.2% 2.1% 2.6% Organic Chemicals 1.4% 1.4% 1.2% 0.9% Inorganic Chemicals 0.5% 0.5% 0.5% 0.4% Sugars 0.4% 0.4% 0.4% 0.6% Tallow 0.1% 0.1% 0.1% 0.1% Misc Chemical Products 0.1% 0.1% 0.0% 0.0% Plastics 0.0% 0.0% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0%

Table 4-7 shows the Ports of Philadelphia and New York are the principal ports of import. Combined the two ports account for two-thirds of the import bulk tonnage. Tonnage through each port has been variable. Import tonnage through Boston has remained steady averaging a 13% share of the market during this period. Tonnages imported through other ports have been variable.

5 The tonnage statistics do not separate coal, petcoke, crude oil and fuel oils from other petroleum products. Therefore there is a difference in petroleum tonnage reported for Canada and the US. TEC Inc. 51 Ports of Sydney Master Plan November 2007

Table 4-7 Bulk Import Market to the United States by Port – 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Philadelphia 63,531 64,653 66,997 62,608 New York 49,965 49,948 50,877 46,819 Boston 21,630 21,842 21,681 20,601 Baltimore 11,961 15,198 15,212 13,265 Portland 8,854 8,299 10,132 9,015 Norfolk 3,761 4,855 5,272 4,528 Providence 3,921 3,975 5,391 4,662 Total 163,622 168,771 175,562 161,498 (Market Share) 2003 2004 2005 2006 Philadelphia 38.8% 38.3% 38.2% 38.8% New York 30.5% 29.6% 29.0% 29.0% Boston 13.2% 12.9% 12.4% 12.8% Baltimore 7.3% 9.0% 8.7% 8.2% Portland 5.4% 4.9% 5.8% 5.6% Norfolk 2.3% 2.9% 3.0% 2.8% Providence 2.4% 2.4% 3.1% 2.9% Total 100.0% 100.0% 100.0% 100.0%

U.S. bulk imports in the North Atlantic port range by commodity are presented in Table 4-8. Refinery capacity in the Philadelphia, New York and Boston areas and large consuming markets for refined products in these areas drive the import levels. Non- metallic minerals, including salt and stone, are the second largest bulk import commodity group. Salt, used for roadways and water treatment, are consumed locally. The Port of Baltimore is the terminus for several bulk commodities used in local production. Coal, coke and iron ore imported for the International Steel Group (ISG) steel operation at Sparrows Point located in the port. Gypsum is imported for wallboard production by National Gypsum and U.S. Gypsum located in the port. Sugar cane is discharged at the Domino sugar refinery also located in the port. A second sugar refinery is located in New York. Table 4-8 Bulk Import Market through U.S. North Atlantic Ports - 2006 (Thousand Tons) Coal, Crude Non- Ores, Org Sugar Inorg Other Total Oil and Metallic Slag, Chem Chem Petroleum Minerals Ash Philadelphia 59,747 1,907 125 754 8 60 7 62,608 New York 41,393 4,144 112 636 487 75 272 46,819 Boston 19,941 618 0 4 0 18 19 20,601 Baltimore 5,544 2,542 3,910 19 824 420 8 13,265 Portland 7,165 1,800 3 0 4 43 0 9,015 Providence 3,652 986 0 0 0 24 0 4,662 Norfolk 3,226 1,169 51 6 0 66 10 4,528 Total 140,670 13,166 4,197 1,419 1,023 707 315 161,498

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In summary, imported fuel products (coal, coke, crude oil and petroleum products) are the primary commodities imported through Atlantic Canada and U.S. North Atlantic ports. These products are typically discharged at end use terminals for refining, distribution or consumption. Other bulk commodities are also used locally for the most part.

4.3.1.2 Bulk Export Market The Canadian bulk export market is assessed below followed by an assessment of the U.S. bulk export market. Canada Table 4-9 presents the export bulk tonnage from Atlantic Canada. The table shows total export tonnage is variable. Total tonnage has grown an average of 2.4% per year between 2000 and 2004. Non-metallic minerals are the principal export commodity from Atlantic Canada. During the 2000-2004 period exports have averaged 56% of the bulk export market. Annual tonnage has varied as has the market share. Gravel and crushed stone exports have also been variable and averaged a 22% share of the bulk export market. Fertilizer exports have followed a variable trend as well and represent 6% of the market during the period. Non-metallic mineral exports experienced significant growth, growing 69% per year on average between 2001 and 2004. During this time market share grew from 1.7% to 7.4%. Petroleum product tonnage and market share grew between 2000 and 2003 followed by a decline in 2004. Metallic ore exports followed a similar trend in growth. Table 4-9 Bulk Export Market from Atlantic Canada by Commodity – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Non-Metallic Minerals 7,800 6,840 7,836 6,844 7,684 Gravel & Crushed Stone 1,837 3,231 2,915 3,392 2,832 Fertilizer 874 759 789 870 734 Non-Metallic Mineral Products 842 212 372 501 1,028 Petroleum Products 243 461 583 672 521 Metallic Ores & Conc 269 481 463 512 469 Woodchips 182 176 198 230 148 Chemicals 267 101 170 134 224 Sand 320 171 165 2 78 Non-Metallic Waste 37 23 100 100 102 Coal 0 0 0 33 124 Total 11,831 12,243 13,218 12,789 12,916 (Market Share) 2000 2001 2002 2003 2004 Non-Metallic Minerals 61.6% 54.9% 57.7% 51.5% 55.1% Gravel & Crushed Stone 14.5% 25.9% 21.5% 25.5% 20.3% Fertilizaer 6.9% 6.1% 5.8% 6.6% 5.3% Non-Metallic Mineral Products 6.6% 1.7% 2.7% 3.8% 7.4% Petroleum Products 1.9% 3.7% 4.3% 5.1% 3.7% Metallic Ores & Conc 2.1% 3.9% 3.4% 3.9% 3.4% Woodchips 1.4% 1.4% 1.5% 1.7% 1.1% Chemicals 2.1% 0.8% 1.3% 1.0% 1.6%

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2000 2001 2002 2003 2004 Sand 2.5% 1.4% 1.2% 0.0% 0.6% Non-Metallic Waste 0.3% 0.2% 0.7% 0.8% 0.7% Coal 0.0% 0.0% 0.0% 0.3% 0.9% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-10 presents the historical bulk export tonnage through Atlantic Canada ports. The table shows Port Hawkesbury is the leading port for bulk exports in Atlantic Canada. Tonnage through the port grew an average 3.2% per year between 2000 and 2004. Market share has varied slightly through the period averaging 27.5%. Exports from Halifax have grown 6.7% per year since 2001. Market share also grew during this time. Hantsport exports declined 10% annually from 2000 to 2003 and then grew 43% the following year. Market share also declined through 2003 and then rose in 2004. Average share for the 5- year period is 12.5%. Bayside and Saint John export tonnages have been variable as has their market shares. Average market share for Bayside was 9.7% and 9.5% for Saint John between 2000 and 2004. Table 4-10 Bulk Export Market from Atlantic Canada by Port – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Port Hawkesbury 3,425 3,528 3,618 3,696 3,887 Halifax 2,840 2,526 2,764 2,835 3,066 Hantsport 1,775 1,658 1,629 1,297 1,851 Bayside 950 1,316 1,280 1,504 1,339 Saint John 1,245 1,202 1,220 1,350 1,215 Little Narrows 647 588 797 795 720 Corner Brook 779 561 1,017 590 497 Belledune 438 600 625 576 519 Come-By-Chance 104 144 149 284 364 Other 469 331 490 362 487 Total 11,831 12,243 13,218 12,789 12,916 (Market Share) 2000 2001 2002 2003 2004 Port Hawkesbury 27.0% 28.3% 26.6% 27.8% 27.9% Halifax 22.4% 20.3% 20.3% 21.3% 22.0% Hantsport 14.0% 13.3% 12.0% 9.8% 13.3% Bayside 7.5% 10.6% 9.4% 11.3% 9.6% Saint John 9.8% 9.7% 9.0% 10.2% 8.7% Little Narrows 5.1% 4.7% 5.9% 6.0% 5.2% Corner Brook 6.1% 4.5% 7.5% 4.4% 3.6% Belledune 3.5% 4.8% 4.6% 4.3% 3.7% Come-By-Chance 0.8% 1.2% 1.1% 2.1% 2.6% Other 3.7% 2.7% 3.6% 2.7% 3.5% Total 100.0% 100.0% 100.0% 100.0% 100.0%

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Table 4-11 identifies the principal bulk commodities exported from Atlantic Canada ports. The table identifies the bulk commodities and respective tonnages for 2004. Non- metallic mineral exports accounted for 57% of the bulk exports from Atlantic Canada in 2004. Principal ports of export are Port Hawkesbury, Halifax, Hantsport and Little Narrows. Gravel and crushed stone exports represent 20% of the total export market. Port Hawkesbury is the principal port of export. Bayside exports half the tonnage as Port Hawkesbury. Fertilizer exports from Saint John are about 5% of the export market. Metallic ore exports from Belledune represent 3% of the export market. Petroleum product exports from Saint John and Come-By-Chance are 4% of the market. Woodchip exports from Sheet Harbour and coal from Sydney are included under “Other” and are sizeable. Table 4-11 Bulk Export Market through Atlantic Canada Ports - 2004 (Thousand Tons) Non- Gravel Non- Fert Petro Met Chem Other Total Met & Met Prod Ores Min Stone Min Prod Port 1,320 1,859 668 0 0 0 0 40 3,887 Hawkesbury Halifax 3,011 0 0 0 33 0 0 23 3,066 Hantsport 1,851 0 0 0 0 0 0 0 1,851 Bayside 0 944 360 0 0 0 0 35 1,339 Saint John 163 0 0 734 204 0 0 49 1,215 Little Narrows 720 0 0 0 0 0 0 0 720 Belledune 0 0 0 0 0 410 108 0 519 Corner Brook 497 0 0 0 0 0 0 0 497 Come-By- 31 0 0 0 284 0 50 0 364 Chance Other 92 29 0 0 0 59 2 305 487 Total 7,684 2,832 1,028 734 521 469 224 452 13,944

United States Table 4-12 presents the export bulk market from the U.S. North Atlantic port range. The table shows total export tonnage has grown 16% per year on average between 2003 and 2006. The table shows coal and petroleum products to be the leading export commodity from the port range. Tonnage has grown 15.7% from 2003 to 2006. Market share averages 88%. Cereal exports have grown over 250% per year between 2004 and 2006. During this period market share has grown from 1% to 5.3%. Other bulk export markets have been variable.

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Table 4-12 Bulk Export Market from U.S. North Atlantic by Commodity – 2003- 2006 (Thousand Tons) 2003 2004 2005 2006 Coal, Petroleum Products 15,621 19,938 19,430 24,217 Cereals 327 227 588 1,467 Oilseeds 411 401 768 524 Organic Chemicals 359 654 208 193 P;astics 263 728 174 212 Animal Feed, Food Waste 91 328 86 305 Tallow 193 202 159 239 Ores, Slag & Ash 111 160 163 102 Non-Metallic Minerals 55 278 69 82 Misc Chemical Products 77 230 62 88 Inorganic Chemicals 59 136 68 66 Total 17,568 23,281 21,775 27,495 (Market Share) 2003 2004 2005 2006 Coal, Petroleum Products 88.9% 85.6% 89.2% 88.1% Cereals 1.9% 1.0% 2.7% 5.3% Oilseeds 2.3% 1.7% 3.5% 1.9% Organic Chemicals 2.0% 2.8% 1.0% 0.7% Plastics 1.5% 3.1% 0.8% 0.8% Animal Feed, Food Waste 0.5% 1.4% 0.4% 1.1% Tallow 1.1% 0.9% 0.7% 0.9% Ores, Slag & Ash 0.6% 0.7% 0.8% 0.4% Non-Metallic Minerals 0.3% 1.2% 0.3% 0.3% Misc Chemical Products 0.4% 1.0% 0.3% 0.3% Inorganic Chemicals 0.3% 0.6% 0.3% 0.2% Total 100.0% 100.0% 100.0% 100.0%

Table 4-13 presents historical U.S. bulk exports from the North Atlantic by port of export. The table shows Norfolk is the leading port of export accounting for about two- thirds of the export tonnage. Tonnage has grown 8.4% per year from 2003 to 2006 however, port share declined from 71% in 2003 to 58% in 2006. Baltimore bulk exports represent 20% of the market. Tonnage through the port has been variable. New York bulk exports tonnage has grown averaging 52.4% growth per year. The 2003 market share has more than doubled to 13.8% in 2006. Other port export levels have been variable.

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Table 4-13 Bulk Export Market from U.S. North Atlantic by Port – 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Norfolk 12,523 15,571 15,140 15,930 Baltimore 2,963 4,952 4,291 5,469 New York 1,069 1,666 1,318 3,786 Philadelphia 710 928 908 2,065 Portland 158 124 53 74 Boston 145 41 64 142 Providence 0 0 0 0 Total 17,568 23,281 21,775 27,495 (Market Share) 2003 2004 2005 2006 Coal, Petroleum Products 88.9% 85.6% 89.2% 88.1% Cereals 1.9% 1.0% 2.7% 5.3% Oilseeds 2.3% 1.7% 3.5% 1.9% Organic Chemicals 2.0% 2.8% 1.0% 0.7% Plastics 1.5% 3.1% 0.8% 0.8% Animal Feed, Food Waste 0.5% 1.4% 0.4% 1.1% Tallow 1.1% 0.9% 0.7% 0.9% Ores, Slag & Ash 0.6% 0.7% 0.8% 0.4% Non-Metallic Minerals 0.3% 1.2% 0.3% 0.3% Misc Chemical Products 0.4% 1.0% 0.3% 0.3% Inorganic Chemicals 0.3% 0.6% 0.3% 0.2% Total 100.0% 100.0% 100.0% 100.0%

U.S. bulk exports from the North Atlantic port range in 2006 are presented in Table 4-14. The table shows fuel products are the principal export commodities out of U.S. North Atlantic ports. The Port of Norfolk is the leading port of export in the port range, this would be coal exports. Norfolk coal exports represent 56.7% of the mineral fuel export market. In addition to its export coal market, Norfolk also exported over 1.6 million tons of grain and soybeans in 2006 (46% of these markets combined). Mineral fuels are the principal exports from Baltimore, New York and Philadelphia.

Table 4-14 Bulk Export Market through U.S. North Atlantic Ports - 2006 (Thousand Tons) Coal, Cereals Oil Animal Tallow Plastics Other Total Petroleum Seeds Feed, Products Waste Norfolk 13,720 1,138 516 260 118 52 126 15,930 Baltimore 5,453 0 0 1 0 11 32 5,496 New York 2,990 328 7 40 97 117 208 3,786 Philadelphia 1,908 0 0 4 3 26 123 2,065 Boston 119 0 0 0 0 6 18 142 Portland 28 0 0 0 21 0 25 74 Providence 0 0 0 0 0 0 0 0 Total 24,217 1,467 2,103 305 239 212 531 27,495

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In summary, ports of export in Atlantic Canada and the U.S. North Atlantic are serving local markets or are at the terminus of rail lines that cost effectively serve inland markets. Coal is railed by unit trains from the mines in Appalachia to export coal terminals in Norfolk and Baltimore. These routes represent the most cost effective routing for the coal (Conrail closed its export terminal in Philadelphia and rerouted coal to its export terminal in Baltimore since Baltimore was a more profitable routing). The inland transportation infrastructure serving Norfolk also benefits the export of grain and soybeans through the port. Local refineries use the ports of New York and Philadelphia for export. Similarly, bulk exports (i.e. gypsum) from Atlantic Canada ports are generated in the local hinterland of ports used for export.

4.3.2 Breakbulk Market This section presents the import and export breakbulk markets. Each market description includes assessments of the Atlantic Canada and U.S. North Atlantic and Great Lakes breakbulk markets. The U. S. Great Lakes market is presented in the aggregate since overseas markets served by individual Great Lakes ports must transit the St. Lawrence Seaway.

4.3.2.1 Breakbulk Import Market The import break bulk market assessment is separated by Canadian and U.S. markets. The Canadian market assessment is present first. Canada The import breakbulk market for Atlantic Canada is shown in Table 4-15. The table shows breakbulk imports to Atlantic Canada declined 44% from 2000 to 2001. Imports grew 29% through 2003 followed by a 4.5% decline in 2004. Vehicles are the leading breakbulk import. Imports declined 41% between 2000 and 2001. Imports grew through 2003 reaching the 2000 level. Market share grew from 2000 to 2003. Non-metallic waste imports declined 14% per year from 2001 to 2004. Food products declined 90% from 200 to 2001. Tonnage has been low since. Rubber and plastics imports grew nearly 10% per year from 2000 to 2003. Tonnage declined in 2004. Machinery imports declined 58% from 2000 to 2002. Since that time imports have more than quadrupled by 2004.

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Table 4-15 Breakbulk Import Market to Atlantic Canada by Commodity – 2000- 2004 (Thousand Tons) 2000 2001 2002 2003 2004 Vehicles 77 46 55 77 57 Meats, Poultry, Fish 72 36 44 43 53 Non-Metallic Waste 51 55 54 47 35 Food Prod, Non-Al Bev 164 16 11 33 16 Rubber, Tires, Plastics 38 37 41 50 42 Non-Ferrous Mtl Forms 23 11 45 61 41 Grain 21 56 57 37 7 Machinery 37 19 15 37 64 Articles of Metal 50 21 30 14 11 Other 104 48 54 48 100 Total 637 346 405 447 427 (Market Share) 2000 2001 2002 2003 2004 Vehicles 12.1% 13.3% 13.5% 17.3% 13.4% Meats, Poultry, Fish 11.3% 10.3% 10.8% 9.5% 12.4% Non-Metallic Waste 8.0% 16.0% 13.4% 10.5% 8.3% Food Prod, Non-Al Bev 25.8% 4.7% 2.7% 7.4% 3.8% Rubber, Tires, Plastics 6.0% 10.8% 10.1% 11.3% 9.9% Non-Ferrous Mtl Forms 3.6% 3.2% 11.0% 13.7% 9.6% Grain 3.4% 16.2% 14.0% 8.3% 1.7% Machinery 5.8% 5.6% 3.8% 8.2% 15.0% Articles of Metal 7.9% 6.1% 7.4% 3.1% 2.5% Other 16.3% 13.9% 13.3% 10.7% 22.4% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-16 shows Halifax is the principal port for breakbulk import into Atlantic Canada. Halifax import tonnage has been variable peaking in 2000 and 2003. The Port’s greatest market share of 54% occurred in 2001. Since that time share has steadily declined to about 37% in 2004. Breakbulk imports through Saint John declined 74% from 2000 to 2001. Imports steadily increase 16.5% per year through 2004. Market share followed a similar trend with share growing from 16% in 2001 to 21% in 2004. Import tonnage through Corner Brook declined 13.4% from 2001 through 2004. During this time market share declined from 16.4% to 8.7%. The fourth largest import breakbulk port is Bayside. Tonnage through the port has been variable.

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Table 4-16 Breakbulk Import Market to Atlantic Canada by Port – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Halifax 223 188 203 222 157 Saint John 220 57 66 80 90 Corner Brook 54 59 56 49 37 Bayside 22 9 23 29 23 Port Hawkesbury 0 0 0 21 36 Long Pond 7 0 10 17 11 Argentia 17 6 6 5 12 Shelbourne 8 8 6 5 7 Other 84 21 34 20 54 Total 637 346 405 447 427 (Market Share) 2000 2001 2002 2003 2004 Halifax 35.1% 54.3% 50.1% 49.6% 36.7% Saint John 34.6% 16.4% 16.4% 18.0% 21.0% Corner Brook 8.5% 16.4% 13.8% 10.9% 8.7% Bayside 3.5% 2.7% 5.8% 6.7% 5.5% Port Hawkesbury 0.0% 0.0% 0.0% 4.6% 8.4% Long Pond 1.2% 0.0% 2.6% 3.7% 2.7% Argentia 2.7% 1.7% 1.5% 1.1% 2.8% Shelburne 1.3% 2.5% 1.6% 1.1% 1.6% Other 13.2% 6.1% 8.4% 4.4% 12.7% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-17 presents the principal breakbulk imports through the primary import breakbulk ports of Atlantic Canada in 2004. The table shows Halifax and Saint John are the principal ports among the top-five import breakbulk commodities. Machinery, the top import breakbulk commodity, was primarily imported through Port Hawkesbury, Saint John and Halifax (98% of the market combined). Halifax is the primary port for imported autos (98% of the market), rubber and plastics (nearly 100%), and non-ferrous metal forms (91%). Other primary ports for the identified commodities are Saint John for meats, poultry and fish (17%), other general cargo (52%), and pulp and paper (71%). Bayside is the principal port for meat, poultry and fish imports (44% of the market).

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Table 4-17 Breakbulk Import Market through Atlantic Canada Ports - 2004 (Thousand Tons) Mach Autos, Meat, Rubber, GC NF Non Pulp, Other Total Etc Poultry Plastics Nec Metal Met Paper Fish Forms Waste Halifax 12 57 0 42 0 37 0 0 9 157 Saint John 22 1 9 0 21 0 0 18 18 90 Corner Brook 0 0 0 0 0 0 35 0 2 37 Port Hawkesbury 29 0 0 0 2 0 0 0 5 36 Bayside 0 0 23 0 0 0 0 0 0 23 Belledune 0 0 0 0 8 0 0 0 14 22 Argentia 0 0 5 0 0 0 0 0 7 12 Long Pond 0 0 0 0 0 4 0 0 8 11 Other 1 0 16 0 9 0 0 7 5 39 Total 64 57 53 42 41 41 35 26 67 427

United States Table 4-18 presents the import breakbulk markets into the U.S. North Atlantic and Great Lakes port ranges. The table shows total tonnage has grown 15.6% per year between 2003 and 2006. Primary forms of iron and steel (including slabs) are the leading breakbulk import into these U.S. port ranges. Tonnage has grown 31.4% per year between 2003 and 2006. The share of imports has also grown from 26.8% in 2003 to 39.4% in 2006. Vehicle imports declined 5% between 2003 and 2005 but then grew 28% in 2006. Vehicle share is 11% of the market. Wood imports grew from 2003 to 2005 followed by an 8% decline in 2006. Market share followed a similar trend resulting in an 8% share in 2004. Machinery imports grew 28% from 2003 to 2005. Tonnage declined slightly the following year.

Table 4-18 Breakbulk Import Market to the U.S. North Atlantic and Great Lakes by Commodity 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Iron & Steel 3,543 6,652 5,051 8,045 Vehicles 1,886 1,849 1,790 2,288 Wood & Articles of Wood 1,127 1,608 1,764 1,627 Fruit & Nuts 1,511 1,584 1,527 1,407 Paper & Paperboard 1,352 1,519 1,259 1,440 Fertilizers 690 569 550 581 Beverages & Spirits 87 337 206 1,739 Woodpulp 561 506 536 538 Machinery 417 470 532 523 Aluminum & Articles of 156 296 419 356 Articles of Iron & Steel 268 224 238 341 Other 1,625 1,326 1,588 1,545 Total 13,225 16,942 15,459 20,432

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Table 4-18 (contd.) (Market Share) 2003 2004 2005 2006 Iron & Steel 26.8% 39.3% 32.7% 39.4% Vehicles 14.3% 10.9% 11.6% 11.2% Wood & Articles of Wood 8.5% 9.5% 11.4% 8.0% Fruit & Nuts 11.4% 9.4% 9.9% 6.9% Paper & Paperboard 10.2% 9.0% 8.1% 7.1% Fertilizers 5.2% 3.4% 3.6% 2.8% Beverages & Spirits 0.7% 2.0% 1.3% 8.5% Woodpulp 4.2% 3.0% 3.5% 2.6% Machinery 3.2% 2.8% 3.4% 2.6% Aluminum & Articles of 1.2% 1.8% 2.7% 1.7% Articles of Iron & Steel 2.0% 1.3% 1.5% 1.7% Other 12.3% 7.8% 10.3% 7.6% 9.2%Total 100.0% 100.0% 100.0% 100.0%

Table 4-19 shows Philadelphia (including ports in New Jersey and Delaware) is the leading North Atlantic port for import of breakbulk cargo followed by Baltimore and New York. Great Lakes imports are comparable to Baltimore and New York levels. Tonnage through Philadelphia grew 21.7% per year on average between 2003 and 2006. Port share has grown as well with a 41% share in 2006. Baltimore import tonnage has varied but has not experience high growth or losses. Port share has declined. New York tonnage was stable between 2003 and 2005. Imports grew 84% in 2006. Port share followed a similar trend. Tonnage through Great Lakes ports grew 21.9% per year on average between 2003 and 2006. The Lakes ranked fourth in market share during 2006.

Table 4-19 Breakbulk Import Market to the United States by Port – 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Philadelphia 4,596 6,599 6,106 8,292 Baltimore 3,138 3,638 3,427 3,458 New York 1,743 1,946 1,885 3,473 Boston 805 821 806 889 Norfolk 956 828 729 719 Providence 151 127 207 340 Portland 121 131 117 156 Great Lakes 1,716 2,851 2,182 3,105 Total 13,225 16,942 15,459 20,432 (Market Share) 2003 2004 2005 2006 Philadelphia 34.8% 39.0% 39.5% 40.6% Baltimore 23.7% 21.5% 22.2% 16.9% New York 13.2% 11.5% 12.2% 17.0% Boston 6.1% 4.9% 5.2% 4.4% Norfolk 7.2% 4.9% 4.7% 3.5% Providence 1.2% 0.8% 1.3% 1.7% Portland 0.9% 0.8% 0.8% 0.8% Great Lakes 13.0% 16.8% 14.1% 15.2% Total 100.0% 100.0% 100.0% 100.0%

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U.S. breakbulk imports in the North Atlantic and Great Lakes port ranges for 2006 are presented in Table 4-20. The table shows the principal commodities by port. Iron & steel products (combining primary forms and articles thereof) are the largest commodity market representing 41% of the breakbulk imports. The Port of Philadelphia is the principal port of import for iron and steel followed by the Great Lakes ports. Combined these ranges account for 87% of the iron and steel import tonnage in 2006. About 18% of the import breakbulk market is comprised of forest products (combining wood, pulp and paper). The ports of Philadelphia and Baltimore are the dominant ports with the same market shares. Other large markets are beverages and sprits imported through New York and fruit imported through Philadelphia (the Ports of Philadelphia, Wilmington and Camden). Table 4-20 Breakbulk Import Market through U.S. N Atlantic & Great Lakes Ports - 2006 (Thousand Tons) Iron Forest Vehicles Bev & Fruit Fert Mach Alum Cocoa Other Total & Prod Spirits Steel Philadelphia 4,611 1,367 69 467 1,226 57 19 25 244 208 8,292 New York 158 206 1,369 1,125 1 8 132 4 28 442 3,473 Baltimore 470 1,362 615 79 0 195 284 262 30 161 3,458 Boston 403 170 29 64 180 0 4 0 0 38 889 Norfolk 6 196 48 2 0 317 63 1 0 85 719 Providence 18 5 151 0 0 0 1 0 0 165 340 Portland 1 147 0 0 0 2 0 0 0 5 156 Other 20 152 151 0 0 2 1 0 0 169 1,242 Great Lakes 2,720 152 7 2 0 0 20 65 0 139 3,105 Total 8,387 3,605 2,288 1,739 1,407 581 523 356 303 1,242 20,432

In summary, the import breakbulk market in Atlantic Canada is small. Halifax is the principal port in the region with a tonnage level comparable to the Port of Portland. Diverting a portion of existing breakbulk markets from Atlantic Canada to Sydney Harbour offers small tonnage opportunities for the Harbour. The U.S. North Atlantic and Great Lakes breakbulk markets offer greater tonnage opportunities but Sydney Harbour will have to compete with the U.S. ports to serve Midwestern markets. This is further address in the final section of this chapter.

4.3.2.2 Breakbulk Export Market The export breakbulk market assessment is separated by Canadian and U.S. markets. The Canadian market assessment is present first. Canada Table 4-21 presents the historical breakbulk tonnage exported from Atlantic Canada by commodity. Total export tonnage has been variable, averaging two million tons per year. The table shows woodpulp, newsprint, paper and paperboard are the principal commodities exported from the region but, exports are declining. Exports have declined 5% per year on average from 2000 to 2004. Similarly, market share has varied but has

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averaged 78% during the period. Articles of metal, stone and agricultural products exports have been variable. Lumber exports declined 81% from 2002 through 2004 while log exports grew during this time. This suggests the manufacturing of lumber was diverted overseas. Other export commodity markets have been variable.

Table 4-21 Breakbulk Export Market from Atlantic Canada by Commodity – 2000- 2004 (Thousand Tons) 2000 2001 2002 2003 2004 Pulp, Newsprint, Paper 1,775 1,570 1,556 1,526 1,439 Articles of Metal 65 121 2 25 169 Monumental/Building Stone 171 19 4 102 60 Fruits, Veg, Nuts, Soybeans, Etc 95 58 33 35 51 Lumber, Other Wood Prod 71 58 93 29 18 Non-Metallic Min Prod 0 2 57 78 3 Logs, Fuel Wood, Rough Wood 19 22 0 35 42 Printed Products 36 37 28 6 0 Meats, Poultry, Fish 31 16 9 21 24 Machinery 9 6 18 48 18 Other 121 72 96 97 33 Total 2,393 1,980 1,897 2,001 1,857 (Market Share) 2000 2001 2002 2003 2004 Pulp, Newsprint, Paper 74.2% 79.3% 82.0% 76.3% 77.5% Articles of Metal 2.7% 6.1% 0.1% 1.3% 9.1% Monumental/Building Stone 7.1% 1.0% 0.2% 5.1% 3.2% Fruits, Veg, Nuts, Soybeans, Etc 4.0% 2.9% 1.8% 1.7% 2.8% Lumber, Other Wood Prod 3.0% 2.9% 4.9% 1.4% 1.0% Non-Metallic Min Prod 0.0% 0.1% 3.0% 3.9% 0.1% Logs, Fuel Wood, Rough Wood 0.8% 1.1% 0.0% 1.7% 2.3% Printed Products 1.5% 1.9% 1.5% 0.3% 0.0% Meats, Poultry, Fish 1.3% 0.8% 0.5% 1.0% 1.3% Machinery 0.4% 0.3% 1.0% 2.4% 1.0% Other 5.1% 3.6% 5.1% 4.9% 1.8% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-22 presents the principal ports of export for Atlantic Canada breakbulk commodities between 2000 and 2004. The table shows breakbulk exports from Saint John have been declining 9.6% per year on average during this period. Port share has declined from 25.5% in 2000 to 22% in 2004. Corner Brook export tonnage has declined 1.4% per year on average. Exports through Stephenville have been fairly stable since 2001 with the exception of a peak year in 2003. Bayside exports on the other hand, have more than tripled since 2002 following an 88% decline from 2000 and market share has grown from 1.2% in 2002 to 14.5% in 2004 Halifax exports have been variable. Export tonnage in 2004 is 30% of the 2000 export tonnage. Market share in 2004 was 2.2%.

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Table 4-22 Breakbulk Export Market from Atlantic Canada by Port – 2000-2004 (Thousand Tons) 2000 2001 2002 2003 2004 Saint John 611 511 511 476 408 Corner Brook 371 362 369 366 351 Stephenville 185 176 175 133 176 Bayside 199 160 23 587 270 Botwood 161 150 149 179 132 Dalhousie 169 171 170 131 119 Liverpool 152 157 148 135 138 Halifax 210 104 169 166 63 Other 336 188 183 209 200 Total 2,393 1,980 1,897 2,001 1,857 (Market Share) 2000 2001 2002 2003 2004 Saint John 25.5% 25.8% 26.9% 23.8% 22.0% Corner Brook 15.5% 18.3% 19.5% 18.3% 18.9% Stephenville 7.7% 8.9% 9.2% 10.2% 9.5% Bayside 8.3% 8.1% 1.2% 6.7% 14.5% Botwood 6.7% 7.6% 7.9% 9.0% 7.1% Dalhousie 7.1% 8.6% 8.9% 6.6% 6.4% Liverpool 6.4% 7.9% 7.8% 6.7% 7.4% Halifax 8.8% 5.2% 8.9% 8.3% 3.4% Other 14.0% 9.5% 9.7% 10.5% 10.8% Total 100.0% 100.0% 100.0% 100.0% 100.0%

The export breakbulk market for Atlantic Canada is shown in Table 4-23. The table shows pulp, newsprint, paper and paperboard are the primary breakbulk export markets for Atlantic Canada. In 2004, these markets represented 78% of the Atlantic Canada’s breakbulk exports. Sydney Harbour did not export breakbulk products in 2004.

Table 4-23 Breakbulk Export Market through Atlantic Canada Ports - 2004 (Thousand Tons) Pulp, Articles Monument Fruits Logs, Meats, Other Total Newsprint, Of & Building & Nuts, Fuel Poultry, Paper & Metal Stone Veg & Wood, Fish Paperboard Soybeans Rough Wood Saint John 385 0 0 0 0 0 23 408 Corner Brook 349 0 0 0 0 0 2 351 Bayside 8 168 53 41 0 0 0 270 Stephenville 176 0 0 0 0 0 0 176 Liverpool 138 0 0 0 0 0 0 138 Botwood 132 0 0 0 0 0 0 132 Dalhousie 119 0 0 0 0 0 0 119 Mulgrave 76 0 0 0 0 0 0 76 Halifax 0 0 0 0 42 0 21 63 Pictou 53 0 0 0 0 0 5 58 Other 3 0 7 10 0 24 21 66 Total 1,439 169 60 51 42 24 71 1,857

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United States Table 4-24 presents the breakbulk export market from U.S. North Atlantic and Great Lakes port ranges. The table shows total export tonnage is generally between 9-10 million tons however, there was a significant spike in tonnage in 2004. In 2004 tonnage grew 47% from 2003. Iron and steel products are the leading export commodity from the port ranges. Tonnage declined 7% per year on average between 2003 and 2006. During this time market share declined from 50% to39%. Wood and woodpulp markets have been variable although woodpulp market share has grown. The share for wood and wood products has been variable. Vehicles, paper and machinery exports have grown from 2003 to 2006. Forest products and machinery experienced increased exports during the 2004 spike in exports.

Table 4-24 Breakbulk Export Market from U.S. N Atlantic and Great Lakes by Commodity 2003-2006 (Thousand Tons) 2003 2004 2005 2006 Iron & Steel 4,717 3,841 3,652 3,786 Woodpulp 1,601 2,563 1,856 2,176 Wood and Articles Thereof 621 1,397 667 701 Vehicles 455 638 728 880 Paper & Paperboard 285 839 334 372 Machinery 288 718 394 399 Other 1,388 3,746 1,494 1,438 Total 9,354 13,742 9,124 9,752 (Market Share) 2003 2004 2005 2006 Iron & Steel 50.4% 28.0% 40.0% 38.8% Woodpulp 17.1% 18.7% 20.3% 22.3% Wood and Articles Thereof 6.6% 10.2% 7.3% 7.2% Vehicles 4.9% 4.6% 8.0% 9.0% Paper & Paperboard 3.0% 6.1% 3.7% 3.8% Machinery 3.1% 5.2% 4.3% 4.1% Other 14.8% 27.3% 16.4% 14.7% Total 100.0% 100.0% 100.0% 100.0%

Table 4-25 shows the historical breakbulk export tonnage through U.S. North Atlantic ports.. The table shows New York is the principal port of export for breakbulk cargo. Tonnage has grown 5% per year on average between 2003 and 2006. Port share has grown slightly. Norfolk was the beneficiary for the spike in exports in 2004. Excluding the 2004 tonnage, exports through Norfolk have grown averaging 9% per year. Port share has also grown. Export tonnage through Philadelphia experienced a 59% decline between 2003 and 2004. Since that time tonnage has increased. Export tonnage through other North Atlantic ports has been variable. Exports from the Great Lakes have declined 31.4% per year. The Great Lakes market share declined to 2% by 2006.

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Table 4-25 Breakbulk Export Market from U.S. N Atlantic and Great Lakes by Port 2003-2006 (Thousand Tons) 2003 2004 2005 2006 New York 3,644 3,592 3,931 4,215 Norfolk 1,061 6,687 1,211 1,375 Philadelphia 1,490 612 942 955 Baltimore 877 801 1,145 1,089 Boston 726 938 814 824 Portland 617 603 562 714 Providence 296 257 215 372 Great Lakes 643 252 304 208 Total 9,354 13,742 9,124 9,752 (Market Share) 2003 2004 2005 2006 New York 39.0% 26.1% 43.1% 43.2% Norfolk 11.3% 48.7% 43.1% 14.1% Philadelphia 15.9% 4.5% 13.3% 9.8% Baltimore 9.4% 5.8% 10.3% 11.2% Boston 7.8% 6.8% 12.6% 8.5% Portland 6.6% 4.4% 8.9% 7.3% Providence 3.2% 1.9% 6.2% 3.8% Great Lakes 6.87% 1.8% 2.4% 2.1% Total 100.0% 100.0% 100.0% 100.0%

Table 4-26 shows New York accounts for 49% of the export iron and steel tonnage and 53% of the woodpulp tonnage. Baltimore is the primary port for vehicle exports accounting for 56% of the tonnage. Norfolk is the principal port for export wood products (53%) and paper (52%).

Table 4-26 Breakbulk Export Market from U.S. North Atlantic and Great Lakes Ports - 2006 (Thousand Tons) Iron & Pulp Vehicles Wood & Machinery Paper Other Total Steel Articles of Wood New York 1,846 1,149 168 158 134 61 700 4,215 Norfolk 124 143 48 375 84 195 405 1,375 Baltimore 54 186 489 117 138 2 103 1,089 Philadelphia 585 19 165 1 16 110 60 955 Boston 587 165 2 15 3 2 51 824 Portland 199 505 1 0 2 0 7 714 Providence 372 0 0 0 0 0 0 372 Great Lakes 20 10 7 35 23 2 111 208 Total 3,786 2,176 880 701 399 372 1,438 9,752

In summary, the bulk export markets are either sourced from local markets or from inland markets that are served directly by rail via the most cost effective routing. For example, local quarries or refineries are using the closest port that is cost effective and is able to

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handle the product. Similarly, coal and grains are railed directly to a port of export via the most cost effective routing. For this reason, it is unlikely terminal operations in Sydney Harbour will be able to attract bulk export markets now using other ports.

4.3.3 Container Market Traditionally, the competitive market place for Nova Scotia has been measured against the North Atlantic Port Range, which for the purposes of this study includes the range: x Halifax, x Montreal, x Boston, x NY/NJ, x Philadelphia, x Baltimore, and x Norfolk.

This competitive range for containers is highlighted for each port as follows:

Halifax-This port, from both a geographic and in a market sense, is a “competing port” to any container operation which could take place at the Ports of Sydney. However, the overall containerized market/supply demand scenario for the both near and long-term will mandate the development of a second container gateway in the region. As the Suez-based services begin to be integrated in ocean carriers’ service rotation, the requirement for additional terminal capacity will take place. It should be noted that the majority of this cargo flowing via the region will be a “market reallocation”, and will take place for containers moving to/from the hinterland markets, and not that of the regional area.

Montreal-This port has traditionally served, almost exclusively, the North Europe and Mediterranean trades. Given the required transit of the St. Lawrence Seaway (or SLS), the port also takes part in the delivery of containerized cargoes via the hinterland markets. Because of the draft restrictions of SLS, the large scale of the vessels using the Suez (Asian and ISC markets) are too great, and therefore, this market sector will likely be routed via other ports.

Boston-This port is restricted from both a space (terminal or available land) and draft standpoint. Additionally, its ability to service the hinterland markets (via rail) are limited due to a constrained network. The port will likely continue to serve the regional market which besides the Greater Boston area includes New England.

NY/NJ-The primary driver for this market is the vast consumer market for the region. The mass of the port’s total volume is cargo which is destined to/or originates in the area within a 260-mile radius of the port. The port does have an intermodal capability to/from the hinterland markets with a recently improved rail network. However, the potential to service the largest of vessels (e.g. those which

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will be transiting the Suez Canal or 10,000+ TEU6) is called into question due to current air draft restrictions (fixed height of bridges in the passageway to/from the ocean to/from some of the leading terminal areas), and the port’s overall draft capability. It is likely that these issues will be dealt with, but only in the mid-term period (or five + years).

Philadelphia-This port has traditionally operated as a niche market, serving principally the containerized reefer trades (due to their dedicated foodstuff distribution program). Nonetheless, the port does have available land for future development and intermodal connectivity with three (3) Class I railroads. What is called into question (as it relates to the premise for Sydney’s potential future success in the container markets) is the ability to service the larger vessels (8,000+ TEU), due to both draft limitations (there currently is a 45’ program now underway with likely completion slated for 2011), and the fact that these terminals are located on the river, which equates to a 75+ mile transit from the open ocean. It is likely that this port will take a much more competitive posture for the regional market and will begin to service a more generalized market offering from the ocean carrier base.

Baltimore-Although the port has excellent intermodal connectivity to/from the hinterland markets, it also is considered an “inland port” (due to the requirement to navigate from the open ocean to the terminal areas in the harbour, a distance of approximately 100 nautical miles). Industry experts continue to forecast this port’s future role as that of a “regionally-based” mid-market provider.

Hampton Roads (Norfolk)-This port, in terms of the future Sydney container offering, is true competition. Still, Sydney is a day shorter voyage for vessels traveling via the Suez Canal. Virginia Hampton Roads ports, with its already existing deep-water capability (50’+), ample terminal capacity and first-rate rail network to/from the hinterland markets (which continues to be improved), will readily be able to handle the largest of ships, and participate fully in the Suez service concept.

Volume comparisons for the North Atlantic port range period 2002 through 2005 can be found in the matrix below.

Port (‘000 TEU) 2002 2003 2004 2005 CAGR 01-05 Halifax 524 542 526 550 3.1% Montreal 1,055 1,109 1,226 1,255 5.7% Boston 145 158 176 189 3.0% NY/NJ 2,749 4,068 4,478 4,800 7.0% Philadelphia 215 147 178 187 9.0% Baltimore 508 529 558 590 1.7% Norfolk 1,438 1,646 1,809 1,982 6.4% Total 7,634 8,199 8,951 9,553 5.9%

6 Container operations are traditionally measured in “Twenty-Foot Equivalent Units” or “TEUs” TEC Inc. 69 Ports of Sydney Master Plan November 2007

4.4 Trade Routes and Market Niches Potential market opportunities could exist for Sydney Harbour through participation in growing trade routes or focusing on specialized niche markets. An assessment of key trade routes calling North Atlantic ports is presented in this section. In addition, potential specific niche cargo markets are also assessed. The breakbulk and container markets are analyzed to identify potential market opportunities. The following section presents the assessment of the breakbulk market. This is followed by the assessment of the container market.

4.4.1 Breakbulk Trades Assessment This section presents assessments of the import and export breakbulk markets. The assessments include both the Atlantic Canada and U.S. North Atlantic and Great Lakes trades.

4.4.1.1 Breakbulk Import Market The Canadian trade route assessment is presented below followed by the U.S. trade route assessment. Canada Table 4-27 shows the historical breakbulk tonnage imported from world areas to Atlantic Canada. The table identifies Northern Europe as the leading trading partner with Atlantic Canada. Imports from Northern Europe have grown 16.8% per year from 2001 to 2004. The second and third markets, the U.S. and South America, have been variable. Southeast Asia import tonnage has remained fairly constant. Other breakbulk trade routes are variable. Table 4-27 Historical Breakbulk Import Trades to Atlantic Canada Ports (Thousand Tons) 2000 2001 2002 2003 2004 Northern Europe 205 102 133 153 163 United States 145 116 126 130 95 South America 41 36 60 96 45 Southeast Asia 51 43 51 48 46 Central America 60 11 16 11 20 Australia/New Zealand 85 0 0 0 0 Mediterranean 8 25 17 0 33 Caribbean 21 7 0 9 12 Far East 15 4 1 0 0 China 3 0 0 0 7 Middle East 1 0 0 0 1 Greenland 0 0 1 1 1 Africa 1 1 0 0 0 South Asia 0 1 0 0 0 Total 637 346 405 447 422

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Table 4-28 shows the historical trend in market shares of the breakbulk import trade routes to Atlantic Canada. The table shows market share on the Northern Europe route has grown since 2002. The U.S. has declined since 2001. The third largest market, South America, grew in share from 2000 to 2003 but experienced a decline in 2004. The Southeast Asia market share has experienced a small decline. Central America share has been variable. Other markets trade with Atlantic Canada irregularly or represent small markets. Table 4-28 Historical Market Shares of Breakbulk Import Trades to Atlantic Canada (Percent Share) 2000 2001 2002 2003 2004 Northern Europe 32.2% 29.5% 32.8% 34.1% 38.5% United States 22.8% 33.7% 31.0% 29.1% 22.5% South America 6.5% 10.4% 14.9% 21.6% 10.7% Southeast Asia 8.0% 12.5% 12.5% 10.7% 10.9% Central America 9.4% 3.1% 4.0% 2.4% 4.7% Australia/New Zealand 13.3% 0.0% 0.0% 0.0% 0.0% Mediterranean 1.2% 7.2% 4.3% 0.0% 7.8% Caribbean 3.3% 2.0% 0.0% 2.0% 2.8% Far East 2.4% 1.0% 0.3% 0.0% 0.0% China 0.5% 0.0% 0.0% 0.0% 1.6% Middle East 0.2% 0.0% 0.0% 0.0% 0.3% Greenland 0.0% 0.1% 0.1% 0.1% 0.2% Africa 0.1% 0.3% 0.0% 0.0% 0.1% South Asia 0.1% 0.3% 0.0% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Northern Europe is the primary target market for Atlantic Canada breakbulk imports. The volume of annual imports suggests tonnage may be available for induced port calls to Sydney Harbour if cargo can be cost effectively distributed from Sydney to Atlantic Canada markets. The U.S., Southeast Asia and South America markets also provide regular annual volumes that may be sufficient to attract inducement vessel calls. Table 4- 29 identifies the principal ports of import in Atlantic Canada for the four primary trade routes in 2004. The table shows Halifax and Saint John are the principal ports of import for the Northern Europe trade route. These ports’ tonnages present an opportunity for Sydney Harbour to capture a portion of their markets to induce a vessel call. Corner Brook and Bayside present an opportunity for the U.S. market, and Halifax on the Southeast Asia and South America markets.

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Table 4-29 Atlantic Canada Ports Serving Major Import Breakbulk Trade Routes - 2004 (Thousand Tons) Northern United Southeast South Med Central Europe States Asia America Sea America Halifax 87 4 37 27 0 0 Saint John 55 1 9 16 0 8 Corner Brook 0 37 0 0 0 0 Port Hawkesbury 0 0 0 2 29 0 Bayside 0 23 0 0 0 0 Belledune 0 8 0 0 0 8 Long Pond 0 7 0 0 4 0 Sheet Harbour 8 0 0 0 0 0 Botwood 0 7 0 0 0 0 Shelburne 7 0 0 0 0 0 Argentia 0 3 0 0 0 4 Blacks Harbour 0 4 0 0 0 0 Bay Bulls 3 0 0 0 0 0 Bay Roberts 2 0 0 0 0 0 Harbour Grace 1 0 0 0 0 0

United States Table 4-30 presents the historical breakbulk imports into U.S. North Atlantic and Great Lakes ports. The table shows Northern Europe is the largest import trading partner of these port ranges. Tonnage on the trade has grown 16% per year on average between 2003 and 2006. South America is the second largest trade route. Annual tonnage has been variable during this time and ranges between 3-4 million tons per year. The Mediterranean is a fast growing market growing 49% per year on average from 2003 to 2006. The Mediterranean market in Atlantic Canada is small and irregular. The Far East market is also growing, 12% per year on average. The Southeast Asia market, one of the primary Atlantic Canada markets identified, is also growing 7% per year on average. Table 4-30 Historical Breakbulk Import Trades to U.S. No. Atlantic and Great Lakes (Tons) 2003 2004 2005 2006 Northern Europe 5,233 7,501 6,426 8,142 South America 3,325 3,898 3,195 4,035 Mediterranean 767 984 1,020 2,535 Far East 1,049 1,074 1,148 1,487 Central America 680 833 951 767 Canada 600 611 906 712 Southeast Asia 579 694 558 708 Africa 366 447 420 475 China 249 287 337 638 South Asia 113 291 204 416 Caribbean 114 160 181 364 Australia/New Zealand 144 123 95 91 Middle East 7 40 18 61 Total 13,225 16,942 15,459 20,432

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Table 4-31 presents the change in market share among the import trade routes to the U.S. The table shows despite increasing tonnage on the Northern Europe trade, market share is decreasing. Market share on the South America trade is also decreasing. Both decreases are a result of the strong growth on the Mediterranean trade. The Mediterranean share has more than doubled between 2003 and 2006. Table 4-31 Historical Market Shares of Breakbulk Import Trades to U.S. North Atlantic and Great Lakes (Share) 2003 2004 2005 2006 Northern Europe 39.6% 44.3% 41.6% 39.9% South America 25.1% 23.0% 20.7% 19.8% Mediterranean 5.8% 5.8% 6.6% 12.4% Far East 7.9% 6.3% 7.4% 7.3% Central America 5.1% 4.9% 6.2% 3.8% Canada 4.5% 3.6% 5.9% 3.5% Southeast Asia 4.4% 4.1% 3.6% 3.5% Africa 2.8% 2.6% 2.7% 2.3% China 1.9% 1.7% 2.2% 3.1% South Asia 0.9% 1.7% 1.3% 2.0% Caribbean 0.9% 0.9% 1.2% 1.8% Australia/New Zealand 1.1% 0.7% 0.6% 0.5% Middle East 0.1% 0.2% 0.1% 0.3% Total 100.0% 100.0% 100.0% 100.0%

Table 4-32 identifies the U.S. North Atlantic ports and Great Lakes range receiving imported breakbulk goods by trade route in 2006. The table shows all major ports are receiving cargo on almost all trade routes with the exception of Australia/New Zealand and Middle East trade routes which are served by only Baltimore and Philadelphia.

Table 4-32 U.S. North Atlantic and Great Lakes Ports Serving Import Breakbulk Trade Routes - 2006 (Thousand Tons) Phil NY Balt Bos Norf Prov Port Great Lakes Northern Europe 2,697 856 1,946 398 251 103 27 1,865 South America 1,950 922 488 319 18 141 1 197 Mediterranean 1,458 91 201 57 131 5 3 590 Far East 176 825 348 31 70 19 0 18 Central America 561 69 56 15 0 27 0 38 Canada 47 131 35 0 68 0 121 309 Southeast Asia 404 56 53 12 129 3 3 48 China 340 163 62 17 11 20 0 25 Africa 271 69 120 4 9 0 0 1 South Asia 241 112 4 17 4 23 0 14 Caribbean 56 179 84 19 26 0 0 0 Australian/New Zealand 74 0 17 0 0 0 0 0 Middle East 18 1 43 0 0 0 0 0

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In summary, the import breakbulk market in Atlantic Canada is very small and does not present a strong potential for Sydney Harbour unless focused marketing can be successful in emphasizing and capturing cargo for its intermodal connectivity to inland markets. The four trade routes with steady volumes into Atlantic Canada ports; Northern Europe, United States, Southeast Asia and South America; are served by four ports, Halifax, Saint John, Corner Brook and Bayside. Other than Halifax, these ports serve local niche markets. Halifax serves local and inland markets. All import markets to the U.S., other than Australia/New Zealand and the Middle East, have large markets that present the potential for some diversion to Sydney Harbour if the Harbour can cost effectively serve the U.S. Midwestern market. Further analysis focusing on Atlantic Canada’s import trade with Northern Europe and the United States is presented in Section 4.4.3. Further analysis on the U.S. breakbulk import trade with Northern Europe, South America and the Mediterranean is also provided in Section 4.4.3.

4.4.1.2 Breakbulk Export Market Table 4-33 shows the historical breakbulk tonnage exported from Atlantic Canada to world areas. Northern Europe is the leading trading partner with Atlantic Canada. The table shows exports to Northern Europe have been fairly steady in recent years. The second market, the U.S., has been variable during the period. Exports to South America declined 23% annually between 2000 and 2003. Tonnage increased 24% in 2004. The Mediterranean market has been variable. The Caribbean market grew 8.8% annually from 2001 to 2004. The Far East market has declined steadily by 8.69% annually on average. Other breakbulk trade routes are smaller.

Table 4-33 Historical Breakbulk Export Trades from Atlantic Canada Ports (Thousand Tons) 2000 2001 2002 2003 2004 Northern Europe 684 497 582 582 535 United States 555 462 389 529 488 South America 348 268 231 158 196 Mediterranean 209 229 192 225 191 Caribbean 156 143 179 185 184 Far East 178 165 159 139 125 Central America 79 68 79 92 37 Middle East 60 59 29 35 27 Australia/New Zealand 45 37 34 11 1 South Asia 35 12 1 21 32 China 2 23 11 7 17 Southeast Asia 29 4 2 6 18 Greenland 8 9 8 10 5 Africa 5 1 2 0 0 Total 2,393 1,980 1,897 2,001 1,857

Table 4-34 shows the historic trend in market shares of the breakbulk export trade routes from Atlantic Canada. The table shows all trade route shares are variable with no major trends occurring between 2000 and 2004.

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Table 4-34 Historical Market Shares of Breakbulk Export Trades from Atlantic Canada (Percent Share) 2000 2001 2002 2003 2004 Northern Europe 28.6% 25.1% 30.7% 29.1% 28.8% United States 23.2% 23.4% 20.5% 26.5% 26.3% South America 14.6% 13.5% 12.2% 7.9% 10.6% Mediterranean 8.7% 11.6% 10.1% 11.3% 10.3% Caribbean 6.5% 7.2% 9.4% 9.3% 9.9% Far East 7.5% 8.4% 8.4% 7.0% 6.7% Central America 3.3% 3.5% 4.2% 4.6% 2.0% Middle East 2.5% 3.0% 1.5% 1.8% 1.5% Australia/New Zealand 1.9% 1.9% 1.8% 0.6% 0.1% South Asia 1.5% 0.6% 0.1% 1.0% 1.7% China 0.1% 1.2% 0.6% 0.4% 0.9% Southeast Asia 1.2% 0.2% 0.1% 0.3% 1.0% Greenland 0.3% 0.5% 0.4% 0.5% 0.3% Africa 0.2% 0.1% 0.1% 0.0% 0.0% Total 100.0% 100.0% 100.0% 100.0% 100.0%

Table 4-35 presents export breakbulk tonnage through Atlantic Canada ports by major trade route. The table show Saint John is the primary port for breakbulk exports to Northern Europe and the Fareast. Corner Brook and Bayside are the primary ports of export to the U.S.. A large number of ports also export to Northern Europe. Several ports serve the South America and Mediterranean trade routes. Table 4-35 Atlantic Canada Ports Serving Major Export Breakbulk Trade Routes - 2004 (Thousand Tons) Northern United South Med Caribbean Far East Europe States America Sea Saint John 142 0 24 19 23 105 Corner Brook 58 282 6 4 0 0 Bayside 10 199 9 4 46 0 Stephenville 56 0 28 76 2 0 Liverpool 0 0 86 0 44 0 Botwood 21 0 20 21 66 0 Dalhousie 66 0 17 45 1 20 Mulgrave 46 0 0 30 0 0 Halifax 52 2 0 0 0 0 Pictou 48 0 0 10 0 0 Belledune 11 0 0 5 0 0 Harbour Grace 10 0 0 0 0 0 Bay Roberts 10 0 0 0 0 0 Nain 0 0 0 7 0 0 Summerside 5 0 2 0 0 0 Charlottetown 0 0 4 0 0 0 Shelburne 0 0 0 0 3 0 Marystown 0 3 0 0 0 0 Blacks Harbour 0 2 0 0 0 0 St Anthony 1 0 0 0 0 0 Lunenburg 0 0 0 0 1 0 TEC Inc. 75 Ports of Sydney Master Plan November 2007

Table 4-36 presents the U.S. North Atlantic and Great Lakes export market by trade route. The table shows the Mediterranean, China and Northern European markets are the principal breakbulk export markets. The Mediterranean market has grown continuously between 2003 and 2006 averaging 34% per year. The China export market has declined 24% since 2003. The Northern European market has varied but has remained steady in 2005 and 2006. Exports to Southeast Asia and the Far East are declining.

Table 4-36 Historical Breakbulk Export Trades from U.S. North Atlantic and Great Lakes (Thousand Tons) 2003 2004 2005 2006 Mediterranean 1,475 2,391 2,440 3,562 China 2,382 2,690 1,952 1,905 Northern Europe 1,081 2,522 1,185 1,188 Southeast Asia 962 1,271 661 427 Far East 1,193 1,194 381 370 Central America 729 759 345 466 South Asia 356 647 705 365 South America 330 759 431 418 Middle East 252 584 423 453 Africa 188 439 267 311 Canada 218 146 145 110 Australia/New Zealand 110 235 102 91 Caribbean 99 106 88 85 Total 9,354 13,742 9,124 9,752

Table 4-37 shows the Mediterranean market share of the U.S. North Atlantic and Great Lakes breakbulk exports has more than doubled and hold a 36.5% share in 2006. China market share is variable. Northern Europe, Southeast Asia and Far East share have declined. Other trade route market shares have been variable during the 4-year period.

Table 4-38 shows the Port of New York is the primary port of breakbulk exports on all trade routes except the Middle East and Far East. Norfolk has a greater share of the trade routes over Baltimore with the exception of exports to the Middle East and South America. Philadelphia is the principal port to Central America and the Middle East. Portland is the principal port of export to the Far East.

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Table 4-37 Historical Breakbulk Export Trades from U.S. North Atlantic and Great Lakes (Share) 2003 2004 2005 2006 Mediterranean 15.8% 17.4% 26.8% 36.5% China 24.5% 19.6% 21.4% 19.5% Northern Europe 11.6% 18.4% 13.0% 12.2% Southeast Asia 10.3% 9.3% 7.2% 4.4% Far East 12.8% 8.7% 4.2% 3.8% Central America 7.8% 5.5% 3.8% 4.8% South Asia 3.6% 4.7% 7.7% 3.7% South America 3.5% 5.5% 4.7% 4.3% Middle East 2.7% 4.7% 4.6% 4.7% Africa 2.0% 3.2% 2.9% 3.2% Canada 2.3% 1.1% 1.6% 1.1% Australia/New Zealand 1.2% 1.7% 1.1% 0.9% Caribbean 1.1% 0.8% 1.0% 0.9% Total 100.0% 100.0% 100.0% 100.0%

Table 4-38 U.S. North Atlantic and Great Lakes Ports Serving Export Breakbulk Trade Routes - 2006 (Thousand Tons) NY Norf Balt Phil Bos Port Prov Great Lakes Mediterranean 1,606 267 153 457 564 262 238 15 China 1,070 281 176 10 211 142 12 3 Northern Europe 376 273 256 73 20 111 0 79 Central America 189 18 9 127 0 0 122 0 Middle East 101 39 153 157 2 0 0 1 Southeast Asia 249 135 35 1 3 1 0 3 South America 146 41 141 86 1 1 0 3 Far East 49 111 17 1 1 188 0 3 South Asia 249 75 25 3 10 1 0 3 Africa 114 108 63 3 10 0 0 12 Canada 1 7 0 11 1 6 0 84 Australia/New Zealand 15 13 56 5 0 0 0 1 Caribbean 50 8 3 21 1 2 0 0

In summary, the U.S. North Atlantic and Great Lakes breakbulk export markets are much greater than those of Atlantic Canada. The larger tonnages present greater potential opportunities for Sydney Harbour to capture a portion of the trade. This would occur if Sydney Harbour can cost effectively serve the U.S. Midwest market. Further analysis will be performed on the growing U.S. trade to the Mediterranean, as well as to China and Northern Europe. Further analysis will be performed on Atlantic Canada’s breakbulk export markets to Northern Europe and the U.S. Other Atlantic Canada markets are declining.

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4.4.2 Container Market

The criteria by which ports measure their marketability, or their ability to attract cargo is the following: 1. Proximity to Markets 2. Navigational Capabilities 3. Soundness of Infrastructure

The Ports of Sydney meet, to varying degrees, all of these major prerequisites and can successfully attract a compliment of cargoes and cargo types.

In terms of the criteria by which a port can participate in any of these markets (as identified above), the following can be stated with regard to the Ports of Sydney.

Proximity to Markets The Ports of Sydney have a competitive advantage with regard to their nearness, by way of the North Atlantic “Great Circle Route (GCR)” to markets in Europe, the Mediterranean, and those cargo clusters found via tradelanes utilizing the Suez Canal.

In fact, the Ports of Sydney could and should market themselves as the ports nearest the Suez Canal. The ports, when measured against the competing ports of The Port of NY/NJ (PNYNJ) and/or The Port of Hampton Roads (Hampton Roads), is approximately 450 nautical miles closer. This fact, on an eighteen (18) knot vessel equates to approximately 25 hours or one-calendar day sooner for arrivals and departures.

The illustration found in Figure 4-1 depicts this distance (and/or sailing-time) competitive advantage.

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Note: The black line found within the illustration represents the Ports of Sydney, while the red line the PNYNJ, and the yellow is Hampton Roads. Figure 4-1 Illustration of Sailing Distances

Therefore, in terms of overall port marketability, it is highly recommended that the Ports of Sydney concentrate on establishing markets in Europe, the Mediterranean and those trades which mandate a transit via the Suez Canal (to include Southeast Asia, the Indian Sub-Continent (ISC), and the Middle East.

This is not to say that the ports will be precluded from handling and successfully participating in other cargo markets (e.g. South/Central America, the Caribbean, or those cargoes found in other ports of North America). However, from a competitive or developmental perspective, the ports’ location relative to the North Atlantic GCR translates to direct competitive advantage when measured against those services offered at competing regional ports.

Navigational Capabilities Navigational capabilities include the following general standards: x Safe and sound navigational aids, x Safe passageway(s) (including appropriate channel and berth depths), x Adequate and reliable berth(s), and

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x Sufficient support services (to include pilots, tugs, ship’s agents, chandlery, related maintenance and repair, and ship’s voyage commissioning).

The statement can be made that, in general, the Ports of Sydney meet these customary requirements both when measured against competing regional port offerings, and the criteria by the commercial (including beneficial cargo owners [BCO’s]), shipowners, ship charterers, freight forwarders (including any stakeholder or third-party involved in the facilitation of the movement of freight such as logistics providers) and regulatory bodies (including regional, federal and international).

Nevertheless, due to an isolated draft restriction in Sydney’s outer navigation channel, there are certain vessels which will be precluded; including the larger class of container vessel (generally those above 6,000+ TEU, and those bulk-class vessels in the “super post-panamax” class

In terms of future market or commercial participation (near term) in any of three-major cargo type classifications (container, breakbulk/neobulk or bulk), the Ports of Sydney currently have in place a sufficient capability to effectively take part in the specific cargo markets. In order to create the Ports of Sydney as a “world-class” port and one which is identified in the commercial arena as “best-in-class”, or able to readily handle any cargo type, the ports will require the deepening of the outer navigation channel to enable the larger classes of ships to be accommodated.

As calculated (either formally or informally through “market perceptions”), the Ports of Sydney should put in place a mechanism by which the “navigational capability” is recognized as an important natural asset of the Sydney Harbour that can be readily upgraded to meet and develop future cargo markets and commercial opportunities.

Soundness of Infrastructure Port infrastructure (in terms of the commercial sense or cargo opportunity measurement) includes such items as: x Berth Capabilities, x Terminal Offerings, x Yard-Handling (or cargo-handling equipment offering), x Access to intermodal connectivity, and x Support service offerings.

Specifically, these infrastructure items (from a commercial perspective) include the following decisive factor(s):

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Commercial Infrastructure Definition of Infrastructure Requirement Requirement Berth Capability(ies) Ability to safely and efficiently handle various size/type/weight cargo types and their associated vessel. Terminal Offerings Includes the assets available to safely and efficiently handle various cargo types (e.g. cranes to load/discharge vessels, warehouse and/or cargo storage capability), Yard-Handling Equipment Includes yard (or cargo) handling equipment such as forklifts, heavy-lift, overhead cranes and other similar assets. Intermodal Connectivity Includes the ability for cargo to readily and competitively connect with either other waterborne modes (e.g. trans-shipment to vessels and/or barge), roadways and most importantly, railways. Support Services Includes stevedoring, trucking, freight forwarding (regulatory), cargo repair, and other such services which assist in cargo being safely and efficiently transferred to/from the vessel, the terminal to other modes of transport for ultimate delivery.

In general, the Ports of Sydney as they exist today can safely and efficiently handle a limited number of cargo types. While this sweeping statement is made in the context of measuring a “total cargo offering” as it compares to “existing port assets”, it should be noted that the ports have the ability (and have done so repeatedly in the past) to handle certain specific cargo types in a productive manner.

More importantly, with the necessary planned improvements, the port has in place the core assets required to participate in future cargo markets (inclusive of all of the major cargo types). These core port assets include:

1. Ample berth and terminal offerings, 2. Space for port expansion and to construct warehouses, lay-down areas for import/export cargoes, 3. Access to intermodal connectivity.

From a commercial standpoint, and in terms of the port’s ability to safely and efficiently handle future cargo opportunities, the ability to readily move cargo to/from hinterland markets via rail is the single-most important element for the potential of future success. The rail connectivity of Sydney Harbour is a clear competitive advantage for exploiting market opportunities.

As ports throughout North America continue to face capacity constraints (especially in infrastructure), Sydney is uniquely positioned to capitalize on its already “market- acknowledged” rail capability. This in itself will become the single most important attribute of the port’s future competitive position. When coupled with the already identified superior waterborne geographic location (e.g. proximity to GCR), the port has the ability to distinguish itself as a “best-in-class” conduit to/from the major cargo markets.

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The Ports of Sydney has in place the requisite assets: 1) available land, and 2) rail connectivity to/from the major market clusters. Because of the inherent “meltdown” that competing ports are experiencing due to their inability to properly handle cargo throughput, particularly fighting congestion and conflicts in moving cargo to/from the port area and finding suitable port land for expansion, the overriding commercial strategy for the Ports of Sydney should be to center their future competitive strategy on their unconstrained movement of cargo to/from hinterland market clusters.

4.4.3 Breakbulk Commodities/Niche Market Assessment This section presents assessments of the import and export breakbulk commodities moving though ports in the Atlantic Canada and U.S. North Atlantic port range.

4.4.3.1 Breakbulk Import Commodities Table 4-39 presents the historical tonnage of the top breakbulk imports to Atlantic Canada on targeted trade routes. The market share of the trade route for each commodity is also identified. The commodities identified represent approximately 90% of the import tonnage on the trade route. Regarding the Northern European market, vehicle imports, via the Port of Halifax, are not a potential market for Sydney Harbour at this time. The Canadian National Railroad’s (CN) railroad owns the auto terminal in Halifax and a diversion of these vehicles to Sydney would require the approval of CN. Machinery, metal forms, and articles of metal are potential markets for Sydney Harbour. Other markets are too small to include as potential opportunities. Regarding the U.S. import market, non-metallic waste (i.e. waste paper) could be a potential market opportunity however; this is likely discharged at a port serving a local paper mill.

Table 4-39 Historical Top Breakbulk Import Commodities to Atlantic Canada Ports by Trade Route (Thousand Tons) 2000 2001 2002 2003 2004 5-Year Market Share NORTHERN EUROPE Vehicles 77 45 54 76 55 40.6% Machinery 27 16 14 32 34 16.2% Non-Ferrous Metal Forms 17 1 14 17 11 8.0% Meats, Poultry, Fish 22 11 9 7 7 7.5% Articles of Metal 21 12 6 7 3 6.6% Pulp, Newsprint, Paper 20 0 0 0 19 5.1% General & Unknown Freight 2 0 0 0 24 3.5% Animal Feed 9 10 5 0 1 3.3% UNITED STATES Non-Metallic Waste 51 55 54 47 35 39.6% Grain 21 34 33 37 7 21.7% Meats, Poultry, Fish 13 15 30 32 27 19.1% General & Unknown Freight 31 1 0 0 0 5.2% Pulp, Newsprint, Paper 4 1 3 4 7 3.3% Articles of Metal 10 1 0 0 3 2.3%

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Table 4-40 presents the top breakbulk import commodities to the U.S. North Atlantic and Great Lakes port range for the Northern Europe, South America and Mediterranean trade routes. The table shows iron and steel (and other metal products) and forest products are major commodity groups moving on these trade routes. Market opportunities for these commodities will be assessed later in this chapter. The machinery market also offers potential market opportunity. Similar to the Atlantic Canada vehicle market, any potential for vehicles to be discharged in Sydney Harbour will only occur with the active engagement of CN. Vehicles are therefore not considered an opportunity. The fruit market is firmly consolidated at terminals on the Delaware River (Philadelphia). These terminals have considerable refrigerated storage capacity for the fruit. Importers conduct quality control inspections of the fruit before accepting the product. If rejected, the importers can buy from other terminals on the River. For these reasons there is no market opportunity for Sydney Harbour.

Table 4-40 Historical Top Breakbulk Import Commodities to U.S. North Atlantic and Great Lakes by Trade Route (Thousand Tons) 2003 2004 2005 2006 5-Year Market Share NORTHERN EUROPE Iron & Steel 1,568 3,494 2,596 3,864 42.2% Paper & Paperboard 1,191 1,359 1,172 1,296 18.4% Vehicles 959 902 808 992 13.4% Wood & Articles of Wood 326 488 660 698 8.0% Fertilizers 284 346 131 309 3.9% Machinery 192 202 244 229 3.2% SOUTH AMERICA Iron & Steel 1,153 1,547 1,051 850 31.8% Fruits & Nuts 860 922 825 778 23.4% Wood & Articles of Wood 353 506 510 350 11.9% Beverages & Spirits 5 199 53 1,306 10.8% Woodpulp 369 315 314 277 8.8% Copper & Articles Thereof 222 112 115 162 4.2% MEDITERRANEAN Iron & Steel 228 619 446 2,092 63.8% Fertilizers 256 140 325 151 16.4% Fruits & Nuts 66 48 58 62 4.4% Articles of Iron & Steel 14 26 50 77 3.2% Vehicles 26 34 39 49 2.8%

In summary, market opportunities for imported iron and steel, forest products and machinery will be further assessed later in the chapter. The Atlantic Canada markets are small and the potential to attract these markets to Sydney Harbour is low, particularly given forest products are now discharged at ports serving a local forest products industry.

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4.4.3.2 Breakbulk Export Commodities Table 4-41 presents the principal Atlantic Canada break bulk export commodities on the Northern Europe and U.S. trade routes. The markets are dominated by forest products. Pulp, newsprint and paper exports are the only products that offer a potential due to their tonnage. However, these products are exported from “forest products” ports serving local mill operations. As a result, there is a very low market opportunity potential. The stone exports are also using local ports for export and it is unlikely this cargo can be captured.

Table 4-41 Historical Top Breakbulk Export Commodities from Atlantic Canada Ports by Trade Route (Thousand Tons) 2000 2001 2002 2003 2004 5-Year Market Share NORTHERN EUROPE Pulp, Newsprint, Paper 550 401 487 513 434 82.8% Lumber, Other Wood Products 63 44 59 3 1 5.9% Logs, Fuel Wood, Rough Wood 14 15 0 14 42 3.0% UNITED STATES Pulp, Newsprint, Paper 311 308 305 309 280 62.4% Monumental & Building Stone 167 15 0 99 53 13.8% Articles of Metal 42 119 1 15 146 13.3%

Table 4-42 presents the breakbulk exports from the U.S. North Atlantic and Great Lakes to the Mediterranean, China and Northern Europe. The table shows the leading commodities are forest products, iron and steel (and other metals), machinery and vehicles. Opportunities for these markets, with the exception of the vehicles, are assessed in Section 4.5.

In summary, the breakbulk export of forest products, iron and steel, and machinery are further analyzed in the market opportunities assessment section (Section 4.5) in this chapter. These markets were also included in earlier discussions of the breakbulk import market.

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Table 4-42 Historical Top Breakbulk Export Commodities from U.S. North Atlantic and Great Lakes by Trade Route (Thousand Tons) 2003 2004 2005 2006 5-Year Market Share MEDITERRANEAN Iron & Steel 917 945 1,750 2,939 66.4% Wood & Articles of Wood 158 506 174 190 10.4% Woodpulp 149 213 124 95 5.9% Vehicles 59 88 79 93 3.2% Machinery 38 90 65 57 2.5% Paper & Paperboard 7 52 20 19 1.0% CHINA Woodpulp 682 988 1,075 1,315 45.5% Iron & Steel 1,464 806 445 132 31.9% Wood & Articles of Wood 91 256 135 167 7.3% Paper & Paperboard 10 228 52 68 4.0% Aluminum & Articles Thereof 18 48 89 82 2.7% Copper & Articles Thereof 51 69 45 43 2.3% NORTHERN EUROPE Vehicles 150 248 209 236 14.1% Wood & Articles of Wood 122 299 144 156 12.1% Woodpulp 90 282 113 119 10.1% Machinery 103 200 128 133 9.4% Iron & Steel 120 96 150 101 7.8% Paper & Paperboard 23 163 62 45 4.9%

4.5 Potential Market Opportunities Assessment

This section presents a further assessment of the potential for Sydney Harbour to participate in the market opportunities identified in the previous section. This section assesses the market opportunities for forest products, iron and steel, machinery and containers; and concludes with an assessment of the potential of each market to develop in Sydney Harbour. Also included in this section is an assessment of the local dry bulk market opportunities.

4.5.1 Dry Bulk Market Opportunity Assessment

Two local dry bulk market opportunities exist, export coal and export/outbound slag. Each of these markets is addressed below.

A private company, Xstrata, is currently reopening the Donkin Coal mines for production presenting a very real market opportunity for Sydney Harbour. The Donkin Mines are projected to produce approximately 5 million tons annually. Potential markets include export and domestic. Both markets will have to be served by rail as trucking is not an

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option from the mines. The domestic market includes the nearby Nova Scotia Power generating plant near Lingan, which is currently being served by rail. If this domestic market is served, it would result in the loss of coal now imported through Sydney Harbour. This loss in import tonnage however; would be more than offset by the potential export of coal, which would likely be railed to Sydney Harbour for ship loading. Some of the coal production may supply local demand, but for planning purposes it was assumed that 4 to 5 million tons may be exported and is potential bulk cargo for the Ports of Sydney. Production at the mines is one to five years away.

The second potential dry bulk opportunity is slag. Currently there is 4 million tons of slag in piles on the SYSCO property adjacent to a bulk terminal. A shipload of slag left Sydney Harbour this year destined for the Great Lakes. One use of the slag is as a binder in cement production. The slag market is under development with a potential for up to 80,000 tons per year.

In conclusion, the export coal market is a real market opportunity for Sydney Harbour in the near-term. It is assumed 4-5 million tons will be exported annually through the Harbour. The slag market is a less sure market opportunity and may develop in the long- term. In the near-term there may be a random load leaving the Harbour but the frequency cannot be estimated. Projections therefore are not developed.

4.5.2 Machinery/Project Cargo Market Opportunity Assessment The machinery market covers a wide range of products in shape and size, some of which can be classified as “project cargo”. Machinery includes small palletized products as well as large over dimensional boilers. Future market opportunities for Sydney Harbour should focus on special niche machinery markets. One such market is power generating windmills. Sydney Harbour has already discharged windmills for one local developer and the Nova Scotia market is growing. Windmills are currently produced in Europe and the Far East. Nova Scotia Power controls the energy grid in the province. In order to meet federal regulations for energy providers to meet minimum “green energy” requirements, Nova Scotia Power is required to increase its use of renewable energy sources. Wind energy is one source of renewable energy. Currently there are 41 working windmills in Nova Scotia producing 59.26 megawatts (MW) of power. The windmills range in size from 0.6 MW to 2 MW. The average size is 1.44 MW. Nova Scotia Power is required to bring on- line an additional 135 MW of renewable energy by the end of 2009. An Additional 100 MW may be required to be brought on-line by the end of 2012. Using a range of 1.44 MW to 2 MW per windmill, the potential number of windmills required by 2010 will be 68-94. An additional 50-69 windmills may be required in the three following years. Smaller MW units would result in more units. In order to accommodate the additional wind generated power, Nova Scotia Power has to ensure that the windmills can interconnect with the power grid and accommodate the additional power load. Potential private sector developers of wind farms must register with Nova Scotia Power and conduct numerous studies to show the feasibility of the

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proposed wind farm (site specific) and its interconnectivity to the power grid. Developers registering with Nova Scotia Power are entered into an “Interconnection Request Queue”. The studies are conducted while in queue while awaiting a decision by Nova Scotia Power to solicit bids. Proposals from developers are reviewed in the chronological order of when developers were placed in queue. Bids are accepted (if all necessary studies are completed and show acceptable results) based on chronological order until the total MW requirement of the solicitation is met. Nova Scotia Power can submit its own proposal but they too are placed in queue and follows the same procedures. Currently the Interconnection Request Queue contains requests from developers for over 1,900 MW of power. The announcement of awards for the 135 MW bid is expected to be made by Nova Scotia Power in October, 2007. The windmill market represents a high market opportunity for Sydney Harbour. Marketing to the winning developers should begin as soon as possible. At this time the locations for these windmills are not public but it is likely Sydney Harbour is well positioned to serve a portion of this market. It is assumed for further analysis that the machinery/project cargo market will range from 100,000 tons to 200,000 tons.

4.5.3 Steel Market Opportunity Assessment Earlier in this chapter the iron and steel market was identified as the top breakbulk import into the U.S. North Atlantic and Great Lakes from Northern Europe, South America and the Mediterranean. Lesser amounts of iron & steel are exported from these ranges to the Mediterranean, China and Northern Europe. No iron & steel market was identified for Atlantic Canada. Therefore, the potential market opportunity for Sydney Harbour is to serve the U.S. iron & steel market. This market is highly concentrated in the U.S. Midwest which would have to be served by rail from Sydney Harbour. Table 4-43 presents the estimated transportation costs of moving steel from Northern Europe to U.S. Great Lakes markets via the Great Lakes, Philadelphia and Sydney Harbour. The Northern European market was selected since Sydney Harbour is closer to Northern Europe than the U.S. North Atlantic and Great Lakes ports and would therefore represent a first port in and offer fewer sailing days. The Sydney Harbour routing also potentially offers less delay than through U.S. North Atlantic ports due to rail congestion. The table shows routing costs via Sydney Harbour are more than double the cost to serve the markets via Great Lakes ports. Five of the markets are better served via Sydney Harbour when compared to a Philadelphia routing. However, the Great Lakes routing is more cost effective. The reason Sydney Harbour costs are high is due to the rail rates provided by CN. Lower rates can be negotiated with CN but would require a minimum annual throughput to guarantee the rates. If prevailing ocean freight rates in the future are high it could result in higher vessel costs to serve the Great Lakes. The demand for small general cargo vessels (limited to 27 ft draught on the St. Lawrence Seaway) combined with an additional 10-day or more turn around time for a vessel to call the Great Lake may make Sydney Harbour more cost competitive.

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Table 4-43 Comparison of Through Transportation Cost for Steel Northern Europe to Great Lakes Steel Markets ($ per Ton) Great Phil Sydney Lakes Harbour Appleton, WI $36.28 $98.01 $78.78 Buffalo, NY $36.37 $46.32 $63.67 Burns Harbor, IN $34.41 $48.27 $83.05 Canton, OH $36.06 $58.20 $94.83 Chicago, IL $32.51 $48.27 $73.96 Cincinnati, OH $34.40 $37.27 $92.72 Cleveland, OH $30.75 $37.27 $86.93 Detroit, MI $31.05 $37.27 $66.87 Gary, IN $36.80 $48.27 $83.90 Green Bay, WI $36.28 $98.91 $79.56 Leetsdale, PA $35.50 $47.18 $75.88 Milwaukee, WI $32.36 $89.91 $76.84 Minn/St Paul, MN $46.20 $114.78 $89.11 Pittsburgh, PA $32.34 $35.27 $79.35 Sharon, PA $38.19 $37.27 $75.71 St Louis, MO $33.84 $93.51 $100.91 Toledo, OH $31.04 $37.27 $68.63 Warren, OH $46.65 $37.27 $92.72 Waukesha, WI $36.28 $90.51 $76.32 Youngstown $38.19 $37.27 $92.70

An alternative to serving the Great Lakes steel market via Sydney Harbour is the transshipment of steel in Sydney Harbour onto lakers discharging products on the St. Lawrence River. The laker can use this steel market as a backhaul opportunity and perhaps offer a favourable freight rate. The laker would operate during the same limited navigation season as ocean going vessels making direct calls at Great Lakes ports. Table 4-44 presents a comparison of the estimated costs to deliver steel to Great Lakes ports directly vs. a transshipment operation in Sydney Harbour. The table shows the cost differential is small and therefore cost competitive. Ocean going rates for direct calls into the Great Lakes could be unusually high at any time in the future making the transshipment alternative more competitive. Table 4-44 Comparison of Transshipment Routing from Sydney to the Great Lakes vs. Direct Call by Ocean Going Vessel ($ per Ton) Direct Call Burns Harbor $26.86 Chicago $26.47 Milwaukee $26.32 Detroit $25.01 Toledo $25.00 Cleveland $24.71 via Sydney $28.487

7 Includes estimated cost to discharge and load in Sydney Harbour and assumes the laker cost is half the ocean cost from Northern Europe to Sydney TEC Inc. 88 Ports of Sydney Master Plan November 2007

Disadvantages of this alternative are the additional handling costs, greater potential for damage due to double handling, storage costs and demurrage costs. Also, there are only four lakers that are certified to sail between the St. Lawrence River and Sydney. This raises the risk that lakers would not be available when needed. In conclusion, the iron and steel (and other metals) markets represent a limited potential market for Sydney Harbour. There is no Atlantic Canada market to support a steel operation and Sydney Harbour will have to compete with the U.S. Great Lakes primarily and U.S. North Atlantic ports secondarily. Rail rates could be negotiated if minimum annual guarantees (MAGs) are included. Ocean rates could be high in the future making Sydney Harbour more cost competitive. A transshipping operation to a laker is a potential market alternative. It is assumed for later analysis that Sydney Harbour will be able to receive one steel vessel call every one or two months. It is estimated this would result in a potential market for between 210,000 and 420,000 tons of steel.

4.5.4 Forest Products Market Opportunity Assessment Sydney Harbour is at a disadvantage to serve the breakbulk forest products markets, both import and export, for several reasons. The first reason is that there is no local forest products industry to provide base support for operations in Sydney Harbour. Without a local base there is little potential for vessels to call the Harbour regularly or on inducement. The second reason is that other Atlantic Canada ports serving the forest products industry have local bases that produce and/or consume the products handled over the docks. This includes company owned docks whose owners have no incentive to use docks at other ports. The third reason is that breakbulk forest products are highly susceptible to damage from handling, even using labour skilled at handling forest products. The frequency of damaging goods is sufficient cause for importers and exporters to switch terminals or ports. If Sydney Harbour were to establish a breakbulk forest products transshipping operations to serve other ports in Atlantic Canada or the U.S. North Atlantic (or Great Lakes) there would be a doubling of the number of times the products would be handled (additional discharge and load in Sydney Harbour). This would also double the potential for damage. Specially designed forest products vessels have been built to limit damage potential, although traditional vessels are also used. It is unlikely the owners of the forest products using specialized vessels would want their cargo transshipped to/from traditional vessels. The more likely alternative is for Sydney Harbour to be an originating or terminating port of call where products are trucked or railed between the terminal and inland markets. As indicated earlier, the size of the Atlantic Canada market is small and is further limited by the use of public or private terminals located in ports serving local industry. There is a sizable forest products market in the northeast and midwest U.S. that would likely be served by rail from Sydney Harbour. Given the transportation cost comparisons presented for steel, it is unlikely Sydney Harbour could cost effectively serve these U.S. markets. In conclusion, breakbulk forest products market opportunities may be limited based upon the reasons given above. There is potential for a containerized forest products

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transshipment market if a container terminal were to be built in Sydney Harbour. This assessment is based on the fact that there is very low damage potential for containerized forest products and a transshipping operation would be looked on favorably if it saved shippers money. Also, Canadian mills are mostly relying on domestic woodpulp for production. If South American woodpulp were to become a lower cost alternative (currently priced higher) there would be a high potential for shiploads of pulp to be imported into Canada. Sydney Harbour could have a potential to serve as a distribution point (or transshipment point) for the South American woodpulp. In this event, woodpulp could be received in containers, breakbulk or both. Another potential forest products opportunity may be present in the export of woodchips for fuel in European power generating as a clean source of fuel. A German company has shown interest in the Ports of Sydney during the fall 2007 for the potential export of 300,000 to 400,000 tons of woodchips per year.

4.5.5 Container Market Opportunity Assessment The single-largest cargo opportunity with regard to near term development is to develop a container terminal at the Sydport undeveloped 400 acre site to compete for a share of the Suez market receiving large container ships and unload containers for unit train transport to mid-west North American markets.

The size, location and availability of this premier waterfront parcel on the sheltered western shoreline of the South Arm is very well suited to be transformed into a state-of the-art container terminal. The land is neither located near a city center nor a densely developed residential area. In addition to the existing rail connection to the site, the natural attributes of the site and an abundance of undeveloped land, are the ideal ingredients with which to create a container terminal with on-dock rail capabilities.

Based on an analysis of likely terminal expense, the permitting of such a project with the regulatory bodies, and a thorough review of the likely competitive operating economics, the Sydport site represents the “quickest-to-market, most cost effective, greenfield container site in North America”.

The container terminal site epitomizes the business model for those ships that transit via the Suez Canal to/from the quickest growing cargo markets. It provides the fastest, most competitively priced, unconstrained method for receiving/delivering container cargo to/from North America’s cargo markets.

The premise for this statement is as follows: x Most, if not all of the ports in North America and especially the supporting transportation infrastructure (the highways/railroads) are facing capacity constraint or will face these issues in the near future. o The traditional Asian routing (via the Trans-Pacific through North American West Coast ports) has already experienced system-wide failures, above all, in the areas of transportation infrastructure (moving container via the rail to/from the hinterland markets).

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o Ships transiting the Asian markets via the Panama Canal are operationally-constrained, as vessels are limited to approximately 5,500 TEU. o While there are plans to increase or augment the Panama Canal to handle larger vessels, this is forecast not to take place until at its earliest 2014 (with industry experts forecasting a likely 2018 date). o More importantly, there are a large number of new-build container vessels currently under construction, purpose-built for transit via the Suez Canal. ƒ The majority of the vessel capacity that is being introduced between the periods 2008-2011 is for vessels with 8,000+ TEU capacities. ƒ Approximately 40% of this capacity will be for vessels that are above 10,000 TEU in size, and have operating economics that mandate a Suez transit from Asia.

x There is continued growth of trade in the worldwide container markets for the near and long-term.

x The Sydport option represents a viable alternative for reaching these distant hinterland markets through use of the already existing rail connectivity of the CN network.

It is not a case of competing with other regional ports for this cargo. Given current utilization levels at Halifax, and the announcement or commencement of a number of new container services that utilize the Suez, Nova Scotia will require a second container gateway.

Suez-based services have the potential of forcing Halifax to reach its existing container handling capacity between the years 2010-2014. While capacity can be improved at the port, it cannot be done so without: 1) Considerable expense (thus making such increases non-competitive in the marketplace, especially when measured against Sydport), 2) Taking a period for the environmental assessment and regulatory approval, which will likely last beyond 2014.

While the Port of Halifax will be able to benefit from the introduction of a number of new Suez-based container services, there are still further limitations to the port. When measured against these new vessels coming on-stream, the fixed bridges over Halifax Harbour place restrictions on the air draft requirements (or overall height of the vessel as it navigates with cargo loads) for the larger vessels at one of its terminals (Fairview Cove).

The illustration found in Figure 4-2 depicts the evolution of container vessels by class/size and anticipated operating draft requirement.

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Air Draft Reference for Port of Halifax

Too Tall for all Facilities at Halifax

Figure 4-2 Container Vessel Class/Size and Anticipated Operating Draft Requirements

Additionally, the port’s location in downtown Halifax introduces rail and road slowdowns and provides limited waterfront space for expansion. When viewed against the Sydport container port model, this contrasts dramatically; the Sydport site, with its abundance of land, can design the most operationally efficient rail connection.

Estimates of the projected cost components indicate that the terminal that the Sydport site can support can be characterized as the lowest cost new-build project (given an estimated capacity of 1,500,000 TEU development in two distinct phases) in North America.

Further competitive advantage is found in the on-going operating economics due to the design incorporating the latest cargo-handling technologies (for the vessel, terminal and rail). Additionally, given that there are no existing terminal operations on the site, when measured against other North American gateways, a competitive labour agreement is likely given that no existing work practices, wage scales or manning levels are established.

This equates to the terminal being able to match the terminal design with the most optimum manning arrangement, utilizing negotiated wage scales. It is likely (given that all container ocean carriers are contracted in this fashion) that an affiliation with the International Longshoremen’s Association (or ILA) will be required.

Cape Breton’s able and skilled workforce will be able to find abundant employment opportunities with the envisioned container operation at Sydport.

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As stated, the leading premise for the development of a “world-class” container terminal in Sydney is that: x The largest of ships (8,000+ TEU), x Which will be participating in the Suez-based market ranges (to include Southeast Asia, the ISC, Middle East, Europe (full-range and especially the southern states), and Mediterranean), x Will load/discharge substantial amounts (2,000+ moves in each direction (load/discharge)), x Destined to/from the heartland or hinterland markets of North America (besides servicing any regional needs). Sydney’s ability to service the Suez-based shipping community will fill a void and be a market niche in the highly competitive container port industry. The matrix found below compares the North Atlantic Port Ranges (by port), the South Atlantic Port Range, and the North American West Coast ports, as they relate to implementation of a Suez-based market premise. Key ports implicated in the Suez market are highlighted.

Port Range Attributes Relative to Suez Canal Market Premise

North Atlantic Port x Halifax-will be able to participate in Suez concept and market Range premise, has deep-water, air-draft restricted at one terminal, likely increase of capacity will be non-competitive when measured against competing ports, and will likely face environmental pressures. x Montreal-draft restricted, historically involved in European trades. x Boston-due to port and intermodal connectivity issues this port will not participate in the Suez premise to any large degree. x NY/NJ-given its regional consumer market, intermodal connectivity (which still faces some hurdles from both a service and cost basis) this port can and likely will participate in the Suez market premise, though there are constraints that it will have to address. x Philadelphia-given transit to/from open ocean and draft restrictions this port will not participate directly in the Suez premise. x Baltimore-given transit to/from open ocean and draft restrictions this port will not participate directly in the Suez premise. x Hampton Roads (Norfolk)-given its deep water, terminal capacity and intermodal network, this port will likely be the leading competitive factor for the successful implementation of the Suez premise at the Sydport site.

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Port Range Attributes Relative to Suez Canal Market Premise

South Atlantic Port x These ports are today principally serving the Asian market via Range (includes the Panama Canal. There remains unanswered questions as to ports from whether ocean carriers will deploy the largest of vessels (8,000+ Wilmington, NC to TEU which are presently precluded from the Panama Canal), to the South Florida) larger ports such as Charleston and Savannah. What should be noted is that the hinterland market (the market sector for the Suez premise) of North America is a relative small segment of the overall volume for this range, as the ports have traditionally serviced the regional area, and when measured competitively against other ports, do not offer the same service standards to/from interior North American points.

North American x A reallocation of the freight currently moving from Asia via the West Coast Port North American Port Range will likely take place when the Range (includes transportation infrastructure system (to include terminal and rail) Canada and U.S.) faces constraint. Today, while many of the ports face rail capacity constraint (particularly in Southern California and the Pacific Northwest, e.g. Vancouver), there has been recently (e.g. Prince Rupert), and will continue to be, the introduction of alternative methods of moving Asian based freight. What is critical to assess in measuring the potential success of the Ports of Sydney is that cargo originating and/or destined west of Singapore, the competitive economics (TEU slot costs) become favorable for a Suez-based service. Added to this is that the beneficial cargo owners are actively looking for alternative routings of the cargo given the constraint, unreliability and diminished service standards that are currently being experienced.

In summary, the container market assessment requires the construction of a state of the art container with water depths and on-dock equipment sufficient to service large container vessels and efficiently transfer containers to rail for transport to mid-west North America. Under a Phase 1 container terminal scenario, the annual volume is projected to be 750,000 TEUs; with a second phase constructed, the annual throughput would reach 1,500,000 TEUs in future years. Detailed planning already shows that such a facility can be constructed at the Sydport site for the lowest cost of any site in North America.

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5.0 Cruise Industry Trends and Market Analysis

This section provides an overview of the global and Atlantic Canada region cruise markets and a summary of the analysis of Ports of Sydney cruise operations. This information was documented in detail in the report 2007 Port of Sydney, Nova Scotia, Cruise Market Study, September, 2007, which is included as Appendix B.

5.1 Worldwide Cruise Market Overview The cruise industry has emerged as one of the fastest growing and popular segments of the worldwide travel and leisure industry. Between 1990 and 2006, passenger levels have expanded from 4.4 to an estimated 14.5 million worldwide. With many of the fundamentals that contributed to the success of the industry still in place, cruise passenger volumes are expected to continue their positive growth trend. Projection of the worldwide industry suggests passenger carrying levels could expand from the present projected 14.5 million to between 19.3 and 30.1 million by 2020. Continued strong passenger growth is incumbent upon between 40 and 120 additional new vessels being placed into operation over the next 15 years, a trend that will create demand for a number of present homeport and port-of-call facilities to expand—especially those found within the industry’s most popular and profitable regions—and over the mid- to long-term, encourage expansion into new market regions. x Three major cruise operators dominate the cruise industry worldwide—Carnival Corporation, Royal Caribbean Cruises, Ltd. (RCCL) and Star/Norwegian Caribbean Lines (NCL) Cruises. These cruise consortiums have widespread influence on cruise marketing, operations and deployment trends worldwide. A fourth relatively newcomer to the industry, Mediterranean Cruise Lines (MSC) Cruises is aggressively ordering ships entering the North American market. x Inclusive of all cruise operators, the Caribbean remains the principal location for cruise capacity placement, followed by the Mediterranean, Northern Europe and Alaska. In total, over twenty different cruise sub-regions are present within the global marketplace, with many of these consisting of even smaller deployment characteristics and typical itineraries. x Cruise line selection criteria for homeports and ports-of-call generally fall into three categories: Appeal and demand as a travel and leisure destination; type and quality of cruise tourism infrastructure needed to support vessel operations, movement and quality of experience for cruise visitors; and, a market basis and strategic fit within a greater cruise ship deployment scheme. Growth of the conventional worldwide market provides cruise lines with the impetus to expand current market offerings and expand into new and growing market sectors worldwide. With continued cruise passenger growth, this points to further expansion of the cruise industry. For the Atlantic Canada region, specifically Sydney, this means that the region overall is competing much more on a worldwide scale than in the past due to the deployment trends of the cruise line industry. In addition, growth in the industry has been tied to the deployment of larger ships into the worldwide fleet. Cruise capacity from

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the contemporary and premium segments of the North American consumer segments comprise the majority of Sydney’s cruise base.

5.1.1 Cruise Vacationer Demographics Although the cruise industry continues to strive toward globalization, the majority of cruise passengers are still sourced from two significant locations – North America and the United Kingdom. In 2006, these source markets accounted for more than 80% of the total worldwide cruise bookings. Continental Europe and Asia provide solid cruise numbers as well, although growth overall has been much slower. Record cruise bookings were achieved worldwide despite the Iraq War and other security concerns, proving the resiliency and ability of the cruise industry to perform within the overall vacation market. The Passenger Services Association (PSA), the U.K. based cruise marketing group and Cruise Lines International Association (CLIA), North America’s cruise marketing body released studies that provide some indication as to the consumer trends of the industry and more importantly the potential cruiser profile that is critical to the long-term success of the industry within the vacation market (Table 5-1). Much of the detail provided below is gleaned from these survey reports and other market sources as indicated. Table 5-1 Cruise Demographic Profiles, North Americans Representative Non-Cruise Category Cruisers Sample Vacationers

Average Age Mean Years 47 49 45

Average Income (1,000’s) US$94 US$104 $90

Male 46% 49% 49% Gender Female 54% 51% 51%

Married 80% 83% 79% Marital Status Divorced/Sep. 10% 10% 9% Single 10% 7% 12%

Full-time 56% 57% 56% Employment Status Retired 13% 16% 11% College Grad or 52% 57% 50% Education Higher Post Graduate 20% 23% 30%

Source: Cruise Market Profile, CLIA, 2007

North American Consumers Consumer trends continue to be supportive of further industry growth worldwide. Several of these are highlighted (CLIA 2007):

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x Almost 51-million people have cruised at least once; and of these, nearly 29- million (10% of U.S. Population) have cruised within the past three years. x The most likely number of North American cruisers over the next three years is 31-million with the best case of more than 50-million with incomes of more than $40,000 annually. x Cruise passengers spent approximately US$1,690 per person on a typical contemporary weeklong cruise vacation inclusive of cruise fare and onboard expenses. Cruisers spend nearly 40% more than non-cruising visitors (US$1,180). x The average cruiser has taken 3.4 cruises. Luxury cruise line passengers sail more with 9.1 cruises, followed by those who cruise with destination-driven cruise lines (8.4), premium cruise lines (5.9) and contemporary cruise lines (3.7). x The average age of actual and potential cruise consumers continues to increase (age 48.3 in 1992 vs. 49 in 2006). Household incomes for cruise passengers are high, averaging US$104,000 in 2006 for North Americans, increasing from US$58,400 in 1992 and US$79,000 in 2000. As products continue to diversify, however, cruising (as evidenced by cruise prospects) continues to be considered by individuals with lower household incomes. x Approximately 67% of cruisers plan vacations between 4 months and 1 year in advance. x Four out of five cruisers (79%) are interested in taking a future cruise. More than half (56%) of non-cruisers are interested in taking a cruise in the next three years. x There is an increasing perception that online travel retailers provide the best cruise prices. Less than one in five cruisers and non-cruise vacationers now believe that the best price is available through a travel agency. x Destination is paramount in vacation decision, followed by pricing. x Canada & New England rankled 11th amongst the “Top 12” most appealing places for a next cruise – with the top ten being Caribbean/Eastern Mexico; Alaska; Bahamas; Bermuda; Hawaii; Mediterranean/Greek Islands/Turkey; West Coast of Mexico; Europe; Panama Canal; and Coastal U.S. x Cruising is seen by a large majority of passengers as a good way to sample a geographical area/destination for future vacations. After sampling the geographical areas/destinations on their recent cruise, more than 75% say they will return for another type of vacation.

5.1.2 Cruise Vessel Growth Trends Cruise vessel growth trends and the relevant physical requirements of cruise facilities to meet the needs and expectations of the cruise vessel, operator and passenger are summarized below; additional details are provided in Appendix B. This information illustrates the requirements of the industry relevant to the construction and deployment of cruise vessels into the worldwide cruise market and Atlantic Canada in general.

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x In February 2006 Royal Caribbean International announced an order for the next generation of cruise vessel – Project Genesis - for delivery in fall 2009. Following, in September 2006 NCL contracted with Aker Yards to build two new 150,000-GT, 325-m LOA cruise vessels capable of accommodating more than 4,200-passengers and crew. The vessels are scheduled for delivery in 2009 and 2010. x Four small ships were also ordered in 2006 for the first time in more than five years – since the advent of American Classic Voyages. Pearl Seas Cruises have ordered two ships being built at Irving Shipbuilding in Halifax, Nova Scotia. These vessels accommodate 210-passengers each and are tentatively scheduled to be deployed along the Eastern Seaboard. For Sydney this could provide additional small ship deployments. x The evolution of the cruise vessel has been one of the principal mechanisms propelling industry growth. Over the past five years, the newest and most popular generation of vessels continues to have greater volumes and lengths to accommodate the area needed for large scale outside cabin development. These vessels range in length from 965 – 1,200 ft and have lower berth passenger complements of between 1,950 and 3,600. x For Sydney, the net result of the cruise vessel development trends is that current and future pier facilities, anchorages, tendering facilities and uplands areas will be needed to accommodate these large cruise vessels for the destination to remain competitive in the regional marketplace and be able to fully accommodate the future generation cruise vessels’ service requirements. This will include the ability to offer industry operators facilities and venues capable of accommodating a passenger complement upwards of 3,000 – 6,000 persons per vessel. x Selection of a model design vessel(s) dictates a programmatic response for Sydney, one that will allow the destination to meet industry needs, maintain competitiveness in the region, and plan port-of-call operations as deemed viable and within best management practices in order to be a cruise tourism destination. Presently, Sydney is used by a variety of vessels as a port-of-call. We anticipate that this will continue into the future unless Sydney specifically chooses to focus on a particular type of cruise line or tourist. This is likely not in the best long-term interest of Sydney due to the overall stature of the port relevant to the competing ports in the region.

5.1.3 Design vessel requirements Based on cruise line interviews and projection scenarios, a design vessel requirement was developed for port-of-call operations in Sydney. Based on the design, vessel consideration can be given to each of the primary infrastructure types (criteria) required to support design vessel operations for Sydney with specific emphasis on the primary infrastructure of entrance channels, turning basins, anchorages, berth(s), any new passenger terminal facilities, GTAs (Ground Transportation Areas) and other elements used to service cruise vessels in port.

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Sydney presently has demand to serve both Panamax and post-Panamax vessels. In 2007, Sydney will welcome Princess Cruises’ Grand Princess. In considering the types of vessels likely to be operating in the region over the short- (today through 4-years), mid- (5 to 9-years) and long-term (over 10-years), several important trends are worthwhile of consideration: x The average length and size of cruise vessels on an international basis continues to increase. At present, the average vessel is approximately 700 ft long, carries 1,400 passengers at 100% occupancy and is 12 years old. Based on the market assessment and specifically cruise line input cruise vessels with lengths of between 850 ft and 985 ft will likely become the operational norm and be deployed in most major cruise regions—inclusive of the Atlantic Canada region— today and over the next decade. Some larger vessels, such as the Queen Mary 2 will also call periodically. x New Safety of Life at Sea (SOLAS) rules in 2010 will inevitably hasten the withdrawal from service a considerable number of vessels that were built before 1969. This series of SOLAS rules looks to eliminate all wood from cruise vessels. There are very few vessels left in the conventional worldwide fleets, thus there will be no significant impact on the region, specifically Sydney as most, if not all vessels from the North American fleet currently calling meet and exceed these standards. x All of the 33 large vessels scheduled for introduction over the next five years have a capacity of over 2,000 passengers. Twenty-one vessels have capacity of over 2,500-passengers. Project Genesis and the NCL vessels, scheduled for delivery in 2009/10, each has an estimated capacity of more than 4,000 to 5,000-passengers. Based on deployment practices of several of the major North American and European lines—both regional and international—it is envisioned that they intend to place larger vessels in the region in the mid to long-term. These ships are likely to replace smaller vessels in fleets and would not necessarily be the largest ships of the worldwide fleet. A Voyager-class ship has already sailed in the region and is presently calling in Bermuda. The 3,840-passenger Explorer of the Seas is scheduled to call in Sydney 4 times in 2008. This will challenge the limits of the cities tourism infrastructure as will as the shore excursion operations in the region.

5.1.4 Suggested design vessels for Sydney Selection of a model design vessel(s) dictates a programmatic response for Sydney, one that will allow the destination to meet industry needs, maintain competitiveness in the region, and plan port-of-call operations as deemed viable and within best practices to be a viable cruise tourism destination. As a result of the previous analysis, the following design vessel particulars were established (See Table 5-2):

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Table 5-2 Suggested Design Vessels for Sydney Type Design Vessel 1 (Panamax) Design Vessel 2 (post-Panamax)

Pax / Crew 2,000 to 2,600 (pax) / 850 (crew) 3,000 to 4,000 (pax) / 1,200 (crew) GRT Up to 100,000 + 100,000 LOA (ft) 900 to 985 985 to 1,200 Beam (ft) Up to 118 Over 118 (generally 130 to 165) Draft (ft) Up to 28 28 to 32.8* Air Draft (ft) Less than 195 Up to 210 Note: Suggested design vessels represent primary ranges of the majority of vessels within these categories. *Queen Mary 2 has a vessel draft of 10m. Source: B&A, 2007 These design vessels incorporate the features of the various classes that are industry standards, including the Destiny, Grand, and Voyager. The Freedom, Genesis and F3 classes as Super post-Panamax vessels are not incorporated as these ships will primarily not sail on itineraries that would encompass the Ports of Sydney over the long-term. Planning for these design vessels as described, along with smaller ships currently sailing within the region and those on the new-build order list provides Sydney the flexibility it needs over the mid- to long-term to absorb changes in the cruise industry.

5.2 Atlantic Canada Cruise Region

5.2.1 Atlantic Canada Cruise Trends The region generally consists of cruise operations originating from northern U.S. Atlantic Seaboard homeports to ports-of-call in the U.S. New England states and Eastern Atlantic Canada. Cruises range from 4- to 12-days in length and run from May through October, with the majority of offerings occurring during the months of August through October. Key cruise itineraries influencing deployments and thus cruise passenger throughput to the region include World, Transatlantic, Bermuda, small ship coastal and other niche markets with smaller influences on individual ports and Provinces within Atlantic Canada. Overall, the Atlantic Canada region is relatively new to the modern cruise industry despite its relationship to the development of Cunard Line, whose founder, Samuel Cunard was a resident of Halifax, Nova Scotia. The region has mainly developed over the past 10-years in terms of increasing passenger throughput. This evolution continues as

the region develops from a North American niche cruise tourism market into a world cruise market sector. While the region is focusing on its growth in the lucrative cruise tourism sector, over the past five plus years the main Canada & New England cruise sector has now begun competing for cruise vessel deployments with worldwide cruise sectors such as Bermuda, Alaska, Mediterranean, Scandinavia & Russia and the Caribbean amongst others. This is a reflection of the growth of the cruise industry over time and the continuing development of cruise vessel deployments based on more

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accurate business models inclusive of marketing input based on cruise passenger demand cycles, financial revenue and expense analysis, and other key factors. Competition for cruise deployments has grown significantly over this period. Royal Viking Cruise Line was first credited with developing the “Fall Foliage” cruise in the early 1980’s that the Atlantic Canada region is most well known for overall. Sailing from New York City, this cruise was typically a 10- to 12-day voyage calling on small New England towns and Atlantic Canada cities, terminating in Montreal, Canada. From this point, the cruise pattern would reverse and return to New York City. It wasn’t until the tremendous growth of the cruise industry centered on the newbuild programs in the mid-1990’s that this market started its ascent as a more mainstream itinerary pattern. Part of the reason for this is due to the number of cruise vessels making transatlantic sailings from the shipyards in Europe and repositioning from the increasingly lucrative European summer cruise markets of the Mediterranean and Northern Europe. Even then, the itinerary was concentrated during the months of September and October to capture the fall colors with cruise operators typically making a limited number of 7-, 10- or 12-day sailings through the region before departing for their winter markets in the Caribbean. In concentrating the sailings into small groups, the cruise lines have been able to keep passenger pricing at a high level. North American industry capacity placement in Canada & New England grew by 240% between 1995 and 2001, with several cruise lines—most notably, Carnival—pointing to this region as the next Alaska. Since that time growth has become steadier overall with normal saw-tooth patterns of growth reflecting deployment trends related to both regional and worldwide cruise capacity movements. In 1998, Holland America began a series of 7-day cruise patterns into the region. In 1999 and 2000 Carnival Cruises, Premier and Regal began a series of 3-, 4-, 5- & 7-day cruise itinerary patterns from New York marketed to take advantage of the tremendous drive-cruise and short fly-cruise passenger potential of the northeast. Additionally, NCL extended the season in 2001 from May through October to tap into their share of the North American market. For 2002, Carnival offered additional 7-, 10- and11-day cruise options from New York. Celebrity Cruises offered 11-day sailings from Baltimore placed into off-peak sailing times (late May & early September) to attract a market that may typically opt for a fall foliage sailing in late September or October. Historically, the Canada & New England region overall (encompassing Atlantic Canada, New England, U.S. East Coast, Transatlantic, World and niche sailings) has grown at a relatively consistent pace (See Figure 5-1). From a passenger level of approximately 172,000-passengers in 2000, the region has grown to almost 240,000 passengers in 2007. This is marked by an approximate 31% growth over the period, or 3.93% per annum. Figure 5-2 provides a snapshot of the overall growth of the individual ports in the region over the 10-year period. All of the ports have seen some level of growth over the period dependent upon their value to the cruise line industry in terms of tourist destination driver, location characteristics for itinerary planning purposes, and other more subtle factors that are mainly driven by each cruise line’s specific consumer market. Distribution of passengers amongst the Atlantic Canada ports has become more through as the industry has adjusted itinerary patterns to adjust for consumer market demand. Essentially, this is driving longer sailings in the region. Halifax and Saint John continue

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to be the key recipients of cruise tourism traffic to the region. However, Sydney and Charlottetown have made strides in capturing more market share as well. These are primarily second tier ports that capture vessels sailing on cruises longer than 8-days.

Source: Atlantic Canada Cruise Association (ACCA) and B&A, 2007 Figure 5-1 Historic Canada & New England Cruise Passenger Capacity, 2000 - 2007

Source: ACCA and B&A, 2007 Figure 5-2 Cruise Passenger Throughput - Atlantic Canada Port, 1997 - 2006

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As the growth continues in the region there is also a strong likelihood that smaller ports may also see additional cruise calls aimed at the small niche cruise markets. The analysis of industry statistics suggests that growth of the region in the long-term will likely resemble the trends over the past 10 years. The continued expanding new-build order book demands new destinations over at least the next three to six years in order to meet the supply-led interests of the cruise industry. While projections will look to a 15- year horizon, projection numbers over the five to seven year range are subject to many world political and consumer market factors that are difficult to predict today. As a continuing cruise industry trend, the expansion of berth supply and the subsequent need of cruise lines to expand their overall regional cruise deployment coverage is a favorable trend for the Atlantic Canada region.

5.3 Sydney Cruise Operations

5.3.1 Sydney Overview This section analyzes the current situation for the Ports of Sydney in terms of cruise tourism and looks at the cruise sub-regions and itinerary patterns directly relevant and impacting the Ports of Sydney cruise operations. In the section that follows, each is discussed in terms of the characteristics of vessel deployment, passenger demographics and volumes, leading regional operators and itinerary composition. The relevance to each for present and future operations to Sydney is also discussed. x In 2007 the Ports of Sydney will host approximately 48,812-cruise passengers (based on lower berths) on 35 sailings, a 0.9% increase over the previous year. In 2008 the Ports of Sydney will see an approximate 76.4% increase in cruise passenger traffic to more than 86,000 on 51 cruise calls. This increase is driven by increased large vessel deployments by Princess, Royal Caribbean International (RCI), Celebrity and NCL Cruises; x Over the past five years (2003 – 2007) overall growth has been poor for Sydney (- 1.1%) due to a combination of leveling in the region, competition and a focus on shorter than 7-day cruise patterns. This has shifted for the 2008 cruise season and is reflective of the general trend in cruise growth which features a step up pattern over time; x Sydney’s strength in terms of strategic fit is to serve primarily as a port-of-call for the regional Canada & New England deployment patterns; and, x In general, Sydney fits into most of the cruise sectors given its geographic location. However, its visitor-appeal is likely lower than its marquee competitors in the region – namely Halifax. For the most part, Sydney competes directly with Charlottetown, Prince Edward Island (PEI) and Saint John, NB for cruise traffic on the Canada & New England itinerary patterns and secondarily with Halifax, Nova Scotia.

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5.3.2 Sydney’s Current Situation Holland America Line (HAL) continues to be the predominant cruise line for Sydney in 2007 and 2008 with 25 and 24 calls respectively and more than 34,000 passengers annually (Figure 5-3). In fact, for the whole of the region at present, HAL is the dominant operator due to the summer deployment schedule.

Source: B&A, 2007 Figure 5-3 Sydney Cruise Line Activity, 2007

Source: B&A, 2007 Figure 5-4 Sydney Cruise Line Activity, 2008

In 2008, with increased throughput for the Ports of Sydney additional vessels and passenger capacity are supplied by RCI, which had no presence in Sydney in 2007;

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Princess Cruises; and 4 calls by AIDA (German cruise vessel). HAL is still dominant, but the overload capacity for Sydney is spread out amongst more cruise lines, which is beneficial to Sydney due to the transient nature of the industry (Figure 5-4). In 2008, there are 5 dates which will have two cruise ships in port and one date (September 27, 2008) with three vessels and approximately 5,500 passengers (Sea Princess, Explorer of the Seas, Saga Ruby) with the two latter ships at anchor. Due to the number of tender passengers from the RCI vessel, this will be a very operationally challenging day for the Ports of Sydney from a transportation and tourism perspective; however, in 2007 the Ports appear to have met three-ship challenges similar in scope on two separate occasions. There is a concern on behalf of the cruise industry as to the volume of visitors that can be supported in Sydney based on the present tourism infrastructure. The lack of a second berthing facility provides a limiting factor for larger ships as it is difficult to conduct tender operations due to the passenger volume. Other prohibitive factors include timing of the shore excursion operations, movement of independent passengers, and direct economic impacts from both visitors and crew due to the requirements and additional time required for a tender operation. Over an eight year period, Sydney has seen tremendous growth in cruise tourism as illustrated by Figure 5-5. The largest jump in activities occurred following the redeployment of the North American cruise fleet to homeland cruise patterns following the September 11 terror incident. Since that time Sydney has seen minimal growth in passenger throughput. The year 2008 will see a large jump for the Ports of Sydney in passenger throughput. Cruise calls to Sydney have decreased the past three years since a high in 2004 of 66 calls (see Figure 5-6). The vast majority of cruise calls are seen during the months of September and October. Sydney receives many of the large vessels that sail in the region. The overall capacity of cruise ships calling in Sydney has more than tripled over the time from 564 to 1,688-passengers per ship in 2008. The jump in capacity from 2007 at 1,395 to the 2008 average is driven to some degree by the Explorer of the Seas calling with 3,114 passengers. At present, Sydney does not capture any of the smaller coastal cruise vessels or yacht-types sailing within the region as they prefer the ports of Louisburg and Baddeck. The average annual increase in passenger capacity per ship has been approximately 11% (Figure 5-7).

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Source: B&A, 2007 Figure 5-5 Cruise Passenger Throughput, 2000 – 2008*

Source: B&A, 2007 Figure 5-6 Cruise Calls, 2000 - 2007

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Source: B&A, 2007 Figure 5-7 Cruise Passengers Per Vessel, 2000 – 2008*

As discussed in section 5.2.1 the Atlantic Canada region is primarily dependent upon 7- day plus sailings based on the fall foliage cruise market to increase overall cruise passenger capacity at present. Figure 5-8 illustrates the throughput trend pattern for the Ports of Sydney over the past 8 cruise seasons. Primarily, the fall foliage pattern with the majority of cruise calls occurring in the months of September and October has continued throughout. However, there has also been a subtle increase in cruise calls in May and June due to the HAL summer deployment program. The drop in July is due to the

Source: B&A, 2007 Figure 5-8 Historical Passenger Throughput Pattern by Month, 2000 - 2007

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movement of vessels to other markets with increased per diems during that particular period such as the North Atlantic, Northern Europe or Bermuda as shown for 2006 and 2007. Based on discussions with the cruise lines, it is anticipated that the trend will continue into the mid-term, and there is a possibility for increased summer deployments as consumer demand grows and higher per diems can be obtained. Figure 5-9 provides a similar illustration using vessel calls on a monthly basis. The pattern reflects the seasonality of the Atlantic Canada cruise region, the overall increase in capacity of the vessels over time and the increased summer deployment from 2004 onwards. Figure 5-10 shows the vessel call patterns by day of the week. This pattern for Sydney is reflective of 7- and 8-day cruise patterns.

Source: B&A, 2007 Figure 5-9 Historical Vessel Throughput Pattern by Month, 2000 – 2007

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Source: B&A, 2007 Figure 5-10 Historical Percentage of Passenger Throughput by Day, 2000 - 2007

Based on the regional trends, it is anticipated that the mid-week days will continue to carry the majority of cruise calls. However, the patterns may not be as clearly defined as the industry moves into 10-day and open-jaw patterns in the region. Finally, Figure 5-11 reflects the combined annual calls for the Ports of Sydney and begins to address the future requirements for berth and/or anchorage capacity. Based on this chart, a vast majority of days when cruise vessels visit the Ports of Sydney are single calls. In 2004 Sydney peaked with 9 days with 2 ships in port. In 2006 there was a maximum of four days with 2 ships in port and for 2007 there are two days with 3 ships in port with 6,000-passengers. For 2008, it is estimated that there will be five days with 2 ships in port and one day with 3 vessels and more than 5,700 passengers.

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Source: B&A, 2007 Figure 5-11 Historical Calls Per Day, 2000 – 2007

5.3.3 Cruise sectors and itinerary patterns impacting Sydney To provide an understanding of the vessel movements, sub-regions, and itineraries offered in the Atlantic Canada region, specifically those with relevance to port-of-call operations to Sydney, several cruise market deployment patterns have been identified and reviewed in detail. Cruise sub-regions and itinerary patterns reviewed include the following: x Canada & New England; x Atlantic Coast (Small Ship Deployments); x Transatlantic; and x Round-the-World. 5.3.3.1 Canada & New England Overview The region generally consists of cruise operations originating from northern U.S. Atlantic Seaboard homeports (primarily Boston, Cape Liberty and New York) to ports-of-call in the New England States and Canadian Maritime Provinces. To a lesser extent the ports of Montreal and Quebec City are also used for homeport operations. Cruises range from 3- to 12-days in length and run from May through late October, with the majority of offerings occurring during the months of September and October. In the mid-1990s this sector started its ascent as a mainstream itinerary pattern due to the number of ships making transatlantic sailings from the shipyards in Europe, and

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repositioning from the increasingly lucrative European summer cruise markets of the Mediterranean and Northern Europe. Today, the itinerary is primarily concentrated during the months of September and October to capture the fall colors with cruise lines typically making a limited number of 7-, 10- or 12-day sailings through the region before departing for winter cruise sectors in the Caribbean. In concentrating the sailings into small groups the cruise lines have been able to keep per diems8 at a mid to high level. All of the major cruise consortiums are present in this market sector, with HAL as the primary operator due to its summer deployment of the Maasdam on 18 calls from May through October. Princess, RCI, NCL and Celebrity each offer a variety of cruise patterns in this sector in the fall foliage months. The European cruise brands of Hapag-Lloyd, Cunard, AIDA (2008), Fred Olsen, Saga and Peninsular and Oriental Cruise Lines (P&O) Cruises each make their way through the region in this sailing sector or as part of a Transatlantic or World Cruise pattern. Traditional ports-of-call on round trip sailings from the northeast U.S. homeports of 7- days and less include Halifax, Bar Harbor and Saint John. For sailings of more than 8- days and some one way patterns using Quebec City and Montreal as homeports will also use the ports of Sydney, Corner Brook, Saguenay, Charlottetown, Newport and Portland which all compete for additional regional cruise traffic. Most of the ports-of-call listed have invested into the development of marine and upland infrastructure to support the growth of the cruise industry in the region, while also supporting local business and regional tourism development. Impact / Relevance to Sydney Sydney is in a solid position to accommodate regular port-of-call activities associated with the Canada and New England market sector on sailings of greater than 7-days in duration and those that are not round trip to either Boston, New York, etc. given its distance from the region’s principal homeports and ports-of-call in the region. Based on the analysis and cruise line feedback the cruise industry is moving toward extended cruise itineraries in the region (more than 8-days) from the larger markets of New York and Boston. This bodes well for increased opportunities for the Ports of Sydney to increase its cruise throughput. The mainstream ports (particularly Bar Harbor and Halifax) provide a high level of name recognition to potential cruise passengers familiar with the region, while Sydney is a secondary port in this regard. Based on cruise line feedback, this lower recognition factor actually plays well for Sydney, by lowering the passenger expectation level of the port. Sydney is in a poor geographic position to provide for product offerings due to speed & distance patterns from which 4-, 5-, and some 7-day cruise itinerary patterns on closed-jaw itineraries9 can be derived. The primary ports of Bar Harbor (USA) and Halifax (Nova Scotia) provide the initial basis for building an itinerary on this pattern. Following the placement of these key “marquee” ports in the itinerary the cruise lines then choose between the secondary ports of Portland (USA), Newport (USA), Saint John (New Brunswick), Charlottetown (Prince Edward Island) and Sydney (Nova Scotia).

8 Per diems in the cruise industry represent fares per day, per passenger. It is commonly used to compare the fares of different cruise lines. 9 A closed-jaw itinerary is one that returns to the same port from where it started its voyage. TEC Inc. 111 Ports of Sydney Master Plan November 2007

Presently, New York and Boston are the drivers of growth for the Canada & New England cruise market. They provide the essential berth capacity, airlift, hotel and access to the critical passenger source marketplace, besides being geographically well positioned to offer several itinerary patterns and cruise durations. Both homeports are serviced by large hub airports with significant scheduled airlift at reasonable price levels, are very attractive in terms of pre- and post-cruise stay-over packaging, and have an expanding port infrastructure base that can serve the largest cruise vessels. These strengths will likely keep the vast majority of U.S. cruise embarkation traffic at these two facilities as the Canada & New England market continues to mature. Cruise lines may need to re- think deployment patterns based on berth availability in New York in the summer months, should the sector expand into the mid- to long-term, due to increasing use of berths on key weekend days for Bermuda and Caribbean sailings.

5.3.3.2 Atlantic Coast (Small Ship Deployments) Overview The Atlantic Coast cruise sector is seeing increasing growth opportunities associated with operations by small, niche regional cruise operators. The sum contribution in terms of annual passenger throughput, however, is small resulting from the use of vessels with capacity levels generally below 200-passengers. Additionally, larger mass-market vessels are using a routing inclusive of some Atlantic Canada ports and U.S. East Coast destinations en route to the Caribbean from a Canada & New England cruise season. Mainly these larger ships depart from Montreal, while the smaller vessels, such as American Cruise Lines, American Canadian Caribbean Line and Clipper Cruise Line may use Bucksport, Bangor, Portland, Boston, New York and others for homeport options. The Atlantic Coast sector is seen as mainly a seasonal early summer and fall pattern due to the cold Atlantic winter months; transitional cruises to Canada and New England; the high return summer markets of Alaska and Europe; and the hurricane season. The smaller lines are stretching this season into the summer months to capture increased market share. Additionally, large lines such as Princess and Holland America have added a significant number of cruise ports to their coastal offerings such as Gloucester, Gaspe, Lunenburg, Newport, Rockland, Castine, Camden, Belfast and Portland. This cruise sector provides a small in-road in terms of extended sailings within and through the region from which Sydney is a part. Overall, this is a relatively small market with approximately 25 sailings with 1,700- passengers being identified within 2007 that move along the Eastern Seaboard. This is a strong niche market for small cruise ships sailing within the region on a seasonal basis. Impact / Relevance to Sydney Sydney receives no cruise calls from this cruise segment at present due to its geographic position and overall tourism ambience as related to this type of cruise. These lines prefer smaller more intimate ports in the region such as Baddeck. It is clear that the philosophy of these cruises is the exploration of the smaller ports along the Eastern Seaboard and to not compete with the larger vessels in the region. Larger North American lines move southbound from their existing homeports in New York and Boston on similar routings as

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part of repositioning sailings to the Caribbean region. These one-off itineraries take in a variety of cruise ports-of-call (i.e. ports that are visited on a cruise voyage) and are generally low cost from a speed and distance perspective.

5.3.3.3 Transatlantic Overview Transatlantic itineraries typically involve the repositioning of North American and European cruise fleets from the European summer market, transitioning to the Canada and New England fall foliage cruises, and then down to the winter market in the Caribbean. Additionally, this route is used by newly-built ships moving from European shipyards to the U.S., with introductions in New York and along the lucrative U.S. East Coast marketplace. Some cruise lines also offer round-trip transatlantic sailings that touch key U.S., European and Canadian East Coast cities popular with their passenger base. These cruises are typical for the German and English cruise markets in particular with Hapag-Lloyd, Fred Olsen and P&O operating cruises from their significant homeports in Germany and England respectively. The transatlantic itineraries consist of 10- to 14-day sailings that include several port-of- call visits in England, Ireland, Norway, Iceland, Greenland, Bermuda, Newfoundland and Labrador, The Azores and Canadian Maritime Provinces before ending the voyage in New York, Boston or other East Coast ports. Over the past several years, some cruise lines have chosen to forego the northern sailings, in favor of a more southerly route that delivers the ship directly into the Caribbean or further along the lower east coast of the U.S. Cruise lines will continue to use the Transatlantic crossing to move their fleets into seasonal regions that generate the highest revenues, while also offering a unique repositioning voyage for repeat passengers to the line. These cruises do not typically generate good per diems for the cruise line, and often these sailings are not full. The general prospect for continued growth of the traditional transatlantic region is fair to good based on the assessment as the European market expands and additional vessels are placed into the consumer market. In 2007, Sydney captured a Transatlantic sailing from Saga Cruises, while in 2008 additional calls will come from HAL (2), as well as Saga. Impact / Relevance to Sydney Sydney is in a fair position to support port-of-call operations for traditional transatlantic voyage movements for medium and large vessels given its location in the region. Due to marquee value factors, speed and distance, Sydney is a secondary port in this pattern.

5.3.3.4 Round-the-World Cruises Overview The round-the-world cruise sector is very limited and mainly caters to higher-income passengers able to take extended time away from home on luxury cruise vessels. These sailings are typically 80- to 120-days in duration, divided into more modest 15- to 55-day cruise segments. These cruises pass through several regions of the world as they navigate the globe, thus all calls on the itineraries are usually one-off calls (i.e., they do not repeat ports). These sailings are also seen as exotic, and as such, cruise operators do not spend a

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significant amount of time in the larger, mass-market cruise regions. With the lower marquee value of Sydney, this sector may provide very few port-of-call visits overall. New York and Boston will see segmentation homeport visits from the world cruise ships. There are no World Cruise calls identified for Sydney in 2007 or 2008. Impact / Relevance to Sydney Sydney is in a fair to poor position to be a port-of-call for World Cruises. The growth of this sector is limited and as such Sydney may be well served to meet the needs and expectations of its current clients while concentrating on its other core market sector product (Canada & New England) that offers the greatest degree of potential calls and growth over time. New York will most likely continue to play a leading role on the Atlantic Coast for homeport operations in this cruise sector due to its overall cruise homeport logistics and marquee value.

5.3.3.5 Fit of Sydney within Identified Target Sectors Each of the target sectors identified above affords Sydney varying degrees of potential cruise line port-of-call operations. Sydney’s general potential for participation in each of the target market sectors reviewed is summarized in Table 5-3. Sydney’s strategic position in each sector was assessed either as being strong (Å), fair ( ), or weak (Æ).

Table 5-3 Fit of Sydney within Identified Target Sectors (Summary) Target Market Sydney as a Port-of-Call

Canada & New England Å

Atlantic Coast (small ship deployments) / Æ

Transatlantic

World Cruises Æ

Key: Strong (Å), Fair ( ), Weak (Æ)

Source: B&A, 2007 As presented above, Sydney’s strength in terms of strategic fit is to serve primarily as a port-of-call for the regional Canada & New England deployment patterns. As a port-of- call, Canada & New England (durations over 7-days) sailings have a strong appeal given present cruise line deployment strategies. In general, Sydney fits into most of the cruise sectors given its geographic location. In the mid- to long-term, changes to push other sectors may occur through strategic marketing efforts and other cruise tourism travel factors that may then provide new cruise port-of-call opportunities for Sydney. However, based on cruise line feedback it is apparent that the key to future success for Sydney is to address the current itinerary patterns and level of service associated with this Canada & New England cruise pattern in order to plan for growth accordingly.

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5.3.4 Cruise port competitors impacting the Ports of Sydney Several regional competitors were reviewed as to their potential short and long-range impact to cruise port-of-call operations to Sydney. A summary of their general attributes is presented in Table 5-4. Generally, based on cruise line feedback the Ports of Sydney appear to be in a unique competitive position. Each of the cruise lines surveyed had a different opinion as to the main competitor for Sydney based upon their passenger demographic, type of itinerary pattern and historical preferences. Thus, while it would appear that Charlottetown, PEI would be the direct competitor for traffic, in reality it appears that it is more of a competitive subtlety related to the length of sailing in the region. On the shorter 7-day round trip sailings, Sydney competes with the ports of Saint John (NB), Halifax (NS) and Bar Harbor (ME). Generally, these sailings do not cruise to Sydney, but turn back after Halifax. In the case of NCL, Sydney is an additional port ion this itinerary pattern. For 8-day plus and open-jaw Canada & New England itinerary patterns, Sydney is often a complementary port to Charlottetown, PEI and not an either/or proposition. While Corner Brook may provide the highest level of competition due to the speed and distance factors associated with utilizing this port in any pattern and thus eliminating or reducing the hours of call in another Canadian Maritime port. Due to the secondary value of Sydney in conjunction with the length of cruise and geographic placement, most ports in the region can be viewed as complementary ports with each benefiting due to the influences of each other on the overall marketing value of the itinerary pattern. Simply, each itinerary should include ports that offer different types of experiences and offerings to make it successful for the cruise consumer. From the review of primary attributes, strengths, and weaknesses of each of these facilities, an evaluation of the general competitive threat potential for each was prepared (see Table 5-4). The Ports of Montreal, Boston and New York (inclusive of Cape Liberty and Brooklyn) are Sydney’s primary contributor of cruise traffic into the region. Their future development directly impacts the overall cruise passenger throughput potential of the Canada & New England cruise sectors. Charlottetown, PEI appears to be the closest direct competition for port-of-call traffic in the mid-term based on the review. While Sydney and Charlottetown are geographically competitive, each falls well within the Canada & New England cruise patterns assembled and provide different types of experiences conducive to being included on several types of cruise line brand itinerary patterns.

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Table 5-4 Competitor Ports in the Region (Summary)

Cruise Facilities Future Plans / (S) Strengths / (W) Port Cruise Cruise Notes Weaknesses Berth(s) Terminal(s)

(S) Excellent access to the 3 Berths: Pugsley downtown area via walking / A/B is 1,270- shuttle, (S) Solid reputation for Working in ft./387 m. (35- assistance with Port and Tour Large tent conjunction with City ft./10 m. depth); Operators; (S) Good brand structure terminal to develop waterfront Port of Saint John, Lower Cove is recognition by North American to accommodate 2 area. A new cruise New Brunswick 735-ft./225 m. and European operators; (W) vessels; Lower terminal will be (34-ft./9.5 m. City does not always meet Cove open. completed for the depth). Tidal expectations; (W) Downtown 2008 season. range of 28-ft./8.8 area somewhat lacking for m. independent persons – lack of shopping, venues, etc.

New cruise terminal facility 1 Main Berth: adjacent to main (S) Solid secondary port as a 900-ft./275 m.; berth and destination; (S) Good tourism with depths to 39- anchorage areas. access to Cape Breton; (S) ft. (12 m.). Two Used for Ports of Sydney Cruise facility offers excellent Ports of Sydney, anchorages are passenger Master Plan operation elements; (W) Uphill Nova Scotia available within reception, retail, underway. walking access to downtown close proximity. museum and area. (W) Very limited tourism A private berth is market area. atmosphere in the downtown also available - Wide open apron area. 1,000-ft./305 m. for equipment movement and good GTA.

(S) Strong airlift and hotel Black Falcon Began renovation to components; (S) Excellent 5 Berths: Black Terminal expand terminal for tourism infrastructure; (S) Falcon has 3,000- accommodates 1 multi-use ships. Strong brand recognition in Port of Boston, ft./914 m. usable to 2 ships with Stopped following conjunction with regional and Mass. (32 to 35-ft. – another using 9/11. Plan to begin international tourists; (W) 9.75 to 10.6 m. - adjacent shed work in fall 2007, to Extremely high stevedoring depth). area. Other ships refurbish Black costs from ILU; (W) Procedures may use tents. Falcon facility. for homeporting for FIS/stevedoring are poor.

3 Piers (88,90,92) All piers in three 5 berths; 4 berths tier terminal(s) at 1,040-ft./317 for stores; Currently renovating (S) Strongest marquee value; (S) m.; 1 berth at parking, Manhattan berths. Excellent tourism infrastructure, 774-ft./236 m. (all processing of Port of New York (RCI has a two berth hotel and airlift; (S) Strong 34-ft./10.3 m. + passengers. City, New York complex in New brand recognition in conjunction depth). Brooklyn Original Jersey – Cape Liberty with regional and international Cruise Terminal warehouses with - (1,000+ft. berths). tourists. (1,000-ft. + berth no apron areas for supporting cruise work in operations.) Manhattan.

Contd.

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Table 5-4 Competitor Ports in the Region (Summary)

Cruise Facilities Future Plans / (S) Strengths / (W) Port Cruise Cruise Notes Weaknesses Berth(s) Terminal(s)

(S) Good venue for regional tourism; (S) Nice downtown New $18M Port of 495-ft. berth; Currently completing area within walking distance; (S) Cruise Passenger Charlottetown, (39.6-ft./12 m. renovation work from Good reputation for working Terminal. Open PEI depth) master plan. with cruise lines; (W) Limited area for GTA. but strong tour product; (W) Can only berth 1 ship.

(S) Unique access to National Park; (W) Due to speed & distance issues, time change it is Cruise/cargo Open cargo area difficult to have a full day in Port of Corner berth 1,188- No plans for future with no terminal port; (W) Weak tourism Brook, NFL ft./362 m. (30- development. facility. infrastructure; (W) Limited ft./10-m. depth). tourism offerings due to time in port; (W) Limited independent activities.

4 available berths Port completed a along downtown waterfront master (S) Popular venue for regional seawall – (2) plan and is currently tourism; (S) New homeport/port 800-ft./260 m., Large terminal Port of Halifax, under phase 1 of the call to differentiate products; (S) (2) 600-ft./180 m. facility complex Nova Scotia renovation process Good local tourism plus overflow. and GTA. with new facilities for infrastructure; (S) Access to (all 29 – 40-ft. – local and tourism downtown area. 8.8 to 12.1 m. needs. depths).

Source: B&A, 2007

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Table 5-5 identifies the threat levels of each of the ports identified in this section as they relate to port-of-call operations in Sydney.

Table 5-5 Sydney Competitors for Cruise Operations

Competitor Competitive Port-of-Call Threat Potential

Port of Saint John, New Brunswick

Port of Boston, Massachusetts (complementary)

Port of New York City, New York (complementary)

Port of Charlottetown, PEI / Å

Port of Corner Brook, NFL

Port of Halifax, Nova Scotia / Å

Key: Strong (Å), Fair ( ), Weak (Æ)

Source: B&A, 2007

5.3.5 Cruise Line Needs and Selection Criteria This section provides for a means to further assess the potential opportunities for cruise tourism to Sydney. It is important and relevant to understand cruise line criteria in making deployment decisions. Their selection of homeports and ports-of-call generally fall into three categories: x Appeal as a travel and leisure destination; x Type and quality of cruise tourism infrastructure needed to support vessel operations and movement of passengers; and, x A market basis and strategic fit within a greater cruise vessel deployment scheme. European and North American Cruise Lines are focused on development of products that deliver high levels of satisfaction and a vacation experience superior to land-based options. The cruise vessel and itinerary are the primary tools used to achieve this goal. Cruise lines and their respective decision-making groups—marketing and sales, marine operations, logistics, and finance—expend significant effort in evaluating a destination (whether homeport or port-of-call), and congruently, an itinerary to ensure it meets the various criteria established to differentiate their product offering and sell desirable and

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profitable cruise products.10 A general list of cruise line decision-making groups and their primary focus in the selection process is provided in Table 5-6.

Table 5-6 Destination Selection: What is Important to the Cruise Lines?

Marketing and Sales Marine Operations

x Consumer awareness and x Marine navigation and access marketability x Berth, apron and terminal features x Access to consumers x GTA and parking x Fit with cruise brand philosophy x Provisioning and Security x Fit with consumer vacation x History of operations from the port / patterns destination

Logistics, Air-Sea and Shore Finance and Legal Excursions

x Landside access x Terminal charges x Airlift x Labor, fuel and other operating costs x Lodging x Regulatory issues x Shore excursions and destination x Maritime law venues Source: B&A, 2007

Marketing and sales followed by marine operations are the driving forces in cruise line decision-making. The essential concern of the marine operations group is the actual functionality of a destination and itinerary in its ability to accommodate their cruise vessels. Can the vessel maneuver into the port, complete docking operations safely at the selected pier? Are the upland facilities capable of accommodating the needs of the vessel, passengers and crew? Is the region and port safe? These and other questions are central in marine operations evaluation of a destination and itinerary. Cruise lines have different needs for port-of-call and homeport operations, and accordingly, cruise line decision-making groups focus on different attributes for each type of facility and destination for which it is a part. Similarly, a cruise terminal is a much greater element of the homeport process; terminals are generally not needed at a port-of-call as the majority of cruise passengers want direct access to the shore excursion programs via GTAs, access to taxis and public transportation or access to tourism and shopping areas. The marine/land logistics operations group will spend time reviewing and

10 While the groups have been presented in general terms; in reality and depending upon the size of the cruise line, the groups can include several departments and decision-makers as part of the overall destination and itinerary selection process. TEC Inc. 119 Ports of Sydney Master Plan November 2007

evaluating a homeport destination as to the suitability of its cruise terminal and GTA to support vessel and passenger operations. Cruise lines are also concerned with assembling destinations that are complementary to one another on an itinerary. Ideally, destinations visited need to be a balance of shopping, natural areas, cultural and historical attractions among other amenities. Destinations have a greater amount of influence on ensuring cruise tourism infrastructure meet cruise line requirements for vessel placement and the operational fit of a destination within an itinerary pattern. Through focusing on creating or improving these attributes, destinations can advance their chances of being included in an itinerary and having certain types of vessels operate from/to their port. For Sydney the primary focus of cruise operations are port-of-call logistics – the ability to serve the needs and expectations of the cruise visitor; to be moved efficiently and effectively from the vessel to shore and through a GTA that offers a safe and practical area for the movement of coaches and other forms of transportation as required to venues, sites and other locations; the movement and satisfaction of independent cruise visitors and crew to the destination and the ability to spend a reasonable amount of time in the port-of-call are all critical focus factors.

5.3.6 Successful Destination Characteristics Whether homeport or port-of-call, successful cruise destinations have two basic features in common: “Supply Side” Characteristics: Those items that attract and retain cruise lines and passengers to a destination; and, x Regional and/or international appeal as a travel/leisure destination. x Cruise tourism infrastructure needed to support vessel operations. “Demand Side” Characteristics: A market basis or strategic fit within a greater cruise ship deployment. x As outstanding a destination is in terms of cruise tourism offerings and facilities, it must fit within a greater deployment, operational and regulatory scheme to be a viable option. Sydney matches well with the demand side of the equation for cruise line deployment due to its geographic location and tourism offering inclusive of access to Fortress Louisbourg, Baddeck, Iona and the adjacent Cape Breton Island sites. There is an appeal of Nova Scotia (particularly Cape Breton Island) for both European and North American consumers as a travel destination; and the ability of the port to accommodate large vessels in the worldwide fleet are critical factors in delivering this product. Additional primary strengths of Sydney include: x Quality shore excursion offering. Sydney offers numerous excursions in many different price ranges, which meet the needs and expectations of a wide range of consumer demographics. Sydney can deliver a large portion of Cape Breton Island with the only limiting factor being the time in port. At least 8 to 10 hours are needed for a full delivery of the Cabot Trail. Most lines do not have this time

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in port due to itinerary pattern requirements related to speed and distance to other ports in the region to/from Sydney. Princess Cruises did see a lower shore excursion rating in Sydney than they would like from a port in the region; x Deepwater marine access. Sydney provides an entry channel able to accommodate the largest cruise vessels currently operating and those planned for future deployment to the region overall. The short distance from pier to international waters is also of great benefit to cruise lines allowing for lower expenses and additional flexibility in speed and distance issues involving itinerary planning; x Destination appeal. At present, Sydney provides for a secondary tier tourism offering with a low level of expectation from the cruise visitor. Overall, based on cruise line feedback, Sydney exceeds the expectation level, thus allowing for a better rating overall. While the name brand appeal of Sydney is presently low, its position along the coastline and in to the marquee ports of Halifax and Quebec City are of substantial import for future cruise operations. x Cruise infrastructure and offering. Sydney has invested in a substantial multi-use cruise terminal facility that provides for a welcome reception area, retail venue, museum and other facilities for the community. This is an excellent ISPS (International Ship and Port Facility Code) compliant cruise facility that also provides a large adjacent Ground Transportation Area. One large cruise berth is available at present along with two anchorage positions. Management of the entire cruise area with two or more large ships in the port would be challenging. While Sydney has the ability to compete with ports in the region for future cruise operations, the entirety of the region is now more competitive overall with other cruise regions worldwide for traffic, such as Alaska, Bermuda, Northern Europe and others. To achieve long-term growth the region as a whole must deliver an outstanding passenger experience, continue to develop a consumer demand for the region, and provide the cruise lines with a competitive per diem in relation to other worldwide destinations. The Ports of Sydney has one of the premiere multi-use cruise terminal facilities in Atlantic Canada. Besides a main cruise pier, the facility also provides for two additional tender landing areas in close proximity to the main GTA and terminal facility. While there are limited days thus far with more than one ship in Sydney, the operations and potential revenues associated with a ship visit are somewhat curtailed due to the tender operations. It is also an additional expense and safety concern for the cruise line. A second berth in close proximity to the existing cruise GTA would be preferred. The SYSCO facility should be considered for temporary use as a second berth for cruise vessels. Although a bulk and breakbulk terminal that is earmarked for upgrades in those roles in this Master Plan, it is conceivable that during the times when two cruise vessels are in the Port that this facility would fit the bill as a second berth to accommodate cruise ship. This site provides close access and a shuttle system can be employed to move passengers as required. A third option is the Sydport Facility on the other side of the harbour. While this can work also as a temporary back-up berth, it is not ideal due its distance from the downtown area (approximately 45-minute round trip between the dock

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and Sydney). Additionally, there are very limited to no facilities available for independent passengers and crew. Both of these options have been used in the past. Long-term, an expansion of the current dock facilities to the south, utilizing the Robin Hood Flour Building and site could provide for a unique new facility and adjacent tourism uplands area. The challenge will be to justify the facilities. More emphasis may need to be placed on the current cruise terminal and future facilities in terms of alternative uses to generate additional revenues, other than cruise. Based on Tour Operator feedback, up to 6,000 passengers can be managed at the destination on shore excursion programs. However, there is a significant challenge with motor coaches as locally Sydney has 10 coaches and additional 25 must be brought into the destination to service the cruise passengers. This problem can be further exacerbated when the Port of Halifax also has a high demand day for coaches due to cruise vessels in port. There are sufficient numbers of qualified guides to support operations. There is a shuttle service operating from the cruise terminal through the downtown area for a $5.00 fee. This is “mildly successful” and offers passengers the opportunity to visit the downtown. Sydney’s main weaknesses lay in the lack of a tourism infrastructure within the community to support independent visitor activities, retail (other than the terminal marketplace) and sites and venues in the community with a draw for visitors. Access to the entirety of Cape Breton as a tourist area is also restricted due to port time. Related to the lack of tourism infrastructure is the fact that Sydney is a secondary port in the region with low consumer demand. Table 5-7 provides a summary assessment for the potential opportunities envisioned for Sydney in terms of future cruise activities. Overall, Sydney fares well in many categories. However, the overall success of any cruise port-of-call is incumbent upon the success of marketing the destination to the cruise consumer and industry overall and then meeting the needs and expectations of the visitor over time. With an appropriate forward-thinking strategic cruise tourism plan in place the Ports of Sydney could provide many of the key elements inclusive of the marine and upland components to satisfy the cruise line appeal.

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Table 5-7 Attractiveness of Sydney vs. Cruise Line Criteria

Source: B&A, 2007

Further cruise line participation in Sydney’s effort to meet the needs of the cruise visitor will assist in ensuring continued success. Based on the preliminary assessment the following conclusions can be made: x Sydney is a solid cruise destination on the Canada & New England itinerary; x The port will continue to serve primarily as a cruise port-of-call for North American and some European cruise brands; x Expanding the tourism infrastructure and tourism offering overall is a key element in the overall delivery of Sydney as a cruise port-of-call; and, x Defining a marketing strategy that allows for more advance communication of the offerings for the Ports of Sydney and surrounds is an important element long- term.

5.4 Cruise line feedback Feedback received from cruise line decision-makers has been positive. This information, received from the questionnaires sent out to the cruise line decision-makers, was essential in formulating the analysis conclusions, projections and future strategic recommendations associated with cruise operations to the Ports of Sydney. Responses were received at a rate of 78%. The only cruise line not to provide direct input was Carnival Cruise Line, which has no cruise ships calling in Sydney at present. An overview of this feedback is provided in Appendix B, Section 3.6. The comments received from the cruise line industry indicated the Ports of Sydney fare well in most of the major categories. Many of the comments and ratings as such for Sydney are also based upon the cruise brand and consumer demographic, which requires

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different types of infrastructure destination experiences to meet the demands of the cruise consumer. By example, Seabourn Cruises prefers small ports with direct access to sites for its passengers, such as Louisbourg and Baddeck. HAL or RCI looks to accommodate their cruise vessels and passengers at larger facilities with greater capacity. Overall, the cruise line feedback provides the Ports of Sydney with a map to provide for further strategic planning and concentration in those areas where the ports require further development, while also maintaining and excelling in those areas, such as tourism venues, where the destination fares well.

5.5 Sydney Cruise Growth Opportunities

This section examines the potential future cruise passenger and vessel throughput for the Ports of Sydney based on current knowledge of the region overall and historical data collected during the study. This projection base can assist the Ports of Sydney in determining future requirements for physical infrastructure in relation to berth requirements, anchorage needs, ground transportation and supporting upland tourism infrastructure.

5.5.1 General Approach to Forecast Preparation – Growth Scenarios From information assembled as part of the 2007 Market Study (Appendix B), three general scenarios were assembled that reflect the most likely assumptions for growth for Sydney over the study period (2030). These are: x Approach A - Natural Growth (Baseline plus 5-year average of Atlantic Canada and Sydney Cruise Growth). Under this scenario, cruise passenger and vessel volumes expand within the limits of Sydney’s present cruise offer. Local and Provincial Government as well as regional stakeholders take little or no role in the expansion or implementation of cruise tourism improvements or expansion to existing marine or upland facilities. Thus, cruise operations continue to occur primarily due to the availability of operators in the region, the notoriety of Sydney as a desirable secondary place to conduct cruise call operations, the availability of cruise facilities to accommodate traffic and other similar factors. x Approach B – Regional Market Capture of Sydney. Approach B looks at the historical and projected future capture rates of Sydney in conjunction with the overall throughput envisioned for the region. Sydney’s growth is specifically tied to the capture rate in the regional marketplace. This Approach contemplates the expansion of Sydney’s cruise passenger throughput based on low to high capture rates over the study period. x Approach C – Expansion of Cruise operations on Scenario-based projections. Under this growth scenario, Sydney focuses on growing its cruise capacity by expanding its potential cruise operations. Approach C considers all of the relevant scenarios presented under the Approach A Natural Growth and Approach B scenario, and also adds vessels into the region based on interviews with cruise line operators and knowledge of the region. This Approach also

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further grows the seasonality of Sydney through the moderate development of cruise operations in the summer season.

5.5.2 Projections Overview Based on an assessment of the berth demand required to support cruise operations long- term (through 2030), a total of necessary accommodations for the Ports of Sydney can be established. The complete analysis is provided in Appendix B and summarized below: x Cruise passenger volumes under Approach A - Natural Growth scenario are envisioned to increase to between 216,839 (low) and 259,700 (high) passengers by 2030. Similarly, vessel calls are forecasted to be between 83 (low) and 99 (high) calls in 2030; x Under Approach B, cruise passenger throughput expands from approximately 86,000 passengers in 2008 to between 127,348 (low) and 183,697 (high) passengers by 2030. Cruise calls reach between 49 (low) to 70 (high) in 2030; and, x Under Approach C, cruise passenger throughput expands to between 165,590 (low) and 265,894 (high) passengers by 2030. Cruises increase to 63 (low) to 102 (high) based on the projection models. Each of the three approaches described above are not mutually exclusive. For example, it is likely that progress toward Approach B will help bring about more realistic market viability for Approach C and additional vessel placement in the region, specifically Sydney. Growth for Sydney will also depend to some degree on cruise vessel capacity. Based on the newbuild order vessel trends and regional cruise vessel capacity growth, this is an area that will continue to influence the tourism operations in most ports in the Atlantic Canada region. Vessels are continuing to increase in passenger capacity affecting the volume of cruise passengers in port at a given call date and reducing to some degree overall the actual total number of cruise calls to most ports, particularly those with passenger throughput counts of less than 500,000-passengers and destinations that may not be considered of marquee value.

5.6 Ports of Sydney Future Traffic Analysis Part of the process in accurately identifying long-term berth demand is to develop an understanding of the traffic patterns to the port or facilities in question. In the case of Sydney, there is a defined seasonal, monthly and daily traffic pattern that emerges through analyzing the historical traffic data as outlined in section 5.3.2. The drivers associated with the Sydney traffic patterns are inclusive of regional cruise market sector seasonality, profitability and competition from cruise regions throughout the year based on the same factors. In this context, the traffic analysis for Sydney was assembled with a primary emphasis on the potential for future berth development. Based on the traffic evaluation the following factors have been identified:

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x Seasonal and monthly traffic patterns are primarily driven by the fall foliage season with a focus on September and October. A secondary factor is the shoulder season redeployment of vessels from the European cruise patterns to those in North America, primarily the Caribbean region. x All of the models envision some level of growth over the period with ranges from 48,000 to 56,000-passengers in the peak month in 2013; 75,000 to 77,000- passengers in the peak month in 2023; and between 85,000 to 95,000-throughput passengers during the peak month in 2030. Overall, on a percentage basis, September (40.84%) and October (40.01%) continue to be the peak months for the Sydney model. x Sydney, as with the entire region has a distinct seasonality for cruise tourism. To a great degree the success of Sydney as a cruise tourism destination is very much linked to the fall foliage identity. Changing cruise patterns that may predominantly utilize Sydney during the peak summer months are unlikely and may provide a negative impact on the destination’s appeal long-term if the destination itself is not prepared to service the needs of the cruise visitor during this time. Providing for a limited cruise guest satisfaction over time is possible, if expansion of upland and tourism infrastructure is not incorporated to meet demand. Based on the analysis of future seasonal, monthly and daily traffic patterns in Sydney (see Appendix B), and the Facilities Demand Analysis, the following conclusions have been formulated: x Future passenger growth is dependent to a small degree on the addition of a berth and strategic planning to entice and support cruise lines in the region and operations to Sydney. This is a supply led industry both in terms of cruise vessels spurring demand and the need for additional tourism infrastructure in a region to assist with growth; x Sydney will have the demand for 2 berths by approximately 2012. Based on market demand Sydney may require an additional anchorage(s) if it wants to meet the needs of the cruise industry with their long-term deployments; x Regional cruise growth and Sydney cruise expansion offer some level of social and economic opportunities. However, Sydney must determine to what extent they wish to support cruise tourism using the limited infrastructure available at the Port and within the community of Sydney at present. One of the keys to growth for the region and ports is who has the capacity to expand cruise facilities and tourism infrastructure and product offers. Thus, Sydney has an opportunity to capture additional deployments with new cruise infrastructure in place. Based on the projection approaches, newbuilding trends and deployment strategies of the cruise industry the development of a second berth in Sydney to accommodate Super post- Panamax vessels is likely not mandatory within the next 5- to 10-years. However, if a berth able to support vessels of more than 130,000-GT and more than 3,000-passengers could be provided to the cruise industry within the next 2 to 3 years, this may provide a platform for additional cruise growth for Sydney. TEC Inc. 126 Ports of Sydney Master Plan November 2007

5.7 Sydney Strategies for Cruise Growth and Service

5.7.1 Overview As part of the Ports of Sydney Master Plan, a cruise review process was undertaken to offer recommended management, operations and development action items to assist the Ports of Sydney in addressing hardware and software issues related to cruise tourism. Recommendations presented herein were derived from results assembled as part of this study as well as cruise line and other project stakeholder feedback. Strategies and action items were also derived from the Consultant Team’s direct experience with developing cruise port-of-call business in destinations and ports worldwide. A strategic plan was prepared specifically identifying recommendations related to cruise operations based on the background discussion, observations and insight into the recommendations contemplated presented in the previous sections. This plan is presented in detail in Appendix B. Strategies and action items for development of cruise operations to the Atlantic Canada region, specifically Sydney, are grouped into three categories: x Hardware. Strategies and action items to ensure that appropriate capital improvements are planned and developed to meet anticipated cruise industry throughput and facilities needs. x Operations. Functional enhancements that allow for improved cruise operations. x Software. Programs and marketing efforts developed to ensure product quality, brand recognition, communication efforts and other tourism support topics. While each of the above groups is described separately, there is significant interrelationship between specific action items identified for each. Where needed, the “critical path” of several of these items was identified to allow for an improved understanding of these relationships. Recommendations and approaches under each of the above categories are divided into three time frames specified. These categories include: x Short Term (2008 -11). Those improvements designed to see immediate results and set the stage for future phase actions. x Medium Term (2012 - 2014). Intermediate term projects that grow from the foundation created under early phased work to help achieve a long-term vision. x Long Term (beyond 2015). Projects whose realization results in the achievement and maintenance of the long term vision and ultimate goal(s).

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6.0 Facility Requirements, Current Capacity and Potential Development Needs

6.1 Facility Requirements Needed to Meet Market Opportunities

One of the overall objectives of this Master Plan has been to develop a facilities development plan that positions the Sydney region to be successful in reaching the overall potential of Sydney Harbour while at the same time accommodating the business plans and interests of the individual property owners.

A set of evaluation criteria was identified in the Master Plan process to assist in evaluating each possible developmental concept. These criteria include:

x Should be compatible with owner’s business plans; x Should improve jobs and tax revenues; x Should be compatible with adjacent land uses; x Should be environmentally sound and minimize environmental risk (short term and long term); x Should have community support; x Should be sound operationally (security, other services) issues; x Should be cost effective (capital, operating, schedule for development); and x Should be compliant with regulations.

As discussed in Section 4.0, Sydney Harbour has the potential to develop and capture cargo opportunities in each of several major cargo categories, namely: x containers, x bulk; i.e., Coal, x breakbulk (including project cargo) and x possibly autos.

(Note: the opportunities and developments in the cruise market have been discussed in section 5.0 of this report.)

Cargo flow through the Ports of Sydney will not just happen. In order to attract waterborne cargo, a coordinated marketing effort must be made to identify and attract potential cargoes to Sydney and the appropriate facilities must either be in place within Sydney Harbour or be capable of being developed.

The following provides a summary of the various cargo opportunities along with the basic facility requirements needed to handle each type of cargo or commodity, along with our recommendations on specific terminal development alternatives.

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6.1.1 Containers

The potential exists for Sydney to have a “best-in-class” container terminal in the immediate near future. To summarize this unique market opportunity, Sydney has all the physical attributes needed to meet the location requirements that are becoming increasingly important to the world’s container shipping industry. Namely, a well protected, deep-water Harbour and rail access to allow for unrestricted access to the North American mid-west markets.

Essentially, Sydney Harbour can serve as the first “Port of Call” in the North Atlantic with an existing rail connection that will allow for the development of a highly efficient “Intermodal” rail connection to inland North America mid-west destinations. Such a location will be critical to container shipping lines that are beginning to utilize larger vessels and implementing a “Suez Service” that provides around the world shipping from Asia to Europe and North America, utilizing the Suez Canal. These shipping lines are actively looking for new facilities that are capable of handling these larger vessels (330 m in length with a draught of -16 m) and can provide a quick and efficient connection to rail.

The minimum landside and navigational facilities required for a container terminal capable of serving these newer, larger container vessels (10,000 – 12,000 TEU capacity) would be: x Berths: two berths to start (a total length of 750 m – 850 m), with expansion capability to at least four berths, resulting in a total wharf length of 1,500 m to 1,600 m. x Backland Terminal – 25 acre minimum per berth for container storage, so with four berths, the container storage area would require a minimum of 100 acres. x On-Dock “Intermodal Container Transfer facility” (ICTF), meaning that the containers can be easily and efficiently transferred from the vessels to a rail car loading area adjacent to the container storage area. x Direct rail service to/from marine terminal, with the capacity to service 10,000 to 12,000 ft long unit trains. Because of the length of the unit trains that would be created at such a terminal, locations that allow for minimum disruption to local street traffic are desirable.

Assuming “normal” dwell times (i.e., the time that containers are stored at the terminal) and an operational plan for the Container Yard that uses Rubber Tired Gantries (RTGs), the throughput capacity of such a terminal would be approximately 350 to 400,000 TEUs per year per berth. A four-berth terminal complex would have the capacity to handle over 1.4 to 1.5 million TEUs per year.

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6.1.2 Bulk (Coal)

There are also some near-term bulk cargo opportunities that exist for Sydney Harbour, most particularly the potential to handle export coal from the proposed Xstrata Coal operations from the nearby Donkin Mines. Annual throughput estimates for the Xstrata operations are anticipated to reach 4 to 5 million tonnes per year over the next few years.

Again, a critical advantage to this market segment is Sydney’s rail connectivity options, which is viewed in the market as a true competitive advantage. Rail will become increasingly important to being able to attract future bulk cargo movements to Sydney Harbour.

That said, Sydney’s ability to handle any future sizable bulk cargo movements will be contingent on several factors:

x The ability to accommodate a minimum 125,000 DWT bulk carrier, requiring an access channel of at least 17 m of water depth; x The ability to store 300,000 MT (metric tonnes) or more of coal on-site; x The ability to be environmentally compatible with adjacent land owners and uses, including finding ways to mitigate: o Dust emissions and other air quality issues; and o Other neighborhood impacts

The basic facility requirements needed to handle the projected 4 to 5 million tonnes of coal per year would include: x A channel and berth to accommodate a 125,000 DWT Bulk Vessel: (LOA – 275 m, with a Draught of – 16.5 m); (Note larger vessels are available, but would require even deeper navigational channels and could have access restrictions at receiving terminals, so the 125,000 DWT vessel is considered the maximum that might call at Sydney.) x One (1) berth with 5,000 tonne/hr ship loader capacity. (Note: exporting 4 mil tonnes/yr will only require 2-3 vessel loads per month, so a single berth is considered adequate.); x A terminal area of approximately 60 acres, with 300,000 tonnes storage capacity (2 vessel loads) o Land area required for terminal operation – 20 acres for stockpiles o Additional 40 acre for rail and ancillary operations x Direct Rail access from mines

6.1.3 Autos

The market opportunity for Autos to be imported into Sydney is very much dependent upon CN’s continued use of their existing Dartmouth Auto Port facility located near Halifax. There are some existing neighborhood issues associated with the Dartmouth

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facility, but none that would indicate that CN has any intentions to, or requirements for, relocating the existing auto terminal.

However, if Autos could be attracted to Sydney, there are several existing facilities that have the capacity to serve as an Auto receiving terminal. The basic facility requirements for such a terminal are: x A facility with the capability to handle a typical auto carrier that transports 6500 units, has a length (LOA) of 210m, and a draught of 11.7m; x A single berth is required, however, a second could provide some flexibility to the various auto shippers; x A first point of rest area for a single vessel load (say 6 acres located near the berth); x A 70 acre open storage/processing area capable of processing 140,000 units per year; and x Rail access to the site that allows the loading of tri-level auto cars carriers.

It should be noted that an auto terminal can not be located near a bulk coal facility as the coal dust generated by the coal terminal is not compatible with an auto operation. The two types of facilities should be separated by an adequate distance so that the coal dust will not impact the auto processing.

6.1.4 Break Bulk and/or Project Cargo

There is a great degree of potential for Sydney to be able to attract various Break Bulk or Project Cargo. Break Bulk is cargo that is shipped in “smaller” units (bags, pallets, etc.) that can be “broken apart” and include commodities include such items as steel, forest products (including pulp) and bagged products. Project Cargo is a category of cargo that indicates it is a unique shipload of cargo destined for a specific project or location, and can include various rolling cargo (like construction equipment), machinery, or specially shipped products, such as the recent “windmills” handled at the PEV leased docks.

The reasons for shippers to choose Sydney is very similar to the reasons that make it an excellent candidate to attract containers. Namely, Sydney would be the first port-of-call in the North Atlantic with rail access to inland Canada and the mid-west of the U.S.

A similar opportunity for such a break-bulk terminal would possibly be as a transfer terminal for the exchange of cargoes from ocean-going vessels to or from “Lakers”. Lakers are a type of vessel that have been designed and built exclusively for the Great Lakes and St. Lawrence Seaway ports system. These vessels have limited ability to travel in deeper, open ocean shipping channels. Since most ocean going cargo vessels have deeper draught requirements that prohibit them from using the Seaway, Sydney might be an idea location to be able to “trans-load” cargoes going to or from the Great lakes to Europe or Asia. Especially in today’s market, the cost of chartering general cargo “freighters” could be more than the cost of such a trans-load operation. Hence, the ability to transfer these cargoes at Sydney might very well be cost effective to the various

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shippers. However, it is likely that this business will need to be developed on a parcel-by- parcel basis. Being able to provide shippers with competitive total shipping costs (including vessel costs, cargo handling and storage) on a delivered cost-per-ton basis will become imperative to attracting this market.

The facility requirements for a break-bulk, general cargo type of terminal would be:

x The ability to dock 30,000 – 35,000 DWT general cargo vessels (199 m in length, with a draught of -12 m); x A wharf length of a minimum of 450 to 500 m to allow for berthing two vessels simultaneously; x Storage areas that include: o An open storage area for at least a ship’s load of cargo, say 35,000 tones of cargo, estimated to be approximately 25 acres; and o A warehouse or transit shed to be able to store weather sensitive cargoes, such as paper products, pulp and other cargoes that need protection from the elements (see Figure 6-1). x Most general cargo ships come equipped with their own “ship’s gear” cranes, but the ability to have a mobile Harbour crane on the dock to facilitate the loading and unloading of the cargo would give Sydney another competitive advantage.

Figure 6-1 Warehouse Handling Breakbulk/Neobulk Products

6.2 Proposed Development Options and Opportunities Prior to identifying specific development projects that would enable Sydney Harbour to be able to attract and service the various cargo opportunities, the physical attributes of each of the potential development sites have been reviewed and compared with those facility requirements needed to serve each of the potential cargoes.

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The existing marine terminals and developmental sites in the harbour are summarized in Table 6-1.

Table 6-1 Existing Terminal Assets Terminal International Atlantic Canada Marine Syport Sydney Marine Coal Pier Bulk Terminal Atlantic Marine Terminal Owner Emera Utility Sysco (Provincial Transport Laurentian Cape Breton Services Inc. Government) Canada Energy Group Regional Municipality Operator Logistec P.E.V Marine Atlantic Sydport Sydney Ports Corp Cargo Coal Misc. bulk (coal Ferry Service Current terminal Cruise and and slag); some between Nova berths serve as Passenger Service breakbulk and Scotia and transient project cargo Newfoundland; berthing; Future ro/ro service - plans include 86,000 development of commercial container units (2005) terminal Total Acreage 50 acres 100 acres 11.7 acres 200 acres 10.8 acres existing Industrial Park; 450 acres undeveloped Berth/Wharf 180 m – bulk 357 m (250 PSF Passenger berth: 1370 m of wharf 275 m Wharf loading berth, design - heavy 212 m Cargo structure on (with possibility good condition dock capacity) freighter berth: several berthing for 120-150m 240 m Third piers, some in berth expansion Wharf: 150 m questionable and install Very good conditions, with dolphin) condition derelict vessels Water Depth 15 m at berth, but 12.7 m 10 m 6 - 10 m at berth 12 m at berth limited to 11.2 m channel Max vessel Panamax Coal 35,000 DWT cargo 1200 pax Ferry Smaller cargo 300 m cruise Vessels (50,000 vessel; (179 m LOA) vessels vessel DWT) and Laker Panamax Bulk (15-20,000 Vessel Coal Carrier DWT) (50,000 DWT) and Lakers Buildings Electric MCC N/A Terminal Warehouses, Cruise Pavilion bldg & small building, metal (75 m x 30 m) office administration fabrication, building and painting/sandbla maintenance sting, truck and shop equipment repair (sizes 1,100 to 4,000 m2)

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Terminal International Atlantic Canada Marine Syport Sydney Marine Coal Pier Bulk Terminal Atlantic Marine Terminal Rail Rail loop with 5 tracks (approx. none Onsite rail spur Rail access parallel lines 250 m each); one with 3 sidings requires beginning just marshalling yard, connected to upgrading to be outside loop; with secondary CBNS and CN functional; sidings on located at CBNS rail network (2 marshalling yard adjacent rail lines rail yard. km total) within 1 km have capacity; 2-3 trains per day Roads 200 m from Within 1 km of direct highway Good purpose- Nearest highway nearest nearest highway access built access road within one km; highway1300 t/h from highway Functional truck entrance gate, but loading/unloading has a steeper station grade than desirable Equipment receiving hoppers 2 - 50m stack belts; 1- Bi-level Currently, Currently, shore at berth conveyed loaders, trucks and ramp, equipment cranes and to range conveyor cranes are 1-single level engaged as forklifts leased (300 t/h); front- currently leased ramp required end loaders; stackers

6.2.1 Facility/Cargo Type Opportunities

The analysis of the current asset base for each of the potential development sites gives a basis for identifying those properties that are best suited to be developed for each potential cargo type. The table below gives an overview as to the potential for each existing Sydney marine cargo site to serve the various major cargo market opportunities identified. From a market adaptability standpoint, the Sysco/PEV Atlantic Canada Bulk Terminal facility has the most immediate potential to capture a variety of future cargo opportunities as it has an existing general cargo wharf, open storage and handling space with rail access; a valuable set of assets.

The table below gives an overview as to the current and potential assets for each marine site relative to the likely market/facility requirements for the various potential cargo types. No site currently has all of the required facilities needed to be able to fully provide the terminal requirements identified for the various potential markets without some improvements. However, each of the existing sites seem to be well positioned to expand their facilities to be able to provide the requirements needed to better capture various cargo opportunities.

The analysis of the potential of each site is provided in Table 6-2.

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Table 6-2 Potential for Development by Site and Cargo Type

Facility/Site Container Bulk Breakbulk Other

Existing Coal Restricted Terminal can be space for Restricted International Coal Not Suitable expanded with breakbulk storage space for other Pier new berth and plus new marginal cargoes. larger stock plies wharf required. Some limited potential, but Good site for bulk Best Suited for Limited for Autos, berth length shipments, Break Bulk if coal piles are inadequate for currently loading because of rail near. Could serve SYSCO/PEV larger vessels and coal and slag. Can access and as auxiliary shape of property be expanded for available storage Passenger or and rail access larger coal export space. Cruise Berth limiting for containers Primary role as Passenger terminal, can Marine Atlantic Not Suitable Not Suitable Secondary handle some roll- roll Cargo Some Potential to Primary Sydney Marine use open space Passenger Not Suitable Not Suitable Terminal and adjacent site Terminal, serving for Breakbulk cruise industry. Best Potential for Potential for Limited, for Break Bulk with Project Sydport Industrial Park containers Unlikely reconfigured Cargo w/ good Piers because of wharf with rail rail access existing facilities access and storage Very Probable x Access to Deep Water; Possible location Possible, but Sydport Size/Shape of for new bulk better existing Greenfield Site x Parcel; terminal sites are available x Good Rail Access

- Highlighted cells represent highly probable cargo opportunities use for each site,

Based on this evaluation of the assets, facilities and current business operations at each of the potential marine terminal sites, coupled with the facility and operational requirements of each cargo type, the following sites have been identified as the ones that best meet both the physical and operational requirements for the various cargo types:

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x Bulk Cargoes: International Coal Terminal; SYSCO/PEV x Breakbulk Cargoes: SYSCO/PEV; Sydport Industrial Park Piers x Container: Sydport Greenfield Site x Passenger: Sydney Marine Terminal; Marine Atlantic

6.2.2 Container Opportunities The Sydport Greenfield site appears to be the best site in the Harbour to develop a modern, state-of-the-art container complex that would be required to attract major international shipping lines. The combination of unrestricted rail access, ease of construction, size of parcel and the ability to have over 1500 m of berthing with a depth of at least -16 m, this site provides a unique opportunity to develop such a terminal within Sydney Harbour. Such a facility will have the ability to handle trans-shipment cargoes, but the primary focus will be to deliver cargo to/from the Heartland Market in the interior U.S. and Canada (Figure 6-2). A variety of possible commercial initiatives exist for the establishment of such a facility, especially in light of the recent worldwide equity market activity for container facilities. Potential development teams for such a large undertaking might include any combination of: terminal operator(s), equity market participants or ocean carriers. Figure 6-2 CN Intermodal Routes Access Major Markets

6.2.3 Bulk Coal Opportunities Both the existing International Coal Terminal and the Atlantic Canada Bulk Terminal (the Sysco/PEV Site) have the potential to be developed into a major coal exporting terminal. The best technical location (subject to more intensive environmental studies and evaluations) to expand the coal stockpiles to allow for the storage of at least 1 to 2 ship- loads of coal would be on the Sysco leased land located directly between the two sites. A stockpile at this location could serve both bulk terminals.

The International Coal Pier has a berthing structure that includes a ship loader/unloader system and could better handle the larger, pure bulk vessels because of its deeper water.

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The ACBT traditionally relies on self unloading/loading vessels and some equipment and berth structure improvements would be required to provide a state-of-the art ship-loading system.

A critical advantage of both sites is the existing rail systems that serve both terminals that can be expanded to provide rail service to the potential stockpile locations.

Should a container terminal not be developed on Sydport’s Greenfield site, there is the potential to accommodate a significant bulk market sector at the facility, as available land for storage, water depth and rail access are the keys to the success of any bulk terminal.

6.2.4 Break Bulk and Project Cargo Opportunities:

Both the existing Atlantic Canada Bulk Terminal and the existing Sydport Industrial Park wharves are potential candidates to be developed as a break bulk/ project cargo/ general cargo terminal. The basic requirements for these terminals include berthing facilities for smaller general cargo vessels, good rail access to the terminal, a marginal wharf (e.g., a straight wharf structure with backland storage immediately behind the wharf structure, rater than a pier type arrangement with a lineal structure protruding from the storage area.)

These basic facilities are mostly in place at the ACBT location, only some minor site improvements and storage construction would be required. (The condition of the wharf structure would determine if any structure modifications to the wharf might be needed.)

The existing piers and wharf structures at the Sydport Industrial Park location appear to be in somewhat poorer condition. However, with some reconfiguration and rehabilitation, this waterfront terminal will also have the ability to develop into a general cargo type terminal.

There is also possibility to expand the break bulk/general cargo operations at the Sydney Marine Terminal. There is some storage space for general cargo located adjacent to the cruise pavilion and the existing wharf structure provides an adequate berth for general cargo vessels. However, there currently is no rail to the site and the rehabilitation/development of rail via the adjacent property, while possible, appears to be problematic. With the other potential general cargo terminals available, the development of the Sydney Marine Terminal should be first focused on the expansion and development of its core activity: the cruise market.

6.2.5 Other Opportunities

The other opportunities evaluated included passenger opportunities (both cruise and ferry) and the potential to develop an auto terminal within the harbour. Both the Sydney Marine Terminal and Marine Atlantic’s facilities currently serve the passenger market,

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SMT as the region’s cruise terminal and Marine Atlantic serving the Government’s ferry service to Newfoundland. Both these activities seem to have adequate facilities to meet the current demand and will be implementing, or are planning, various types of improvements to meet future demand.

6.3 Identified Development Projects

Based on the above analysis, the following specific developmental projects have been identified to enhance the future growth of commercial cargo within the Ports of Sydney.

6.3.1 Expand the International Coal Terminal

The International Coal Terminal is currently operating as an import coal facility. In order to serve as an export terminal for the potential Xstrata Coal operations, the facility will need to be developed as a larger coal facility to handle 4 to 5 million tonnes of coal export per year. The future growth/potential of this facility is linked to the successful expansion into adjacent property owned by the provincial Government and leased as part of the Harbourside development program. It is also recommended that the existing berth is either upgraded (would require berth and channel access dredging) or relocated, to accommodate the larger vessels anticipated in the future. The new berth would need to be able to accommodate a minimum 125,000 DWT coal carrier, with a water depth at the berth of -16.5 m. To achieve this berth depth, some additional dredging would be required, even if the berth were to be relocated to deeper water.

Expansion possibilities are focused on developing a larger bulk coal handling terminal capable of handling the future requirements.

Project details are shown in Figure 6-3 and 6-3a. (Note: Option 1 is to dredge the berth at its current location; Option1a is to relocate the berth to deeper water.)

Design Capacity of new Terminal: 4 – 5 million tonnes per year; Design vessel – 125,000 DWT Bulk Carrier; Project Elements:

x New Ship Loader and Marine Supports; x Enlarged and expanded stockpile area x Ancillary equipment and site improvements;

Total Estimated Development Costs, including Equipment: $52 million11

11 All estimated costs are Canadian dollars, based on $1.00 U.S. to $l.016 Canadian (November 20, 2007). TEC Inc. 138 Fi 6 3 D l t Pl I t ti l C l T i l O ti 1 Figure 6-3 Development Plan-International Coal Terminal Option 1

Fi 6 3 D l t Pl I t ti l C l T i l O ti 2 Ports of Sydney Master Plan November 2007

6.3.2 Make Improvements to Atlantic Canada Bulk Terminal for Breakbulk and Bulk Export

The Atlantic Canada Bulk Terminal facilities currently handles both bulk and breakbulk cargoes. In the past few years, the terminal has handled coal, slag, scrap metals, and project cargoes. In order for the ACBT to be more attractive to breakbulk cargoes, the terminal would need to improve its storage areas, with the possibility of constructing a small warehouse or transit shed.

The general cargo facilities at ACBT provide the best opportunity within the harbour to be developed into a major break bulk and project cargo terminal. The wharf improvements would include general site improvements to improve rail access to the site, repaving terminal storage areas, and building a 6,000 m2 storage building. Use of this facility as an auxiliary peak terminal for cruise ships should also be considered in the improvement schemes for this site. A separate and well kept portion of the site for visiting passengers to load and unload to buses would be appropriate and would enhance the facility’s utilization as a multi-use marine terminal.

Likely cargoes that could be handled at this type of terminal include: Steel, Forest Products; Project (including heavy-lift), Ro/Ro; Machinery; All bulk cargoes (assumes that appropriate facilities can be constructed) and Autos (if Coal is relocated, some concerns with Slag Pile dust).

Expansion possibilities include developing a bulk coal exporting terminal capable of handling the future requirements. Coal export capabilities would require the addition of coal export and ship loading conveyors and a traveling ship loader with a reach for Panamax vessels. Deepening the alongside berth depths access to the main channel is also a possibility but is not included in this base scenario.

Design Capacity of New Terminal: 400-500,000 tonnes per year (assuming 1 to 2 vessel calls per month); 4-5 million tonnes of coal export Design vessel – 60,000 DWT Panamax Bulk Carrier;

Project Elements: x Rehabilitate existing wharf structure, if required; x Improve paved storage areas and construct storage building; x Improve the existing on-dock rail; x Purchase new Mobile Harbour Crane x Coal export and ship loader conveyors x Transfer towers x Traveling ship loader

Project details are shown in Figure 6-4. Total Estimated Development Costs, including Equipment: $35 million

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An option for this marine terminal would be to more exclusively dedicate its use as a coal export facility. The concept would expand upon the illustration provided in Figure 6-4 by deepening the water depths alongside the wharf and from the wharf face out to the main channel where 17 m is available. It is estimated from existing navigation charts that the wharf face is approximately 600 m from the 17 m contour in the main channel. Therefore, it is estimated that approximately 300,000 cubic meters of new dredging and dredge material disposal would be needed in this option. Additionally, the increased depth alongside this marginal wharf would require inspection and, most likely, rehabilitation to ensure structural integrity. Other development costs for this option would be the procurement of larger shiploading equipment and a dedicated/upgraded coal stockpile area. This latter stockpile area is also included in the development costs for the International Coal Piers.

Project elements: Option for 125,000 DWT Bulk Carriers:

x Same development costs a base scenario, plus the following: x Dredging of approximately 300,000 cubic meters for berth and access to channel to 17 m x Additional wharf rehabilitation of increase depth alongside x Designated and upgraded stockpile area (also depicted in International Coal Pier estimate) x Shiploader for 125,000 DWT bulk carrier

Total Estimated Development Cost for Option: $55 million

6.3.3 Upgrade Existing Facilities at Marine Atlantic Terminal:

The Marine Atlantic Terminal has limited potential to attract future cargoes outside of the scope of its core operation (ro/ro ferry service). While some general cargo could be carried on vessels (outside of current ro/ro operation) it is unlikely to occur. Current improvement projects in Fiscal Year 2007-2008 include: x Gulfspan Dock fendering upgrades x Security fencing x Addition of a second level ramp on the Alternate Dock

The second level ramp will allow two vessels to be loaded and unloaded at the same time. With the present one ramp arrangement, the Atlantic Freighter and Caribou can only load their lower deck at the Alternate Dock and must move to the Gulfspan dock to load the upper deck. The Smallwood and Ericson have internal ramps and can therefore load both decks at the Alternate Dock. The plan for Marine Atlantic is shown in Figure 6-5.

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6.3.4 Develop Break Bulk/General Cargo Terminal at Sydport Industrial Park Piers

The existing Sydport Industrial Park has over 1300 m of existing wharfs and piers, however, most are in poor condition. This existing berthing complex could be rehabilitated and developed for breakbulk or autos. The adjacent open space/warehouse areas could be developed (constructed) to meet cargo demands. Likely cargoes include the same range of breakbulk and project cargoes as projected for the Atlantic Canada Bulk Terminal.

This existing waterfront is currently underutilized and has several derelict vessels berthed alongside the piers.

The proposed plan, as shown on Figure 6-6, would include: x Demolition of the existing outward pier structure; x Construction of a new 572 m long marginal wharf; x Dredging to allow for -12.5 m depth at the berth; x 4-5 acres of new landfill developed behind the wharf; x Reconstruction of landside storage areas; x Development of new 6,000 m2 transit shed/warehouse; x Improvements to rail sidings to terminal area; x New equipment, including mobile harbour crane.

The total estimated construction cost of these terminal improvements would be: $42.5 million. A detailed cost estimate is provided in Appendix C.

The terminal would be designed for a 35,000 DWT general cargo vessel and the anticipated capacity of the terminal would be 400,000 to 500,000 tonnes per year, based on 1 to 2 vessel calls per month.

TEC Inc 143 (This page intentionally left blank) Figure 6-4 Development Plan-Atlantic Canada Bulk Terminal Figure 6 5 Development Plan Marine Atlantic Terminal Figure 6-6 Development Plan-Sydport Breakbulk Terminal (This page intentionally left blank) Ports of Sydney Master Plan November 2007

6.3.5 Develop New Container Complex on Sydport Greenfield Site

The Sydport Greenfield site consists of 450 acres of undeveloped land adjacent to the Industrial Park, on the South Arm of Sydney Harbour, directly across the channel from the Atlantic Canada Bulk Terminal. This property presents a unique opportunity for the expansion of maritime shipping in Sydney Harbour. The site is located on the waterfront, is relatively flat and has access to deep water in the nearby channel. This Greenfield site has direct rail access to the site that could readily be extended from the Sydport Industrial Park. This rail provides a long haul link to the Midwest that does not need to travel directly through the urban areas of Sydney. This contrasts with the rail lines from the sites located along the eastern shore of the South Arm where Midwest destinations would require moving trains along lines that pass through downtown Sydney. To enhance the rail connectivity advantage, Sydport has obtained an ownership option for 1,200 acres located along the existing rail line due south of the Industrial Park. This land is critical to the intermodal concept of large container ships and long trains to move international containers from Sydney to Midwest destinations. The 1,200 acre option preserves the land for rail transportation purposes and also reserves the site for future development as a separate rail handling and storage yard.

These attributes make this site an ideal location to develop a state-of-the-art container terminal. As presented in the Market Opportunities section of this report, as the container vessels increase in size, the international liner shipping companies are looking for locations to construct and operate highly-efficient container transfer terminals. The Sydport Greenfield site could be readily developed into such a terminal. Figure 6-7 illustrates a rendering of a container terminal.

Figure 6-7 Renderings Depicting Potential Container Terminal Designs

Figure 6-8 shows the details of a possible development plan for such a terminal. It would include:

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x A new wharf 1,500 m long; allowing for 4 berths, serviced by 8 large ship-to- shore gantry cranes; x A berth depth of -16 m; x 100 acres of new container terminal storage area, some of which would be built on new land created by filling near shore areas; x Near shore fill areas would incorporate dredged material from the channel that is suitable for structural support thus acting as Confined Disposal Facility (CDF) for the placement of dredged material; x A rail, intermodal transfer facility ; x Administrative buildings; x Off-site rail and road improvements to the site.

Such a project would be built in phases, with the first two berths constructed in Phase 1 and the full four-berth complex being completed with a Phase 2 as business grows.

Estimated construction cost of this terminal would be:

x Phase 1 construction - $114 million x Phase 1 equipment - $49 million x Total Phase 1 - $163 million

x Phase 2 construction - $90 million x Phase 2 equipment - $49 x Total Phase 2 - $139 million

x Total Container Terminal Costs - $302 million

TEC Inc 148 Figure 6-8 Development Plan-Container Terminal (This page intentionally left blank) Ports of Sydney Master Plan November 2007

6.3.6 Sydney Marine Terminal

The Sydney Marine Terminal serves primarily as the region’s Cruise Terminal. This facility has limited potential for other types of cargo given its constricted current lay- down area, in town location and limited rail access. There are existing waterfront properties to the north and south of the existing terminal that although not currently available, would make excellent sites for cruise ship/tourist related development. The existing site has 3-4 acres of open storage area that can be used for laydown of breakbulk cargoes, if needed.

The ability to develop a general cargo complex is limited because of both the size of the terminal and the lack of rail service. While the property immediately north of the terminal did have rail to it at one time, being able to reconstruct the rail would be problematic and rather expensive.

The best use for the terminal and adjacent property is to allow the terminal to grow to serve cruise and other passenger needs. The existing berthing wharf can be expanded to allow for the berthing of a second vessel by incorporating a mooring dolphin system. This would expand the berthing area by 145 m and allow for smaller cruise vessels or Coast Guard Cutters to dock at the terminal. The best use of the adjacent properties would be to develop a ‘cruise” orientated Nova Scotia “village” that would help to attract and increase the terminals passenger and cruise business.

Conceptual plans for such an expanded dolphin mooring system are shown on Figure 6-9. A long term concept for the terminal is depicted in Figure 6-10. In this latter concept, an approximate 300 m length pile supported dock would be extended at an angle from the north end of the existing marginal wharf. In this way, two 900 ft cruise ships could be accommodated at the terminal. The dolphin system is estimated to cost $850,000; the long term pile supported dock with some dredging is estimated to cost $14 million.

TEC Inc 150 (This page intentionally left blank) Figure 6-9 Development Plan-Sydney Marine Terminal Figure 6-10 Future Expansion Plan-Sydney Marine Terminal Ports of Sydney Master Plan November 2007

6.3.7 Deepen the Main Harbour Navigation Channel to -17 Meters

The most critical project recommended by this Master Plan is the deepening of the outer portion of the main harbour navigation channel to a depth of -17 m. As discussed in several places in this plan, the anticipated cargo vessels that will be attracted to Sydney Harbour are getting bigger. The new container ships that would be expected to call at the Sydport Container Terminal will have a fully loaded draught of -15 m. The 125,000 DWT bulk vessels that will be needed for the export coal opportunities are even deeper, with an average draught of -16.5 m.

Currently, the main channel into Sydney Harbour has a restricted depth of approximately 11.5 m near the mouth of the harbour. However, much of the channel into the South Arm has existing water depths of 17-18 m. The area with restricted depth is a strip of the navigation channel in the outer harbour of approximately 7.5 km in length. It is estimated that 4 million cubic meters of marine sediment would need to be excavated to provide the 17 m deep channel with associated widths and side slopes to accommodate the size bulk and container vessels envisioned. The location of the proposed channel deepening program is shown in Section 10, on Figure 10-1, the summary drawing for all the projects.

Past studies included information from geotechnical borings that confirm that the bedrock surface is at -20 to -30 m, referenced to the lowest normal tide; therefore, deepening could occur to -17 m without hitting bedrock. Importantly, this geotechnical information indicates that the material to be dredged in this outer section of the channel is a mixture of sands and gravels with some silts in the upper layer. This material has the potential to make excellent building material, so the majority of the material to be excavated can be utilized in the construction of the new marine terminals (especially the proposed new container terminal complex) envisioned in this plan or could be used in other regional construction projects. A potential alternative or additional dredged material placement site is in the shallow cove located between the ACBT and International Coal Pier sites. This reclaimed land could be put to productive use as a continuation of the existing marginal wharf or for support in landside cargo handling. Any dredged material that would be excavated from the channel that is considered unsuitable for re-use as construction material would be disposed of in an environmentally acceptable manner. If any contaminated material is found in the sediments in the top layers of the dredged material, these could be encapsulated into the various marine terminals being proposed in this Master Plan.

A possible dredged material management concept is to link the disposal of the dredged material to the need for fill material at the proposed new container terminal. A containment structure would be built in the water as the initial perimeter of the terminal. Following construction of the containment structure, the dredged material would be placed inside the framework created between the containment structure and the land of the shoreline of the Greenfield site. The dredged material needs to be drained of water in order for it to settle and be compacted to have the structural capacity needed to serve as

TEC Inc. 153 Ports of Sydney Master Plan November 2007 foundation for a marine terminal. The more good quality sand and gravel type material available, the better, as this type of material will naturally drain and settle quickly without additional treatments. The more the material is mixed with fine, silty material, the slower it would drain. Weirs or wick drains could be used to expedite the drainage of the dredged material. So the placement and drainage of the material may be different, depending on the time required before the site is used for other purposes, and would have varying costs.

Based on current discussions with several international dredging firms, the cost of the dredging and disposal of the estimated 4 million cubic meters of marine sediment is approximately $31 million. The estimated cost for the containment facility, material management assuming the near term use of the reclaimed site as a marine terminal, is approximately $13 million. Therefore, the total estimated cost of dredging, disposal and dredge material management for the channel deepening, including contingencies and engineering, is $44 million.

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7.0 Projected Financial and Economic Impact Assessments This chapter presents a financial assessment of the proposed terminal developments in Sydney Harbour and the estimated economic impacts generated by the projected cargo throughput at the terminals. The following section presents the financial assessment and is followed by the estimated economic impacts generated by projected marine cargo activity and the estimated economic impacts of the projected cruise passenger activity.

7.1 Financial Assessment

It is assumed in the following analysis that the projects will be funded entirely by the private sector. A payment period of 30 years is assumed with 6% financing. Table 7-1 presents the results of the capital cost analysis. The table shows the total and annual capital costs and associated cost per ton of bulk and breakbulk, and cost per container (move) to cover the capital cost.

Table 7-1 Capital Cost Assessment CAPITAL COSTS LOW SCENARIO1 HIGH SCENARIO Project Scenario Total Annual Tonnage Cost Cost Tonnage Cost Cost Cost Cost or per per or TEUs per per ($1000) ($1000) Container Tonne Move Tonne Move TEUs Container Phase 1 163,000 12,932 750,000 $31.04 Phase 2 139,000 9,735 750,000 $23.36 Combined 22,667 1,500,000 $27.20

Coal 52,000 3,778 4,000,000 $0.95 5,000,000 $0.76

BB / Bulk w/o wharf 17,000 1,235 310,000 $3.98 620,000 $1.99 (ABCT) improvements w/ wharf 19,500 1,417 310,000 $4.57 620,000 $2.28 improvements

BB / GC 44,000 3,197 310,000 $10.31 620,000 $5.16 (Sydport)

Dredging Low Scenario 44,000 3,269 11,500,000 .28 $5.12 (Container High Scenario 44,000 3,269 20,000,000 $0.16 $2.94 and Coal) Assumes financing over 30 years at 6%, 10 tonnes per TEU, 1.8 TEUs (18 tons) per Move (Container) 1 Low and High scenarios based upon market opportunities discussed in Section 4.5.

The table shows the cost to cover container terminal development is $31.04 per container in Phase 1 and $27.20 in Phase 2. The cost to cover coal terminal development is $0.76- $0.95 per tonne. The cost for breakbulk cargo among the three scenarios ranges from $1.99-$10.31 per tonne. Dredging will be necessary to permit the larger vessels targeted for the container and coal markets. The cost to cover dredging assuming the projected

TEC Inc. 155 Ports of Sydney Master Plan November 2007 cargo volumes for the High and Low coal scenarios and the Phase 1 and Phase 2 container terminal development range from $0.16-$0.26 per tonne for either coal or container cargo. For containers in TEUs, assuming 18 tonnes per box, the estimated cost per move ranges from $2.94-$5.12 per container.

The terminal revenues required to cover these costs, and other operating and maintenance costs, will be generated from the charges levied by the individual terminal operators to their customers. The operating and maintenance cost cannot be estimated at this time but it is assumed these costs will be covered. As a proxy to estimate a portion of the revenue streams to the terminals, tariff revenues received by public port authorities were considered. Revenue streams at Sydney Harbour terminals can be estimated using the tariffs to estimate potential revenues. Table 7-2 shows the estimated wharfage and berthage charges levied by the Port of Halifax against the targeted commodities identified for Sydney Harbour. Berthage is charged against the vessel but is allocated against the targeted cargo loaded and discharged in Sydney Harbour.

Table 7-2 Wharfage and Berthage Revenues (Based on 2007 Halifax rates)

Wharfage Berthage Total Containers $54.20/move $3.53/move $57.73/move Coal $0.501/tonne $0.064/tonne $0.565/tonne Breakbulk $2.517/tonne $0.08/tonne $2.59/tonne

Based on this revenue stream estimate, the wharfage and berthage charges will be more than sufficient to cover the terminal development and dredging costs under the low and high scenarios for containers and coal. The wharfage and berthage revenue for breakbulk will be sufficient to cover the terminal development cost for breakbulk only under the high scenario. Other charges could be levied to cover the balance of the breakbulk terminal development under the low scenario.

7.2 Economic Impact of Projected Marine Cargo Development

Table 7-3 shows the estimated economic impacts generated by the proposed container, coal and breakbulk cargo opportunities. The impacts, calculated using the financial model discussed in Chapter 2 and growth scenarios presented in Chapter 4, are presented for the low and high scenarios. The economic impacts do not include a projection of potential harbour fees.

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Table 7-3 Projected Economic Impacts of New Cargo Market Low Scenario High Scenario Jobs Direct 1,197 2,323 Indirect 1,090 1,673 Induced 640 1,230 Total 2,927 5,226

Annual Personal Income ($1,000) Direct $47,676 $91,557 Induced/Indirect 47,199 90,641 Total $94,874 $182,198

Annual Revenue ($1,000) Direct $220,765 $431,564 Indirect 59,567 91,454 Total $280,332 $523,018

Annual Taxes ($1,000) Provincial $28,510 $50,901 Local 1,897 3,386 Federal 48,003 85,706 Total $78,410 $139,993

7.3 Economic Impact of Projected Cruise Passenger Activity This section presents the estimated economic impacts of projected cruise passenger activity on the local economy. The economic impacts are estimated from the baseline cruise impact model described earlier in Chapter 2 and growth scenarios presented in Chapter 5. The projected cruise passenger and crew activity were input into the impact model to estimate the projected economic impacts. Table 7-4 presents the economic impacts for the “A” cruise scenario.

Table 7-4 Projected Economic Impacts Generated by Cruise Scenario “A” Scenario/Impact 2013 2018 2023 2030 “A” – Low Total Jobs 673 846 1.019 1,260 Total Income ($1,000) 19,902 25,008 30,113 37,260 Total Revenue ($1,000) 48,542 60,994 73,446 90,879 Total Taxes ($1,000) 10,078 12,662 15,248 18,867

“A” – Mid Total Jobs 701 902 1,103 1,385 Total Income ($1,000) 20,739 26,682 32,624 40,943 Total Revenue ($1,000) 50,583 65,077 79,570 99,861 Total Taxes ($1,000) 10,502 13,511 16,519 20,731

“A” – High Total Jobs 730 959 1,188 1,509 Total Income ($1,000) 21,576 28,355 35,135 44,626 Total Revenue ($1,000) 52,625 69,159 85,694 108,842 Total Taxes ($1,000) 10,925 14,358 17,791 22,596 Total Taxes= Federal, provincial and local taxes; federal assumes a 15.5% tax rate through 2030.

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Table 7-5 presents the economic impacts for the “B” cruise scenario. Table 7-5 Projected Economic Impacts Generated by Cruise Scenario “B” Scenario/Impact 2013 2018 2023 2030 “B” – Low Total Jobs 479 543 619 740 Total Income ($1,000) 14,157 16,049 18,298 21,883 Total Revenue ($1,000) 34,530 39,142 44,629 53,372 Total Taxes ($1,000) 7,168 8,127 9,265 11,081

“B” – Mid Total Jobs 585 662 756 904 Total Income ($1,000) 17,289 19,599 22,342 26,724 Total Revenue ($1,000) 42,169 47,802 54,492 65,181 Total Taxes ($1,000) 8,755 9,924 11,313 13,532

“B” – High Total Jobs 691 783 893 1,067 Total Income ($1,000) 20,421 23,150 26,390 31,566 Total Revenue ($1,000) 49,808 56,462 64,364 76,989 Total Taxes ($1,000) 10,340 11,722 13,362 15,984 Total Taxes= Federal, provincial and local taxes; federal assumes a 15.5% tax rate through 2030. Table 7-6 presents the economic impacts for the “C” cruise scenario. Table 7-6 Projected Economic Impacts Generated by Cruise Scenario “C” Scenario/Impact 2013 2018 2023 2030 “C” – Low Total Jobs 747 658 772 886 Total Income ($1,000) 22,097 19,466 22,833 26,205 Total Revenue ($1,000) 53,895 47,478 55,689 63,915 Total Taxes ($1,000) 11,189 9,856 11,561 13,269

“C” – Mid Total Jobs 747 749 879 1,009 Total Income ($1,000) 22,097 22,151 25,990 29,839 Total Revenue ($1,000) 53,895 54,026 63,390 72,754 Total Taxes ($1,000) 11,189 11,216 13,160 15,106

“C” – High Total Jobs 747 840 986 1,131 Total Income ($1,000) 22,097 24,842 29,147 33,453 Total Revenue ($1,000) 53,895 60,589 71,090 81,591 Total Taxes ($1,000) 11,189 12,579 14,759 16,939 Total Taxes= Federal, provincial and local taxes; federal assumes a 15.5% tax rate through 2030.

7.4 Economic Impact of Channel Deepening To realize the coal and container trades through the Ports of Sydney, the outer navigation channel of Sydney Harbour needs to be deepened to -17 m. It is estimated that this excavation and dredge material disposal will cost an estimated $45 million. To illustrate the economic benefits from this specific capital expenditure, the full time jobs, annual

TEC Inc. 158 Ports of Sydney Master Plan November 2007 payroll and annual taxes that would result only if it were done have been separated out from the total economic impacts from projected marine cargo trade through Sydney. The following table depicts the estimated economic impacts from strictly the coal and container trades that will be enabled by the channel deepening:

Table 7-7 Projected Economic Impacts of Deepening Navigation Channel Coal Containers Jobs Direct 68 2,036 Induced/Indirect 433 1,526 Total 501 3,562

Annual Personal Income ($1,000) Direct $3,302 $79,894 Induced/Indirect 3,269 79,095 Total $6,570 $158,989

Annual Revenue ($1,000) Direct Revenue $40,596 $386,250 Indirect Revenue 21,258 24,712 Total $61,854 $410,962

Annual Total Taxes ($1,000) Provincial $4,882 $34,689 Local 325 2,308 Federal 8,216 58,417 Total $13,423 $95,414

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8.0 Environmental Overview of Port Master Plan A preliminary overview of the existing environment of the area potentially affected by the Master Plan is presented is Section 8.1. A preliminary assessment of sensitive environmental issues of concern identified for each of the proposed Master Plan activities is presented in Section 8.2. This assessment was prepared as a basis for developing strategies for avoiding and/or mitigating, where necessary, potential adverse environmental effects of the projects.

Information used in this environmental overview was obtained from existing data available from previous studies of Sydney Harbour, Environment Canada, the Nova Scotia Department of Environment and Labour, the CBRM and other sources. Further investigation of the environment may be required for each project site in accordance with provisions of the Canadian Environmental Assessment Act (CEAA) and the Nova Scotia Environment Act.

8.1 Environmental Overview of the Port Master Plan Projects comprising the Master Plan are located in three main areas: the seaward arm of outer Sydney Harbour in the vicinity the Southeast Bar and seaward; the Sydport area, along the western shore of the South Arm, north of Westmont; and along the downtown Sydney waterfront on the eastern shore of South Arm between the International Coal Pier and the Sydney Marine Terminal.

8.1.1 Land Use Development within the CBRM requires compliance with the current Land Use By-law, which designates land use zones and associated permitted uses. Generalized zoning and land use of the project area was obtained from available CBRM Land Use By-law maps, effective February 17, 2004, as amended. Land use zones along the seaward arm of outer Sydney Harbour are predominately residential. The waterfront at North Sydney is a combination of commercial, light industrial, industrial park, public recreational, urban residential and mixed use. The Land Use By-Law Map indicates that the major existing and planned uses for the North Sydney Harbour are Central Business District and Port Zone (CBRM 2004).

The Sydport site, including the relatively undeveloped coastline extending north to Keating Cove, is designated as the Sydport/SYSCO Industrial Park Zone (SIP). This zone also encompasses much of the Sydney waterfront and is bound by the International Coal Pier, Sydney Port Access Road, Muggah Creek, and the (formerly named) SYSCO site. Areas to the north and inland to the east are predominately urban residential (RUC). Areas on the southerly boundary of the SIP zone are the Coke Ovens Site Reserve Zone (COR) and the Arterial Business Corridor Zone (ABC).

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A secondary planning area was developed by CBRM for the North End of Sydney in 2006. This area consists of a peninsula formed by Muggah Creek and South Arm. The Waterfront of Muggah Creek to the point of the peninsula is zoned Redevelopment Opportunity (RO). The North End waterfront along South Arm is zoned Waterfront Comprehensive Development District (WCDD), Sydney Marine Terminal (SMT), and Waterfront Southern Sub Area (WSSA). The heart of the North End is designated the North End Residential Zone (NER). South of secondary planning area, zoning designations are Downtown Sydney Waterfront Zone and Central Business District.

The Master Plan projects are located within the SIP and SMT zone in Sydney and Port Zone in North Sydney. It is fully anticipated that the projects identified in this Master Plan will conform to the Land Use By-law permitted uses.

8.1.2 Geology Sydney Harbour lies within the Sydney Coalfield, which forms the major lowland of Cape Breton Island. The lowlands are underlain by sedimentary rock of the Carboniferous age, which frequently contain extensive coal seams (Baechler 1986). Bedrock is the Morien Group, composed of sedimentary rock formations containing layers of mudstone, siltstone, sandstone, shale, and limestone. (Baechler 1986, Magee et al. 1987).

Surficial geology of the land in the Sydney area consists of a relatively thin (3-6 m) layer of glacial till. The till unit is largely a yellowish brown, stony, sandy silt or silty sand. Most of the surficial geology of the project area has been previously disturbed, with the exception shoreline north of the Sydport site.

The seafloor of Sydney Harbour consists of sand and gravel sediments in the outer harbour, seaward of the Southeast Bar, a narrow spit of land separating the outer harbour and the South Arm, progressing to fine silts in the Northwest and South Arms (Magee et al. 1987).

8.1.3 Water Resources Watercourses Sydney Harbour is a natural ocean gateway formed by the confluence of two drowned river valleys. The seaward arm of the outer harbour divides into the Northwest Arm and South Arm of the inner harbour in the vicinity of South Bar and Point Edward. The outer harbour has a deep narrow channel in its center that ranges from approximately 12 m to 15 m deep where it splits into the two arms. There is a shoal rising to 7 m off Point Edward (Lee 2002). The South Arm is about10 km long and 1 km wide with both deep (18 m) to shallower depths (11 m) at its southernmost point. Deeps range between 12 and 14 m near the Sydney waterfront. The Sydney River empties into the South Arm of the harbour at its head south of the Sydney Marine Terminal.

Salinity and currents of the harbour are consistent with estuarine conditions. Freshwater inputs from the Sydney River result in low salinity values (5 parts per thousand (ppt)) at

TEC Inc. 161 Ports of Sydney Master Plan November 2007 the head of the harbour. Salinity gradually increases to 28.5 ppt at Muggah Creek and 29 ppt in the outer harbour. Currents through the harbour are relatively slow for much of the year (10 centimeters per second, Lee 2002), but may increase substantially with storms. Circulation in the harbour is generally characterized by outflow near the water surface and inflow at depth. The tidal range between low and high tides in Sydney Harbour is typically between 0.6 m and 1.1 m.

Muggah Creek, also known as the North and South Tar Ponds, flows into the South Arm near downtown Sydney on the southern border of the SYSCO site. This waterway, as well as its tributary Coke Ovens Brook, is severely contaminated by Polycyclic aromatic hydrocarbon (PAHs), polychlorinated biphenyls (PCBs), and heavy metals as result of decades of steelmaking. This contamination reaches into the South Arm of Sydney Harbour (Lee 2002, EAR 2006). Studies have shown that in addition to Muggah Creek, there have been other important sources of PAHs, PCBs and heavy metals entering the harbour. Water quality in Sydney Harbour has also periodically suffered from sewage inputs and associated bacterial contamination.

Barachois Brook and its tributaries flow into Barachois Creek, which enters the South Arm on its western shore at the Sydport property along Barachois Bar.

Water Supply Sydney has a humid climate with high and consistent precipitation that, combined with geologic and physiographic qualities favorable for water storage, provides plentiful supplies of surface water and groundwater.

Potable water for the Master Plan project area is supplied by a surface water reservoir and municipal water supply system. The City Reservoir lies south of the Sydney urban area and is supplied by Middle, Dumaresq, Peter, and Bray Lakes (Baechler 1986). The quality and quantity of this water supply is good.

Many major industrial and institutional users requiring significant amounts of water utilize sources outside the municipal water supply system. The Sydney and Sydport sites use water from the Sydney River water system. North Sydney utilizes a municipal water supply system supplied by the Pottle Lake reservoir.

Groundwater wells supply water in the more rural areas. The quantity of groundwater is of sufficient volume, but may have a high mineral and iron content in some places. Groundwater in proximity to several of Sydney’s industrial areas has been contaminated. PAHs and benzene, toluene, ethylbenzene, xylenes (BTEX) compounds are the dominant groundwater contaminants in the Sydney area. Contaminants have migrated via groundwater in shallow bedrock from the Coke Ovens former steel mill site in a west- southwest direction to the SYSCO property and Coke Ovens Brook (EAR 2006).

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8.1.4 Habitat and Wildlife

8.1.4.1 Terrestrial Habitat The Sydney area is part of the Bras D’or Lowlands Ecodistrict, which lies within the North Umberland Bras D’or Ecoregion (Neily, et. al 2003). Much of the ecoregion is relatively low lying and has a range of elevations between 25-50 m above sea level.

The project area features a hummocky to hilly topography (Neily, et. al 2003). Based upon ecosections delineated in Neily, et al. (2003), the soils of the project area range from medium textured alluviums (sandy loams) to the fine textured glacial tills (sandy clay loams). Soils of the Sydport Industrial Park site are well drained with medium texture, whereas the other project area sites tend to be imperfectly drained, medium to fine textured soils. The soil drainage on these sites may be restricted by a compacted basal till. Soils of the project area sites have been previously disturbed by industrial activities, with the exception of shoreline area north of the Sydport site along Keating Cove that is relatively undisturbed and forested.

The Bras D’or Lowlands Ecodistrict benefits from a moderated climate due to its proximity to the large body of inland salt water and by the shelter afforded by the surrounding uplands of the Cape Breton Hills (Neily, et. al 2003). The predominant tree species of the lowlands are black and white spruce, although balsam fir has re-forested many lands that have been disturbed by farming. The well drained hills also support stands of lower quality tolerant hardwoods such as sugar maple, yellow birch and beech. Old field white spruce often occurs in abandoned pasture lands.

There appears to be few inland wetlands in the project area. There are marshes within and adjacent to the undeveloped portion of the Sydport Industrial Park site, and marsh and fen areas adjacent to the railroad and Trans Canada Highway in North Sydney.

8.1.4.2 Marine Habitat Sediments in Sydney Harbour are predominately fine clay and silt, with lesser amounts of sand and gravel. Sediments of the South and Northwest Arms are finer and become more coarse and sandy in the outer harbour seaward of Southeast Bar (Lee 2002). Sediments tend to be coarser in the shallower, nearshore fringes of the harbour.

The highest levels of organic carbon occur near the mouth of Muggah Creek where the greatest level of contamination occurs. High levels also occur in the inner harbour near the Sydney River. The higher levels of contamination affect the diversity of the benthic communities present in the harbour (Lee 2002).

Benthic macrofauna of the seafloor (animals 0.5 millimeters or larger) were sampled as part of studies undertaken to determine the environmental effects of contaminants present in Sydney Harbour (Lee 2002). Distinct benthic macroinvertebrate communities are present within Sydney Harbour that are influenced by sediment characteristics and contaminant distribution.

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Sampling by Lee (2002) found that the South Arm, where silt and clay sediments contain the highest concentrations of contaminants, had the lowest abundance and diversity of macroinvertebrate species. Species included the burrowing anemone Cerianthus borealis, the polychaetes Nephtys incisa and Ninoe nigripes, the nemertean worm Cerebratulus sp, and a phoronid Phoronis architecta. In the inner South Arm at the mouth of Sydney River the common species were the polychaete worm Nephtys incise and the burrowing anemone Cerianthus borealis, with occasional occurrence of whelks (Nassarius trivittatus) and the bubble shell (Acteocina canaliculata).

Throughout Northwest Arm and in the South Arm at depths shallower than 12-13 m, sampling of the silt and clay sediments identified a community dominated by the polychaete Mediomastus ambiseta, the polychaetes Ninoe nigripes, Nephtys incisa and Scolelepis squamatus, the bubble shell Acteocina canaliculata, the burrowing anemone Cerianthus borealis, and the nemertean worm Cerebratulus sp.

The high organic content and shallow depths in Sydney Harbour may contribute to a seasonal depletion in oxygen levels, a fairly common occurrence in shallow Nova Scotia inlets, which stresses benthic communities (Lee 2002). The presence of Cerianthus and Phoronis species are tolerant of low oxygen levels and are likely indicators of this condition.

The coarser, sandy sediments of the seaward arm of the outer harbour support a more diverse community dominated by the polychaete Owenia fusiformis. A diverse community was also found on the sandy bottom that is characteristic of either side of the channel in the outer harbour and at the harbour mouth. The bivalve Tellina agilis; the New England dog whelk Nassarius trivittatus, and the polychaete Aricidea catherinae were identified.

All areas of Sydney Harbour and the Sydney River are closed to shellfish harvesting due to bacterial contamination. There are no aquaculture fisheries sites within Sydney Harbour (Environment Canada). Lobster and rock crab fishing occurs in the Northwest Arm in North Sydney during a regulated May through July season. There is no lobster fishing in the South Arm. Other fisheries present between New Waterford and North Sydney include seasonal runs of mackerel, herring, salmon, eel, trout and gaspareau. Fisheries and fish habitat are protected by Canada’s Fisheries Act, which includes the regulation of activities that could harm, alter, disturb or destroy fish habitat.

8.1.4.3 Significant Habitats and Species at Risk Habitats identified as significant by the Nova Scotia Department of Natural Resources Significant Habitats Map (2004) occur in several areas in the vicinity of the project sites, but do not appear to occur within the sites. The Southeast Bar and surrounding marine environment is designated habitat for species at risk. This rank is assigned to species with the highest risk of extinction or extirpation. This area is also habitat to migratory birds and species of conservation concern. In the vicinity of Westmount Road along the outer

TEC Inc. 164 Ports of Sydney Master Plan November 2007 part of the South Arm western shore is a block of habitat designated as habitat for species of conservation concern.

Several marine and terrestrial species listed under Schedule 1 of the Environment Canada Species at Risk Act (SARA), have distribution ranges within the project area (Environment Canada 2004). The endangered blue whale (Balaenoptera musculus) and North Atlantic right whale (Eubalaena glacialis) occur in the waters off eastern Canada and may occasionally enter Sydney Harbour to feed. Distribution areas for the special concern monarch butterfly (Danaus plexippus) and the plant prototype quillwort (Ospetes prototypes) overlap the project area in North Sydney.

8.1.5 Air Quality

Existing ambient air quality in the Sydney area compares favorably with other urban areas in Nova Scotia in measurements of the monitored air pollutants: ground level ozone (O3), fine particulate matter (PM2.5), and sulfur dioxide (SO2). Measurements of carbon monoxide (CO) and nitrogen oxides (NOx) taken in Halifax indicate levels in that region are well below the National Air Quality Objectives (Di Cesare 2006). Air quality in Sydney has improved since operations of the coke ovens ceased, especially for the measured pollutants PM and SO2 (Monette and Colman 2004).

Public concerns about air quality in Sydney are currently focused on the Sydney Tar Ponds and Coke Ovens remediation projects, which have the potential to release hazardous contaminants into the air over residential neighborhoods. There is currently an air monitoring program being undertaken by the Sydney Tar Ponds Agency in association with that project (EAR 2006). Five air monitoring stations are operating in the Whitney Pier, Victory Park Armory, Ferry Street, and Victoria Road areas, and a sixth station is located 3.5 km upwind.

8.2 Environmental Issues of Concern

The Master Plan projects must be reviewed for potential applicability of the federal CEAA or the provincial Environment Act, each of which may necessitate the preparation of an Environmental Assessment (EA). A federal EA must be undertaken for any projects with federal involvement; including ownership, financial assistance, and granting of permits and/or approvals. A provincial EA may be required for certain activities designated by the Environment Act, including projects that fill wetlands or beaches.

The environmental resources likely to be of the most concern with implementation of the Master Plan projects are: x Marine sediments x Water resources x Marine habitat x Terrestrial habitat x Air Quality

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The issues of concern, grouped by type of activity that will be undertaken, are discussed below. Potential development activities associated with the implementation of the Master Plan include:

Channel and ship berth deepening

x Dredging would temporarily disturb marine sediments and associated benthic invertebrate communities. Susceptibility of fine grain sediments to suspension in the water column will have to be considered and avoided or mitigated where feasible in order to protect fisheries and fish habitat. If contaminants are present within sediments, the release of any contaminants during dredging may adversely affect water quality. Given the history of contaminated sediments near Muggah Creek, it will be important to have a comprehensive sediment sampling and testing program to characterize the quality of the sediment within the proposed dredge prism. Knowing the spatial distribution of sediment quality will aid in dredging and disposal strategies to minimize environmental impacts. Measures to mitigate the turbidity effects of dredging include the use of environmental buckets in mechanical dredging that minimizes the amount of leakage from dredging equipment and the use of floating silt curtains in sheltered areas to contain suspended sediment within the immediate dredging area.

x Disposal of dredged material needs to be managed to avoid adverse effects to natural systems. Previous studies of outer harbour sediments indicate the presence of sand and gravel in addition to silts. A substantial portion of the sediments excavated from deepening the navigation channel would be appropriate for re-use as fill materials in the new marginal wharfs for the container terminal. In this manner, the container terminal acts a confined disposal facility (CDF) that will re- use the marine sediment as part of the structural filling of the terminal while at the same time providing a permanent disposal site for the placement of these dredged materials. This is a particularly important option for dredged material placement in Sydney Harbour as the sediment does not need to be disposed of in the ocean nor will new upland sites for the receipt of dredged material need to be found.

x Long term alteration to the hydrodynamics of Sydney Harbour should be studied to determine the effects of deeper water on the salinity and sedimentation regime of the Harbour.

Nearshore in-fill for marine terminal construction

x Nearshore in-fill for a new container terminal and expanded coal terminal along the shorelines of the South Arm will impact aquatic habitats present in the respective locations. Given the location of the proposed coal terminal near the former steel mill, the area of proposed fill has been previously disturbed. The site of the proposed container terminal is north of the developed portion of the industrial park and former naval facility and is currently undeveloped.

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x Mitigation for the in-fill could include rehabilitation of nearby habitat, habitat creation or similar physical measures to compensate for the loss of aquatic habitat that will occur with the implementation of these Master Plan projects.

New marine terminal development

x Upland areas along the western banks of the South Arm would be changed from a forested habitat to a developed marine terminal complex. An assessment of the habitat values should be undertaken to determine the presence of significant environmental features so that development plans can seek to minimize environmental impacts and to formulate mitigation concepts to compensate for lost habitat.

x Short term environmental impacts should be minimized through the use of Best Management Practices (BMPs) to control dust emissions, stormwater run-off and protect wetlands and other environmentally sensitive features on the site.

x Long term mitigation measures for the development and alteration of upland resources may need compensation that would include strategies to restore, replace or create new wetlands or other sensitive elements of the surrounding ecology.

Upgrades of existing marine terminals

x Upgrades include construction of covered storage buildings; installation of dolphin systems; and redevelopment of underutilized sites for marine or tourist related activities. Minor short term environmental effects are anticipated and with BMPs impacts from construction would be temporary and limited to the immediate vicinity of the construction site.

x Mitigation for these port projects would not need to be extensive given the limited construction and previously disturbed character of the sites. Demolition would be needed on some of the sites that would need to be managed to minimize dust and exposure to potential containments in building materials and soils on the sites.

Vessel and Terminal Operations

x Vessel traffic will increase and terminal operations, including a marine terminal in new location, will become busier should the goals of the Master Plan come to fruition. Sydney Harbour has an excellent navigation system with ample room for increases in vessel traffic. Increased numbers of vessels on a regular basis should be readily accommodated and not result in environmental concerns. Increased terminal operations will create impacts that are typical of industrial activities within an industrial zone, including noise, air emissions, light and rail and road traffic. It will be important to ensure compatibility between these new marine terminal operations and any residential neighbors that suitable measures are made to minimize any long term impacts resulting from increase port operations.

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9.0 Strategic Marketing and Management Plan This section addresses action items that are needed to achieve the goals of the Master Plan for the Ports of Sydney. The Master Plan document establishes the setting within which the Port is operating and needs to operate to increase business and obtain the economic benefits envisioned. The assets of the Port are its available marine facilities, room for physical expansion, available labor and supportive community that needs increased economic development. The constraints of the Port are the inherent reality that ports reflect the economy that they serve and the local and regional economies of Sydney and Cape Breton suffer from moderate and declining populations and slow economic growth. Much of the challenge of this Master Plan, particularly, on the marine cargo side, is that that is limited history of marine activities and therefore, opportunities must be aggressively pursued to make things happen.

An overarching question in the Port has been how it should be collectively governed. Sydney Harbour is in a unique position with relatively recent federal government divestiture programs and new marine terminal ownership and operation actors. The creation of the Marine Group and movement forward with this Master Plan fills a void for leadership that needs to continue for the Port to become more competitive and capture a share of the global waterborne commerce. This section begins with a background and discussion of options for port governance in Sydney Harbour.

9.1 Ports of Sydney Governance

The Sydney port community is moving forward with its goals to collectively promote, organize and develop the port assets of Sydney Harbour. The Ports of Sydney are at a time of opportunity and have a rather unique chance to create a port organization or governance that best fits their collective goals.

This section provides background on the current organizational structure of the port community in Sydney, presents options for governance of the ports, and discusses several examples of how other port communities and organizations in Canada and the United States are governed. Recommendations are an immediate and long range plan for governance are also provided.

It is noted that the traditional model is a public port authority as a quasi-governmental body that owns and invests in land and basic infrastructure and a private marine terminal operating company having a long term lease to move the waterborne cargo or facilitate passenger movement. While this model is still prevalent, it is undergoing change. Several of the large capital investments in new port infrastructure are coming from the private sector rather than exclusively from capital bonding from the public sector. Large investment banks, transportation companies and energy companies are leading the way in financing, building and controlling the operation of large scale bulk, liquefied natural gas and container terminals. The implication of this trend and the financial realities of the economy of Cape Breton would seem to endorse having port governance that sets the stage for attracting private sector involvement and investment.

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9.1.1 Background on Governance A consortium of marine terminal owners and operators in the Ports of Sydney (The Marine Group) has collaborated on the preparation of this Master Plan. The consortium is sharing the costs of consultancy engagement and has met on several occasions to share ideas on mutual port and harbour issues. The Marine Group consists of government, non- profit and private companies including:

x Sydney Ports Corporation (non-profit) x Sydport (privately owned by Laurentian Energy Corporation) x Logistec Stevedoring (private terminal operator of the International Coal Pier) x Provincial Energy Ventures (private operator of the Atlantic Canada Bulk Terminal) x Marine Atlantic (Federal Crown Corporation owner and operator of ferry terminal) x Emera Utility Services Inc/Nova Scotia Power Inc (private owner of the International Coal Pier)

Over the past decade, the marine industry, its ownership and operation, has undergone changes in the Ports of Sydney. The Canadian federal government that once owned port facilities in numerous Canadian harbours divested itself of direct ownership. Pursuant to the Canada Marine Act, and under the 1995 National Marine Policy, 19 major Canadian ports were deemed vital to Canada’s domestic and international trade. These 19 ports were designated Canada Port Authorities (CPAs) which received Royal Assent on June 11, 1998. CPAs are established to be self sufficient. They may also be given Crown land to operate and manage, but not to own. CPAs may acquire and own land on their own. CPAs have boards of directors who are responsible for the management of the port and its activities. Transport Canada monitors ports across the country in order to ensure CPA compliance with legislative requirements and its operation of the particular port. The Ports of Sydney were not among the 19 designated CPA ports.

Current marine terminal ownership and operation in Sydney has evolved from this divestiture by the federal government and from the demise of the steel industry along the Sydney waterfront. The federal divestiture is continuing as the federal ownership of the bottom of the harbour, collection of harbour dues and employment of Harbour masters in both Sydney and North Sydney is expected to be discontinued and transfer to a local entity.

Several years ago, the Sydney Marine Terminal located in downtown Sydney was divested from the federal government to the CBRM. The Sydney Ports Corporation Inc. is a not for profit corporation that leases the Sydney Marine Terminal from the CBRM. The primary business at the Sydney Marine Terminal is cruise passenger, while a portion of their revenues come from being the receiver of oil imports that move from the terminal via pipeline to oil storage tanks located upriver on the Sydney River.

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Sydport is formerly a Canadian Navy base. Sydport, located on the west shoreline of the South Arm of the Harbour, is owned by Laurentian Energy. Laurentian consists of a number of local stockholders and is governed by a board of directors. Sydport includes a land based industrial park with an existing pier. Rail is available on the property. Sydport also includes a 400 to 500 acre undeveloped parcel of waterfront land.

Logistec is a large international marine cargo handler that operates in 22 ports in Eastern Canada and the U.S. Logistec operates the International Coal Terminal in Sydney. The facility moves coal imports by rail and truck primarily to power plants owned by Nova Scotia Power

Provencial Energy Ventures leases the Atlantic Canada Bulk Terminal (ACBT) located immediately south of the Logistec operated facility. ACBT is owned by SYSCO, an entity of the Provincial Government. The marine terminal has 1170 ft of continuous wharf space with 110 acres of back up land. The marine terminal accommodates bulk, breakbulk and project cargoes.

Marine Atlantic, located on the waterfront in downtown North Sydney, owns and operates facilities and ferries that primarily move passengers and cargo to Newfoundland. Marine Atlantic is a Crown Corporation of the federal government.

Currently, The Marine Group consists of these distinct members.

MV Osprey LTD, also located in North Sydney, is a commercial fishing company with marine terminal facilities and vessels for processing, freezing and shipping shrimp and groundfish. MV Osprey is a private company, which has not yet joined the Marine Group.

The options to collectively move forward, involving some form of agreement and/or governance, follows.

9.1.2 Options for Governance Sydney Harbour’s current marine ownership and operations have been contrasted with several port communities. The result of recent research into four Canadian ports and three U.S. ports is provided. The research provides insights into the types of facilities, marine businesses and organizational governance that exist in these other port communities.

The criteria for suggesting the followings options include: x What will best continue the momentum to promote the Ports of Sydney; x What existing mechanisms/organizations could be expanded to govern the Port; x What is public/private climate in Sydney for implementing an option; x What revenue sources are there and what roles should an option provide; and x What models of port governance that work elsewhere could also work in Sydney over the long term?

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It should be noted that Transport Canada currently collects harbour dues in both Sydney and North Sydney.

The average annual amount of harbour fees is as follows: x $220,000 Sydney harbour fees x $100,000 North Sydney harbour fees x $220,000 Marine Service Fees for Canadian Coast Guard

These funds that currently go to Transport Canada will soon be terminated as will the Harbour Master positions. Other Canadian harbours have replaced these harbour fees with similar charges. Sydney and North Sydney could readily replace these fees and have them remain in the community. A new port governance group could be the recipient of these funds for the betterment of the Ports of Sydney.

The following three options have been explored for port governance: 1. Expand Memorandum of Understanding for Marine Group 2. Expand Role of Sydney Ports Corporation 3. Create Sydney Harbour Port Commission

9.1.2.1 Expand Memorandum of Understanding for Marine Group

An option would be to continue the collaboration among the port interests that have formed the Marine Group that are steering the Master Plan. This continuation would be formulated in the form of an expanded memorandum of understanding (MOU). The roles and responsibilities of the parties would be delineated in the expanded MOU. Revenues for activities would be generated from members of the group and the group would be able to seek grants from government agencies.

Primary roles of the Group would be to support/lobby for projects/programs of mutual benefits such as: dredging the harbour and marketing to attract port business.

An advantage of this option is that it could be implemented immediately without outside approvals, delays, constraints, etc. A disadvantage may be that the informal nature of the Group may not survive for the longer term.

9.1.2.2 Expand Role of Sydney Ports Corporation

SPC is, perhaps, the closest organization in Sydney to a typical port authority. SPC consists of a Board of Directors and is managed by a professional port staff. The professional staff is very active and engaged in marketing and hosting cruise ships and passengers at the downtown Sydney passenger terminal. The charter for the SPC provides a broad purview involving the promotion of waterborne commerce. Existing revenues are generated from wharfage and dockage charged to ships and cargoes including the

TEC Inc. 171 Ports of Sydney Master Plan November 2007 revenues from the passenger and oil traffic. However, unlike most port authorities, SPC does not own land and is more like a private terminal operating company in that regard.

The Sydney Marine Terminal is owned by the CBRM. The Economic Development and Planning Departments of the CBRM have responsibilities that relate to marine activities of the harbour (business promotion and land use planning). But these responsibilities are broad and do not solely focus on marine activities. The recent “Port to Port” Study is a land use study of the lands between the waterfront and easterly to the Sydney Airport. CBRM is the sponsor. A large portion of these lands were formerly owned by the steel industry; are currently under the control of the federal government; and may soon be divested and/or transferred to others.

The manager of the SPC is also the Harbour Master for Sydney. Among other duties, the Harbour Master collects Harbour fees from visiting vessels. Once these Harbour Dues and Harbour Master duties are terminated, it is unclear what the future course of action will be. The role of the SPC could be expanded to a harbour-wide function using revenues that used to be called Harbour Dues and funds from our sources. This would give them the resources to work on efforts that would promote the entire Sydney Harbour. The role would be promotional and not necessarily involve land ownership.

9.1.2.3 Create Sydney Harbour Port Commission

This option would be to create a traditional quasi public port commission for the entire Sydney Harbour. It is called a port commission as a port authority in Canada has a specific reference as one of the designated Port Authorities per the Canada Marine Act. The Port Commission would have harbour wide authority. It would have broad powers to own land, operate marine terminals, obtain bond funding, charge vessel and cargo fees, engage in leases and contracts and undertake other duties and responsibilities to promote commerce and economic development. Both Sydney and North Sydney waterfronts would be involved. Additionally, other transportation entities including the Sydney Airport Corporation could be folded into the Port Commission.

Public port bodies are creatures of government. As evidenced by the case studies presented in Appendix D, and according to the American Association of Port Authorities, legislation typically creates the scope and powers of public port authorities. The Port of Albany, for example, was created in 1925 by the State of New York to have land and facilities in separate local communities on both sides of the Hudson River. So, today, the Albany Port District Commission owns and operates marine terminals in its region of the Hudson River. On the other hand, the Port of Portland, Maine is a city department that owns and operates marine facilities on its side of the Harbour; while there are numerous private marine terminals on the South Portland side of the Harbour. MASSPORT, in Boston, is responsible for airports as well as ports. Boston Harbor has a number of private marine terminals that do not have any affiliation with MASSPORT. But MASSPORT was the important local sponsor with the U.S. federal government (U.S. Army Corps of Engineers) in the large scale dredging projects that have occurred in Boston Harbor over the past decade.

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Given models of port governance studied, it appears that legislation could be created to authorize CBRM to form a Ports of Sydney Commission. It would be different from the Canadian Port Authorities, but, would have similar roles and responsibilities. It could also be a longer term goal with either of the first two options mentioned being the preferred near term implementation procedure.

9.1.3 Recommended Plan for Management and Marketing of Ports of Sydney

Momentum is an important factor in bringing about increased business to the Ports of Sydney. As such, the recommended near term option for governance is to expand the MOU of the Marine Group. This expanded MOU would include additional roles and activities to implement next steps beyond the Master Plan. Other port related entities may also be added to the Group. For either of the other two options, there are a number of legal and financial issues with the continuing federal divestiture of the harbour bottom and roles of the regional and provincial government that should be further investigated and that will take time. For several elements of the Master Plan, however, the time is now and continuing the momentum of the Marine Group is recommended as the most prudent course of action for Sydney Harbour.

The recommended areas for action are: x Marketing for increase cargo and passenger business x Government relations and lobbying for port wide issues x Funding raising for harbour wide benefits, such as pursuit of environmental approvals for deepening the navigation channel x Investigating the path forward for creating a long term governance body for the Ports of Sydney

9.1.3.1 Marketing

Port-wide marketing is an area mutual interest and benefit. o The goal would be not to market a specific facility, but to provide the shipping public with knowledge on the overall capability of the Sydney Port.

ƒ This would include: bulk, breakbulk, container and the cruise market segments.

ƒ Should a container terminal be established in the port (and assuming only one will be developed), less concentration would have to take place on the container sector as specific carrier marketing would be handled by the operator.

ƒ The cruise business would also be terminal specific, therefore would have limited appeal to the port-wide or group marketing effort.

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ƒ Bulk cargoes would likely be marketed specifically by an operator on a transactional basis, however, general commercial information, specifically as it relates to infrastructure and overall capability could be accomplished by a marine or port-wide group.

ƒ Breakbulk cargoes have the greatest potential for actually being directly marketed by a port-wide group. This is the case given that a number of facilities in the Sydney port area that has the ability to handle these cargoes.

x The leading forums for establishing a presence with the shipping public for this cargo segment is to attend the annual North American and Europe Breakbulk Conventions as sponsored by the Journal of Commerce (JOC).

x Specific information regarding these forums can be found at: http://www.joc.com/conferences/breakbulk/ http://www.joc.com/conferences/bb_euro/

There will be an expense associated with attending these types of functions. For instance, point-of-sale information would have to be developed which includes: o Brochures, o CD’s, o Specific informational regarding port and infrastructure capabilities, o A trade show booth.

Further, it is likely that such a venture would require the establishment of a Sydney Port web site. While the group could make the initial contact with the shipping public, an administrator or coordinator would be required to develop further leads, answer specific questions, and act as the liaison between facility, potential user and any other stakeholder party which enters the transaction (which could very likely include: third-party intermodal providers, logistics providers, warehouse and distribution, governmental agencies such as Customs as examples).

An order of magnitude estimate to attend these two functions, assuming a part-time administrator to assist in the process would be as follows:

1. Trade Show Booth $7,500. 2. Trade Show Registration a. New Orleans $5,000. b. Antwerp $5,000. 3. Trade Attendance (2 persons) a. New Orleans $7,000. b. Antwerp $10,000. 4. Brochures $2,500. 5. CD’s (assumes filming) $12,500.

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6. Web-Site (assumes interactive) $5,000. 7. Administrator (part-time/per annum) $20,000.

Therefore, this endeavor, at minimum, could easily reach $75,000 per annum.

Another potential, is to contract with an industry professional, to represent the Ports of Sydney in terms of securing future cargo. In essence, this party would act as a “broker” on behalf of the port in the freight market in order to route cargo via Sydney. The usual cost associated with this of arrangement is a retainer that averages some $4,000 per month (professional fees only and does not include related expense). The Port of Albany, New York, as referenced in the case studies contained in Appendix D, employ this type of approach to market their port.

While a person would be required in North America, ideally, given that it is the “heart” of the breakbulk market, a similar representative should also be created in Europe. Germany, The Netherlands or Belgium would be the preferred sites given their prominence in the breakbulk market sectors.

Also, as noted in the market analysis section of the Master Plan, the market for project cargo is an excellent opportunity for the Ports of Sydney. With the track record of already moving parts for wind turbines and with similar projects on the horizon, fully understanding and presenting the advantages of the Ports of Sydney to these shippers would be a timely effort.

9.1.3.2 Government Relations and Regulatory Affairs The port group will also have to address how they are represented with regard to government relations and regulatory affairs. Besides membership in the two leading associations (which have their own related expenses): o The American Association of Port Authorities (AAPA), and o The International Association of Ports and Harbors (IAPH), the port group will have to take a position with regard to how they address national (and international) port issues as it relates to regulatory affairs.

Leading this area will be the implementation of mandated port security and port security procedures. The existing Marine Group would be an excellent forum to hold workshops and exchange information on issues such as port security, Harbour fees, and other comment governmental issues facing the harbour.

9.1.3.3 Fund Raising for Harbour wide Issues

Deepening the entrance channel to Sydney Harbour will open up opportunities to attract coal exports should the Donkin Mines project move forward as well as allow the accommodation of a new generation of container ships should a new container on the northwestern most shoreline of the South Arm. Therefore, channel deepening will benefit the entire Port and can be pursued with mutual interest.

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Initial efforts to prepare environmental documents and undertake sediment and other habitat surveys will require substantial funding. Since the potential benefits are regional, Provincial and even, country wide, the pursuit of public monies is warranted. The leverage of public monies with private sector funds is also possible. Several of the development projects will depend upon private sector investment including the attraction of partnerships and new prospective owners. Other development projects such as the expansion of the cruise ship terminal and purchase/development of cruise/tourist related venues will most likely require capital funds from government.

The Marine Group can certainly pursue this fund raising including coordinating and rationalizing the investment by CBRM, Provincial and Federal economic development grants.

9.1.3.4 Investigating Long Term Governance Organization The Marine Group should take comprehensive look at the creation of appropriate legislation to develop a long term governance organization for the Ports of Sydney. With the pending divestiture of the harbour bottom and the continued evolution of waterfront lands at SYSCO, there are several legal issues that should be pursued. Moreover, the creation of a new governance organization should involve the public to ensure that all pertinent issues are considered.

The CBRM is well positioned as a regional form of government to take a lead in this investigation and in the initiative to develop the appropriate legislation. The roles of land ownership, funding authority, liability, roles in port development and other potential activities should be part of the investigation. The Marine Group should be vested with the responsibility to continue the momentum as a near term option for port governance but with the understanding that a more permanent governance body similar to those that are successful elsewhere is the prudent action to follow.

9.1.3.5 Port Market Branding In developing any of the cargo types (container, breakbulk/neobulk or bulk) for either new or existing markets, the Ports of Sydney need to create a “unified and brand message” for the shipping public. This message or “branding” should clearly delineate the competitive advantage that Sydney has as it relates to the competitive port offerings.

Portwide attributes that were uncovered and confirmed during this analysis include (but are not limited to): x Safe and sheltered harbour, x Abundance of land (and assets to handle varied cargo types), x A port community which is competent, steeped in history and “user-friendly”, x Experienced and capable vessel and/or cargo supports (with the exception of not acting as a bunker port), x Competitive as it relates to the port’s proximity to the GCR and thus vessel costs and,

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x Most importantly (when viewed from the shipper’s/importer’s scale), a reliable, constraint-free infrastructure capability.

Consequently, from a “port-wide” perspective, the port stakeholder community should memorialize these capabilities and begin a formal marketing campaign which enlightens the general shipping public (see the proposed action plan presented in Section 10).

When reviewed against competing ports, the Ports of Sydney lack an identity with the general shipping public, and outside of those stakeholders involved in existing cargo operations, virtually none is present in the marketplace. Left to its own, the port will develop a perception (which could be negative or positive, but is uncontrolled) in the minds of those who handle cargo on a worldwide basis.

By its nature, the port business is global in scope, and therefore it is imperative that the port community begin this brand messaging effort with the leading industry medians on an international basis. This effort should include, but not be limited to:

x A Ports of Sydney website (which would include site information and asset applications, general tariff information, navigational aids, contact information and links to all other pertinent sites.

x A Print Media Message-which first introduces the shipping public to Sydney, and then begins to specifically address the capabilities. The effort should concentrate on the port’s ability to reach the hinterland North American markets.

x Attendance at Global Shipping Forum/Symposiums-outside of the passenger ship effort, the port lacks a unified approach for attendance at the leading industry functions. Specifically, the port should be an active participant in the leading annual breakbulk/neobulk forums (held in Europe and the U.S.).

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10.0 Master Plan for the Ports of Sydney

The Master Plan for the Ports of Sydney envisions increased cargo and cruise activities. For marine cargo, there are plans to grow incrementally following more aggressive and focused marketing. Additionally, there are bold plans for containers and coal exports to take advantage of the Sydney Harbour’s natural attributes and trends in global commerce and logistics. For Sydney’s cruise business, the plan depicts the continuing growth of passenger visitation through the Sydney Marine Terminal. With expansion of the berthing and development of adjacent parcels for tourist related activities, the plan seeks to keep Sydney competitive and welcoming as a port-of-call for cruise ships.

Figure 10-1 provides an illustration of the Master Plan for the Ports of Sydney. The proposed development projects would occur at different intervals. The development projects are listed below:

x Planned Upgrades at Marine Atlantic Ferry Terminal x Deepening Outer Navigation Channel x Phase 1 Development of New Container Terminal at Sydport x Coal Export Expansion at International Coal Pier/Atlantic Canada Bulk Terminal x Add Dolphin System at Sydney Marine Terminal x Upgrade Breakbulk Capability at Atlantic Canada Bulk Terminal x Upgrade Breakbulk Capability at Sydport x Phase 2 Development of Container Terminal at Sydport x Add Second Berth and develop adjacent parcels at Sydney Marine Terminal

The funding and implementation of these projects will be mostly borne by the private companies that own the land and marine businesses. However, there is the opportunity and need to cost share as well as get and leverage government financial support to reflect the economic benefits in jobs, taxes and revenues that are possible with more port activities in Sydney. An Action Plan for the implementation of the Ports of Sydney Master Plan is provided in Table 10-1.

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Table 10-1 Action Plan for the Ports of Sydney Master Plan

SHORT TERM ACTION PLAN

Action Responsible Party Remarks Expand MOU for Marine Seek funding for marketing Marine Group Group and government relations Hire Marketing Firm Marine Group Focus is breakbulk Pursue Environmental Coordinate with new Permits for Deepening Private/Government terminals of Channel Project Deepening Get Partners for Container Funding, rail and shipping Private Terminal co. required Terminal Plan for Coal Private Work with Xstrata Terminal Export

INTERIM TERM ACTION PLAN

Action Responsible Party Remarks Construct Phase 1 Coordinate with channel Private Container Terminal deepening Deepen Channel Private/Government Cost Sharing makes sense

Expand Coal Operation Private Dependent on Xstrata Install Dolphin System Will enhance terminal Private/Government Sydney Marine Terminal flexibility Upgrade Marine Atlantic Improvements to Federal Terminal Facilities Newfoundland ferry system Establish Port Commission, Recommend Governance Marine Group or not

LONG TERM ACTION PLAN

Action Responsible Party Remarks Construct Phase 2 Container Follows establishment of Private Terminal business Upgrade Breakbulk Private Both ACBT and Sydport Build Second Berth Capable of handling two Develop Adjoining Parcels Private/Government ships near Sydney Cruise facility

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Figure 10-1 Ports of Sydney Master Plan

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Atlantic Canada Cruise Association, MarketQuest Research Group Inc., Economic Impact of the Cruise Ship Industry in Atlantic Canada, December, 2002

Baechler, Fred E. Province of Nova Scotia Department of the Environment, Regional Water Resources, Sydney Coalfield, Nova Scotia, Halifax, Nova Scotia, 1986.

CBRM 2004. Municipal Planning Strategy and Land Use By-law Maps 1 and 2, January 17, 2004, Amended to March 13, 2007. www.cbrm.ns.ca/portal/services/departments/planning/Municipal_Planning_Strat egy.asp.

CBRM 2006. North End Sydney Land Use By-law Zoning Map, May 16, 2006, www.cbrm.ns.ca/portal/services/departments/planning/Municipal_Planning_Strat egy.asp.

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Lee, Kenneth 2002. Bedford Institute of Oceanography, Fisheries and Oceans Canada, Environmental Effects and Remediation of Contaminants in Sydney Harbour, Nova Scotia, Final Report, March 31, 2002.

Magee, Anderson & Associates Limited. Geotechnical Investigation, Proposed Outer Channel Dredging, Sydney Harbour, Nova Scotia Volume I, Prepared for Public Works Canada, Halifax, Nova Scotia, December 1987.

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Monette, Anne, MES, and Colman, Ronald, PhD. Genuine Progress Index for Atlantic Canada, The Ambient Air Quality Accounts for the Nova Scotia Genuine Progress Index, January 21, 2004

Neily, Peter D, Quigley, Eugene. Benjamin, Lawrence. Stewart, Bruce. Duke. Tony. Nova Scotia Department of Natural Resources, Ecological Land Classification, Report DNR 2003 -2, April 2003. http://www.gov.ns.ca/natr/forestry/ecosystem/elcpg1.htm.

Nova Scotia Department of Natural Resources 2004. Significant Habitats of Nova Scotia, http://www.gov.ns.ca/natr/wildlife/Thp/disclaim.htm

Sherman, Rexford B. Director of Research and Information Services, American Association of Port Authorities (AAPA). Seaport Governance in The United States and Canada, Alexandria, VA, No date.

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