N.W.T. government makes $4.5M bid to buy assets of NTCL

The Northwest Territories government is offering to buy what's left of Northern Transportation Company Ltd.'s viable assets for $4.5 million.

The territorial government says it wants to ensure the continued summertime supplyof crucial fuel products and dry goods by barge to several N.W.T. communities along the Mackenzie River and Arctic coast.

"These are rather unique assets. We wouldn't want to see them leave the territory," says John Vandenberg, an assistant deputy minister for theN.W.T.'s Department of Public Works and Services, who calledthe bid "prudent" and "not overly expensive."

"Having these assets is one way to help manage the cost of transportation," he added.

The government's surprisingoffer comes as lawyers in Alberta debate an Edmonton company'searlier, substantially lower bid of $2.2 million for the assets.

• ANALYSIS|The trouble at NTCL: 5 things you need to know
• Eyeing 2017 shipping season, N.W.T. gov't plans for life after NTCL

What led to the government's bid

NTCL filed for bankruptcy protection in April. The rapidly dissolvingmarine shipper, which is owned by the business arm of the Inuvialuit Regional Corporation, owes a syndicate of banks$130 million.

In an effort to pay back a meagre portion of that money, NTCL has sold off some its tugs and barges, so far raising $5.8 million.

Today in court, NTCL's lawyers will ask Alberta JusticeBarbara Romaineto approve the sale of another 12 ships, 72 barges and various equipment to 2006647 Alberta Ltd., which was only registered as a corporation on Nov. 23.

That deal, if approved, would generate another $2.2 million, for a total of $8 million for the banks.

But the territorial government says its bidfor those assets, plus NTCL's Hay River shipyard, is superior and of more value to the banks.

NTCL which is poised to either file for bankruptcy or simply become dormant has delivered dry cargo and fuel down the Mackenzie River and along the Arctic coast for decades.

The fuel is essential: it heats homes, helps generateelectricity and is used in planes and other vehicles in Lutsel K'e, Tulita, Fort Good Hope, Inuvik, Tuktoyaktuk, Sachs Harbour, Paulatuk and Ulukhaktok. A substantial amountof food and other dry cargo also makes it way to these communities via NTCL barges.

Vandenberg says the government, in offering to buy up NTCL's assets, is not interested in becoming a marine transportation company.

"We would probably go out with a request for proposals for operation of [the assets]," he said.

Concerns about Alberta bidder

In anaffidavit filed alongside the government's offer, Derrick Briggs, the N.W.T.'s director of fuel services, admits to some skepticism about the original$2.2-million offer and the intentions of those making the offer.

The proposed deal with 2006647 Alberta Ltd. certainly wasn't the one NTCL originally had in mind.

NTCL had initially lined up Edmonton-based Flight Fuels Inc., which delivers fuel by truck, to buy its assets.

Flight Fuels is no stranger to the territorial government: it was the only company to place a bid this year when the government sought a new company to take on the fuel transportation contract formerly held by NTCL. The government ultimately rejected Flight Fuel's bid as "non-compliant."

Partly because of that unsuccessful bid and partly because of Flight Fuel's concerns about "possible environmental liabilities" Flight Fuel's deal to take over NTCL's assets fell through this past fall.

• What NTCL did with 'the worst of the environmental concerns' in Hay River

Then came an unsolicited, $2.2-million offer from 2006647 Alberta Ltd in November, an offer made outside the court process and that struck the N.W.T. government by surprise.

Thenewly-registered numbered company appears to have ties to Flight Fuels.

2006647 Alberta Ltd.'s sole director is Craig Symons, whose address matches that of a Flight Fuels location advertised on Flight Fuel`s website. Symons is also listed on Flight Fuel's contact page.

"To the best of my knowledgeFlight Fuels is a fuel broker and has no background or experience in marine transportation," wrote Briggsin his affidavit.

"I am concerned that Flight Fuels may not have the capacity or the experience to undertake marine transportation on the Mackenzie River or the Arctic coast or may opt to sell specialized assets needed for navigation on the Mackenzie River and ship them elsewhere."

Also of concern to Briggs: the fact that Flight Fuelsis not interested in the Hay River shipyard.

"This property is essential for the dispatch and shipment of dry goods by barge," wrote Briggs. "It may indicate that Flight Fuels has no intention of servicing the Mackenzie River and Arctic coast with respect to dry goods."

Symons did not respond to requests for comment.

• IN DEPTH |NTCL offers workers severance deals. The catch? No badmouthing the company

'Substantial remediation risks'

Regular MLAs were told about the government's rival offer on Tuesdayafternoon, says Julie Green, the MLA for Yellowknife Centre.

Green says she's concerned about the risks that come with buying the shipyard.

"There are substantial remediation risks associated with the NTCL yard because of the time it has been in operation," said Green, pointing to NTCL's 85-year history, which includes the shipment of uranium ore on ships now stored at the shipyard.

Asked if he's worried about what the government couldfind at the shipyard if its offer is approved over that of 2006647 Alberta Ltd., Vandenberg said the government confined its bid to "specific, unique properties" at the shipyard needed to continue operations.

"We felt that by doing that,we would minimizethe potential," he said.

It's not clear when Justice Romaine will decide who will get their hands on NTCL's assets.