N.W.T. gov't lays out $14M plan to run NTCL barges on the Mackenzie River

The N.W.T.'s Department of Public Works and Services is asking for about $14 million of territorial funding to operate barging services on the Mackenzie River, saying it plans to make that money back through barging revenue.

The department says there wasn't enough time to find a contractor to fully offer the service this year.

The Northwest Territories government bought the barging assets from struggling NTCL on Dec. 21, 2016. The company filed for bankruptcy protection in April of that year after racking up about $140 million dollars in debt.

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Paul Guy, deputy minister for Public Works and Services, said after purchasing the assets, the territorial government had five months before the 2017 barging season to inspect and inventory what exactly was purchased, register the vessels, develop a maintenance plan and sailing schedule, and then secure an operator for the assets.

"We quickly realized that it would be impossible to draft an RFP without having that basic information," Guy said.

"We would not have had sufficient time to go through a procurement process to get a turnkey operator for the assets."

Guy also said the department was not confident that, even with more time, a qualified operator would be found for 2017. In May, 2016, the territorial government issued a tender for petroleum supply and transportation and did not receive any compliant bids.

GNWT management, outside crew

For this year's resupply, the department has hired a "core program management team" that includes GNWT employees. It's also in talks with a marine crewing service to hire the workforce.

Those positions will not qualify as GNWT employees, and there is no legislation to ensure Northern hiring. However, Guy said given the expertise currently in Hay River, he expects the crewing service to hire locally.

For the $7.5 million purchase price, the territorial government now owns 82 barges, eight tugboats, a shipyard in Hay River, and a number of other vessels, buildings, and equipment.

Guy said the department will divest what is not needed.

While a tally on the value of the assets is still ongoing, the department believes the assets are worth a multiple of the purchase price.

The acquisition also included $1.5 million worth of seatainers (sea shipping containers), and $1 million in fuel.

The territorial government is also doing environmental assessments on the land it purchased. Some regular MLAs have voiced concerns that environmental liability could become a costly part of the acquisition. However, Guy said the department also purchased stacks of NTCL records and is hopeful some liability could be passed on to the federal government by way of the devolution final agreement.

In future years, Guy said the department will look for a turnkey operator, and may consider a revolving fund model for operational funding.