The Standing Committee on Governance and Economic Development met with the Minister of Transportation and his staff on January 17, 2005, to review the Department of Transportation's draft main estimates for 2005-2006.
The Department of Transportation's mandate is to provide for the safe, accessible and reliable movement of people and goods throughout the Northwest Territories.
Deh Cho Bridge Corporation
The Deh Cho Bridge is being built through a public/private partnership arrangement between the GNWT and the Deh Cho Bridge Corporation. The Deh Cho Bridge Corporation will raise the capital, design, build, operate and maintain the Deh Cho Bridge. The Government of the Northwest Territories will pay the corporation for the bridge over a 35-year period, largely from toll revenues collected from the traffic crossing the bridge and savings from discontinued ferry operations and winter road construction.
The Deh Cho Bridge Act authorizes the Minister of Transportation on behalf of the government to enter into a concession agreement. The concession agreement gives the concessionaire, the Deh Cho Bridge Corporation, the right to operate a section of the public highway for 35 years. The concession agreement is also a private business deal between the Deh Cho Bridge Corporation and the government.
The committee is uncertain how many of the agreement's details will be released publicly. This concerns the committee because the cost of the Deh Cho Bridge may exceed the current estimate of $57 million. Some estimates indicate bids could go as high as $75 million. A tender package for the bridge has yet to be developed. The price of raw steel has also risen substantially since the project was proposed.
A significant cost increase to construct the bridge could impact and increase the bridge tolls the GNWT has to collect to pay for the bridge. An increase to the tolls may mean communities north of the bridge may have to pay more for goods and services than current prices, that are already high due to transportation costs.
Transparency and accountability must be maintained in this and any future public/private partnerships.
Recommendation
The committee recommends that it be given the opportunity to review the concession agreement before it is finalized;
And further, that the government declare a maximum dollar figure, above which it will reconsider its involvement in the project.
Airport Development
Mr. Chairman, traffic is increasing at the major airports in the Northwest Territories. NAV Canada data shows that there has been an overall seven percent increase in aircraft arrivals and departures. This means that just under half-a-million passengers traveled through NWT terminal buildings. In the future, DOT anticipates an overall further three percent increase in airport traffic.
In order to accommodate this growth, the Yellowknife Airport may have to expand. However, land is at a premium and there is only a small land reserve to the west of the airport on which it can expand. Otherwise, the airport is bordered by a highway, a lake and valuable infrastructure.
Moreover, private corporations, the city and the federal government all have an interest in the land immediately adjacent to the airport, and not all of this development is conducive to airport activities.
This committee feels that it would be unfortunate if the airport were prevented from expanding because of a land shortage. Not only could this adversely affect the economic growth of territorial industries like tourism, but it could also force the GNWT to pay millions of dollars by having to relocate the airport to a larger area.
The committee recommends that the Department of Transportation exercise caution and work with the City of Yellowknife to protect the interests and the future needs of the Yellowknife Airport.
Runway Extension Research
The Japanese spent an estimated $16 million last year in the Northwest Territories. However, the NWT is not the only place in the world from which to view the aurora borealis. The NWT is going to have to be competitive with other circumpolar destinations if it wants to continue to reap the benefits of Japanese tourism. Fairbanks and Whitehorse can accommodate direct flights from Japan, but the Yellowknife Airport cannot.
Extending the runway in order to accommodate circumpolar flights was looked at as part of the Yellowknife Airport development plan. Although the existing runway currently meets the needs of the carriers, extending the runway could be very advantageous to tourism by allowing direct flights to land from Japan or anywhere else in the world.
The committee is very interested in the potential of this initiative and will be reviewing the work and research on expanding the airport runway.
Combined Services Building
DOT is building the combined services building in order to amalgamate several of the activities that the department undertakes. The committee commends the Department of Transportation for this amalgamation, but believes that the department could go one step further by combining the DOT yard with the combined services building. It is located in close proximity to the highway and, therefore, convenient to house highway equipment.
In order to preserve resources and the limited land at the airport, the committee would like to encourage DOT to consider co-locating their highway and airports buildings.
Community Aerodrome Radio Station Program
At the end of this fiscal year, the Department of Transportation will no longer deliver CARS, the community airport radio services, on behalf of NAV Canada. The department has worked with NAV Canada to orderly transfer the CARS program to a private sector contractor. CARS will convert to private sector delivery on April 1, 2005.
When the Department of Transportation operated the CARS program, it provided air navigation services at 17 airports and accounted for more than 30 full-time jobs at the community level in the NWT.
The committee recommends that the Department of Transportation work closely with NAV Canada and the new contractor to ensure services continue to be delivered at a high level and that northern contractors and northern employees are used to continue to carry out the work.
Highways Chipseal Overlay Project
The Department has a $3 million a year budget for their highway chipseal overlay project. With that $3 million, DOT maintains and rehabilitates existing chipseals.
The committee is unsure of the value of repairing chipseal when road widening, ditching and culverts are needed. On Highway No. 6 out of Fort Resolution, for instance, the highway is narrow and heaving and there are no ditches. This section of road does not have any chipseal overlay to repair. Reconstruction dollars are what is required in order to undertake improvements to protect the safety of the cultural camps, schools and residents that use this road everyday. In the interest of public safety, highways should always be built with budgets attached to them for maintenance and repair.
Recommendation
The committee recommends that the Department of Transportation revisit their chipseal overlay project and look at diverting these funds to much needed highway reconstruction projects. Thank you, Mr. Chairman.