It only took about a decade, but the Â鶹´«Ã½Ó³»Fraser Port Authority (VFPA) has finally won approval for its controversial $3.5 billion container terminal expansion project at Roberts Bank.
Will it be worth the wait? And will the market justify the multibillion-dollar investment the Terminal 2 project will require?
In approving the project, the federal government noted that Terminal 2 plan had undergone a “robust and science-based environmental assessment conducted by an independent review panel” and that it can proceed subject to 370 legally binding conditions to protect the environment.
It added that the expansion project “will be key to supporting Canada’s economic growth over the coming years.”
Plans for the massive Terminal 2 port infrastructure project include doubling the size of the current 85-hectare Deltaport container terminal with offshore landfill. Once completed and in operation, Terminal 2 will add an estimated 2.4 million 20-foot-equivalent units (TEUs) of container cargo handling capacity for the Port of Â鶹´«Ã½Ó³»and increase that overall capacity on Canada’s West Coast by 30 per cent.
But the VFPA’s ambitious Terminal 2 expansion project has been the target of controversy and criticism since it was first proposed back in 2012.
Area residents and environmentalists claim that the container terminal expansion will negatively impact bird and fish habitat.
They have also questioned the need for such a large expansion of container handling capacity in the Port of Â鶹´«Ã½Ó³»and the already congested Metro Â鶹´«Ã½Ó³»area.
The most recent numbers for major West Coast ports servicing the transpacific trade routes compiled by shipping analyst John McCown show inbound traffic down 32.2 per cent in March compared with the same month in 2022. According to McCown, it marks the sixth straight month of double-digit declines for West Coast ports.
It also underscores what has been a gradual but to competing ports in Mexico and the Gulf of Mexico and along North America’s east coast.
The union representing Port of Â鶹´«Ã½Ó³»dockworkers has also opposed the project on several grounds.
In an open letter earlier this year to Prime Minister Justin Trudeau and the federal cabinet, the International Longshore & Warehouse Union Canada (ILWU) congratulated the federal government for successfully hosting the recent COP15 environmental summit but pointed to the VFPA’s $3.5 billion Terminal 2 expansion project as running counter to COP15’s aims to halt and reverse biodiversity loss by the end of the decade.
The ILWU letter quotes a 2018 Environment and Climate Change Canada (ECCC) opinion that characterized the environmental impacts of the Terminal 2 expansion as permanent and irreversible.
According to the letter, the ECCC reiterated in late October 2022, that despite the port’s attempts at mitigation, “the changes predicted as a result of the Project would likely constitute an unmitigable species-level risk to Western Sandpipers, and shorebirds more generally.”
The ILWU, also argues that the project’s sliding timelines and ballooning costs are a “major risk to all port tenants, operators and labour in an uncertain time.”
It also expressed concerns about Terminal 2’s automation and the subsequent job losses it would result in and the amount of money the port would need to borrow to finance the project.
Meanwhile, GCT Global Container Terminals Inc., which operates GCT Deltaport, has had a running battle with the VFPA over GCT’s alternative plan for container handling expansion at Roberts Bank.
It claims the VFPA initially rejected GCT’s expansion plan, which is cheaper and would add container-handling capacity incrementally rather than in one large increase, so the port authority can proceed with its more ambitious Terminal 2 project.
But the VFPA has maintained throughout its long and winding journey to win approval for Terminal 2 that the added capacity it will provide the Port of Â鶹´«Ã½Ó³»and Canada’s Asia-Pacific Gateway is needed for the expected increase in transpacific trade over the next decade.
Without expanded capacity, the VFPA argues, B.C. and the rest of Canada will continue to lose freight and trade business to competitors in the United States and Mexico.
It also estimates that Terminal 2 will generate tens of thousands of highly paid supply chain jobs, including 1,500 at the terminal and another 15,800 related off-terminal, and $3 billion in GDP annually once the terminal is operating. According to the VFPA, 18,000 construction jobs will be created over the estimated six years it will take to build Terminal 2.
However, the degree of automation that will be included in the terminal’s operations will in large part be up to the company chosen to manage Terminal 2.
Securing that operator will be another major VFPA challenge. The port authority has consistently maintained that it does not want Terminal 2 operated by either of the two companies that currently manage B.C.’s container terminals: DP World and GCT.
A third operator, it says, would help ensure healthy competition and provide more choice for major shipping lines calling on B.C.’s West Coast.
Finding that operator will be difficult.
Delays in Terminal 2 approval scuppered the VFPA’s original procurement process to build and operate the terminal. Its search for a terminal operator began in 2013, when the VFPA expected the federal environmental assessment process to be completed by 2016.
The inventory of global port and terminal operators with the resources and desire to take on the Terminal 2 project is extremely limited.
While the VFPA deserves applause for its patience and tenacity in sticking with its Terminal 2 game plan for close to a decade in the face of controversy, opposition and federal government delays, the real work in bringing the project to market and justifying the multibillion-dollar investment it requires has just begun.
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