Trans Mountain pipeline costs are adding up for Canadian government

first_img FacebookTwitterLinkedInEmailPrint分享National Observer:The Trans Mountain oil pipeline is costing a Canadian Crown corporation some staggering interest expenses that cast doubt on strong revenues from the infrastructure touted in the federal government’s recent economic update.The interest expenses were $20 million over a single month in September, right after Prime Minister Justin Trudeau’s government purchased the pipeline and related assets from Texas energy company Kinder Morgan for $4.5 billion. As part of the purchase, the government also had to set aside an additional $500 million as a security deposit in case of environmental damage, and this appears to be part of the interest expenses.If the interest expenses continue to pile up at that rate over the year, they will come to represent a larger sum than the amount of money that the government has said the pipeline is on track to raise this year primarily from toll charges.Oil pipelines earn revenues by charging tolls to companies that are shipping fuels on the infrastructure. The Trudeau government has said that the proposed Trans Mountain expansion project, if completed, would generate more revenues and could be sold back to the private sector, along with existing assets, as a profitable venture.In a new quarterly report, the Canada Development Investment Corporation (CDEV), the Crown corporation that now owns and operates the pipeline through a network of subsidiaries, said it incurred $21.27 million in interest expenses related to Trans Mountain during the third quarter ending Sept. 30.The pipeline from the oil patch to the west coast and its related expansion project was acquired by Ottawa in a deal that cleared Aug. 31. These two dates represent approximately a month’s worth of expenses, or $255.24 million over the year. That is well above the “over $200 million” that Finance Minister Bill Morneau’s fall fiscal update said the pipeline was on track to make in “earnings before interest, taxes, depreciation and amortization,” or EBITDA, a type of metric used in finance to show a performance snapshot. EBITDA doesn’t include things like capital investment costs or expenses linked to debt.Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis, co-authored a report in June with Kathy Hipple, a financial analyst at the institute and corporate finance lecturer at Bard College, stating that the Canadian government was facing at least $11.6 billion in costs to complete the pipeline. “This transaction and the cost of further planning and construction could add a $6.5 billion unplanned expenditure to Canada’s budget during FY 2019,” the report states, boosting Canada’s projected deficit by 36 per cent.Sanzillo told National Observer that while it is not uncommon for a government economic development transaction to keep revenues, capital costs and operational expenses separate, the interest expenses and fiscal update numbers represent an incomplete picture. “For a project of this size and importance,” said Sanzillo, “the executive has a responsibility to also produce an all-in-one, true and accurate inclusive project accounting that answers the question: ‘How much is this costing the Canadian taxpayer?’ These financial disclosures are partial, and absent a full accounting, are irrelevant. Because it is only a partial explanation, it says nothing about the financial viability of the project.”More: The Trudeau government’s Trans Mountain purchase has triggered staggering interest expenses Trans Mountain pipeline costs are adding up for Canadian governmentlast_img read more

“AFC has taken a sensible position” – Dr Hinds

first_imgLocal Govt Elections…as party plans to engage APNU to contest with coalitionThe decision taken by the National Executive Committee (NEC) of the Alliance For Change (AFC) to consider joining with the coalition parties to contest the Local Government Elections (LGE) under one ticket has been described as a sensible position that could help the Government.AFC Leader Raphael TrotmanPolitical analyst Dr David Hinds has said that the dynamics of the coalition meant that should the parties contest the elections separately, they would be fighting each other for the same voters.“And that could create bad blood among them, which would then make it difficult for them to come together for the general election a year or so later,” Hinds told Guyana Times on Sunday.He opined that it was hard to “convince people that you are serious about coalition politics if you fight each other at one election and then try to come together for another election”.According to Dr Hinds, the only attraction for the AFC to contest the LGE by itself is if it can be assured of getting a section of the Indo-Guyanese vote. However, Dr Hinds said, from all indications, that is a long shot, as it appears that the Indo-Guyanese vote the AFC got in 2015 has returned to the People’s Progressive Party/Civic (PPP/C).“So, from the standpoint of electoral survival, it makes sense for the AFC to want to avoid going alone. I think the party has finally confronted the tenuous electoral fortunes of third parties in Guyana.”The Working People’s Alliance (WPA) executive also thinks that if the AFC contests with the A Partnership for National Unity (APNU), it would be doing so from a weakened position. And unlike the case of the Cummingsburg Accord, it now has to demonstrate to constituencies to use that as a bargaining chip.Close to one month after announcing that it may break away from APNU/AFC for this year’s LGE, the AFC has now decided to reconsider.The party said this decision was made at the NEC, the second highest decision-making organ of the AFC, following a duly-constituted meeting on Saturday, February 17, 2018.“National Executive Committee (NEC) of the Alliance For Change (AFC) having met on February 17, 2018 at a duly constituted meeting, has mandated the Leader of the Party to engage the A Partnership For National Unity (APNU) in discussion that could see the parties contesting the 2018 Local Government Elections as a coalition,” the party stated.AFC Leader Raphael Trotman is now expected to write President David Granger outlining the party’s position on the way forward and specific issues that are of concern to the AFC.In January, Trotman told a news conference that, “There is a strong opinion of body within the party that we should go alone.” However, in the same breath, he said that there was another view that the AFC should seek to enter a new accord.The party leader explained that the Cummingsburg Accord that was signed between the AFC and APNU in 2015 was just to facilitate the General Election and did not include local elections.“We are currently assessing the views of the various party leaders here in Guyana and outside of Guyana, and we would have met with the APNU and other parties to get a sense … and make a decision well before the date is announced for Local Government Elections,” he added.The AFC has, of recent, come under fire for the perceived submissive role it played when it joined forces with APNU. In mid-November 2017, the top leadership of the AFC had decided to revise its governing agreement with its coalition partner. This decision was taken after the AFC – the smaller of the two groups forming the Government – was accused of being coerced by its large partner.Speaking about the discussions surrounding the review of this Accord, Trotman said that it was still on the party’s agenda and it has sought to get some other views to begin the process.“We have, in fact, identified a team that will represent us in upcoming talks, because, like I said, the Accord has a lifespan of a minimum of three years and a maximum of five. And it was geared primarily towards national elections. It was very silent on Local Government Elections,” he explained.During the recent NEC meeting, issues relating to the Cummingsburg Accord were discussed with the aim of critically analysing its operationalisation and the expectation of AFC members that “this still relatively new arrangement will concretise a new era of good governance and development in Guyana”.According to the party, the meeting also acknowledged that there were areas in the relationship that were working well and others that needed to examined, clearly defined and strengthened. An AFC team was identified to discuss these areas with APNU.last_img read more

2017 Embedded Market Survey

first_imgProduced by EETimes and Embedded.com, the 2017 Embedded Market Study continues an annual tradition stemming back over 20 years, with the sole exception of 2016, when organizational transitions and other events prevented the study from being fielded. Click here to see the report (pdf). Share this:TwitterFacebookLinkedInMoreRedditTumblrPinterestWhatsAppSkypePocketTelegram Tags: Industry, Profession Continue Reading Previous What’s the right channel count for mixed signal oscilloscopes?Next What is the NuttX RTOS and why should you care?last_img read more