Two new laker-sized vessels being built for CWB by a Chinese shipbuilder will likely be working on the Great Lakes by next year.
Construction of the new lakers is underway in China with completion of the first ship slated for late 2013 or early 2014.
“There have been slight delays with regards to the shipyards in China, but those vessels are being built,” said CWB president Ian White during an Oct. 17 conference call.
“We do expect that the first of the CWB vessels will be delivered to us … around about the end of this year and the second vessel will be a couple or a few months after that.”
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The CWB lakers were part of a larger ship order placed in 2011 that also included six vessels to be owned by Algoma Central Corp. and Upper Lakes Group.
The CWB investment, originally estimated at $65 million, was approved by farmer elected CWB directors just months before federal legislation was passed to end the wheat board’s single desk marketing powers.
The first ship will be delivered to CWB in China around the end of 2013 and is expected to arrive in Canada in early 2014.
The trip from China to Canada is expected to take about eight weeks.
Algoma has reached an agreement with CWB to operate the ships on the grain company’s behalf.
The vessels will haul grain, oilseeds and other cargo and will operate alongside other ships in Algoma’s expanded Great Lakes fleet.
“We do expect to have the first (CWB) vessel in service for the full season on the lakes next year and the second for at least part of the season,” White said.
The purchase of two laker-sized vessels created a stir in 2011, largely because of its timing.
When CWB announced the deal in early 2011, a majority of CWB directors were vocally opposed to Ottawa’s plan to eliminate single desk marketing, a move that was widely anticipated by the Canadian grain industry.
Despite uncertainty surrounding the CWB’s future, wheat board directors approved the $65 million expenditure, suggesting the vessels would save the board $10 million per year in reduced shipping costs.
At the time, wheat board directors said the expenditure would be spread over four years and be financed with a $13 million down payment taken from CWB pool accounts.
In the Oct. 17 conference call, White did not say how much is still owing on the ships.
Federal agriculture minister Gerry Ritz said in November 2011 that Ottawa had no intention of cancelling the CWB order but instead would allow the ships to be built and then sell them to recoup the costs.
“It would cost more to cancel than to recoup so the best advice we have is to let the contract revolve and at some point let it be known they will be for sale,” Ritz told reporters at the time.
“We’ll do it in the best interests of farmers so they don’t get caught. We’ll do our damnedest to make sure the pool monies don’t get pirated.”
