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$7 billion in St. Lawrence shipping upgrades set sail

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by Richard Gilbert

A capital investment of about $7 billion is being spent on the Great Lakes-St. Lawrence shipping system in Canada and the United States, which involves asset renewal and improvements to this critical piece of transportation infrastructure.
The Welland Canal connects Lake Ontario and Lake Erie by traversing the Niagara Peninsula from Port Weller to Port Colborne. The canal is a key section of the St. Lawrence Seaway, which allows ships to ascend and descend the Niagara Escarpment and bypass Niagara Falls.
The Welland Canal connects Lake Ontario and Lake Erie by traversing the Niagara Peninsula from Port Weller to Port Colborne. The canal is a key section of the St. Lawrence Seaway, which allows ships to ascend and descend the Niagara Escarpment and bypass Niagara Falls. - Photo: THE ST. LAWRENCE SEAWAY MANAGEMENT CORPORATION

"These private and public investments are a tremendous show of confidence in the future of the Great Lakes Seaway, a transportation gateway facilitating $35 billion in trade and supporting 227,000 jobs in the U.S. and Canada," said Stephen Brooks,  Chamber of Marine Commerce president.

"To keep that momentum going we will be working closely with our stakeholders and governments to make sure the right regulatory and investment climate exists for further economic growth and environmental improvements."

The Great Lakes St. Lawrence Seaway navigation system supports the activities of more than 100 ports and commercial docks located in the provinces of Ontario and Quebec, as well as eight U.S. States.

Given the importance of this infrastructure to the North American economy, Martin Associates was hired by a coalition of stakeholders in the maritime industry to undertake a survey that quantifies the level of investment in the navigation system over the past five years.

One of the most important findings of the survey is that C$7.1 billion in capital spending is being invested on ships, ports and terminals and waterway infrastructure in the Great Lakes and St. Lawrence system.

In total, capital investments being made in port and terminal facilities and waterway infrastructure total C$ 3.0 billion.

Out of this total, $1.754 billion is being invested in ports and terminals. This sector is defined to include major wharf and dockwall repairs, improvements to truck or rail access, upgrades to loading/unloading equipment, upgrades to on-site buildings, and other on-site work such as new or upgraded lighting, fencing, utilities, paving or security measures.

In addition, $1.242 billion is being invested in waterway infrastructure, which includes upgrades to locks and breakwaters, navigation aids, dredging for deepening purposes only and confined disposal facilities for dredge material placement.

The largest share of this investment ($4.1 billion) is non-construction spending by Canadian, American and international ship owners on the biggest renewal of the Great Lakes fleets in 30 years.

The total of C$7.1 billion being spent on asset renewal and infrastructure improvements is also broken down into actual and committed investment.

A total of about C$4.8 billion was invested in ships, ports and terminals and waterway infrastructure between 2009 and 2013.

An additional C$2.3 billion in capital spending has been committed for future infrastructure investments by companies and governments.

Future capital expenditures were defined as those in which a respondent had money available and allocated in its budget for the coming years. Projects that were part of a strategic plan were not included in this analysis unless already contracted for with funds set aside for their completion.

Public sector investment in ports, terminals and waterway infrastructure was a total of C$2.1 billion. This is 71 per cent of the total investments between 2009 and 2013 and committed post-2013.

Capital investments made in facilities and equipment at U.S. and Canadian ports and terminals totalled C$1.3 billion between 2009 and 2013. An additional C$0.5 million has been committed for future capital spending.

Capital investments in waterway infrastructure between 2009 and 2013 total C$0.6 billion. An additional

C$0.6 billion (US$0.6 billion) has been committed for future investments in waterway infrastructure.

In Canada, a total of about $3 billion in capital spending is being invested in ports, terminals and waterway infrastructure. Ontario accounts for C$996 million and Quebec is C$1.18 billion.

To carry out the survey, Martin Associates developed a list of 628 individual companies and government agencies engaged in some aspect of Great Lakes-Seaway maritime commerce.

Of the 628 stakeholders contacted, 454 were willing to participate in the survey and provide investment data. This represents a response rate of about 72 per cent.

The geographic area covered by this survey includes investments in all portions of the Great Lakes-St. Lawrence Seaway navigation system from Duluth, Minnesota in the west to Sept-Îles, Quebec in the east.

The Chamber of Marine Commerce is a bi-national association that represents more than 150 marine industry stakeholders including major Canadian and American shippers, ports, terminals and marine service providers, as well as domestic and international ship owners.

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