Good afternoon and thank you for coming. My name is Gordon Houston, and I am President & Chief Executive Officer of the Vancouver Port Authority.

This is a very important day for our port. Not only are we welcoming P&O Ports the new owner of Casco Terminals and the Canadian Stevedoring Company to the Port of Vancouver family.

We're also here to announce the first phase of container expansion at Port Vancouver. Over the next 10 12 years, the expansion of container terminals and container traffic at our port has the potential to generate tens of thousands of new jobs, and billions of dollars in new economic activity.

In fact, we at the Vancouver Port Authority believe our port presents one of the brightest opportunities for job creation and economic regeneration in B.C.

There are many challenges to be overcome. But the promise of container expansion at the Port of Vancouver will benefit all of our workforce, communities, families and businesses across western Canada.

And it all begins today.
I'd like to take a moment to welcome the special guests who are with us this afternoon. First let me present our speakers today.

They are:

B.C.'s Transportation Minister, the Honourable Judith Reid; Morley Strachan, Director of Marketing & Strategic Planning for TSI Terminal Systems Inc.; Robert Woods, Chairman of P&O Ports and a member of P&O Steamship Navigation Company board of directors; and, I would also like to acknowledge from the audience our special guests Robin Silvester, President & CEO of P&O Ports Canada; John McLernon, Chairman of the BCR Group of Companies; Ed Dodge, Executive Vice President and Chief Operating Officer of Canadian Pacific Railway; Representatives from Canadian National; And members from the Vancouver Port Authority Board of directors; Wayne Hartrick; Robert Friesen; and, Audrey Sojonky.

As you may know, P&O Ports announced that it would acquire Casco Terminals Ltd. and the Canadian Stevedoring Company Ltd. from BCR Marine just last month. Casco Terminals operates one of three container terminals owned by the Vancouver Port Authority Centerm, where we are this afternoon.

This is an important transaction in its own right. It is a major investment in the Port of Vancouver by one of the world's leading terminal operators in the international marine transport industry.

It represents a vote of confidence in the future of our port, and in the future of Vancouver and British Columbia as a transportation gateway to North America and the Pacific Rim.

And I'd like to formally welcome P&O Ports to the Port of Vancouver. Robert, I am confident that we will build a rewarding and prosperous future together.

Of course, the investment that P&O Ports will make in Port Vancouver is just the beginning.

For those of you who aren't familiar with the container business at Port Vancouver, and the future growth potential that container traffic represents for our port, allow me to give you a little background.

Over the past seven years, container volumes at the Port of Vancouver have nearly tripled from 500,000 to almost 1.5 million TEUs (or 20-foot equivalent units). Over that timeframe, our Port has secured about 80 per cent of the growth in the Pacific Northwest container market.

It's an impressive record, and it has had a significant positive impact on the economies of Greater Vancouver, British Columbia and western Canada as a whole.

Containers are not the largest segment of our business at the Port of Vancouver. In fact, they represent just 20% of our shipments by volume, with bulk and general cargo representing the other 80%, that's 60 million tones per year.

But container traffic is certainly the fastest growing segment of our business. As such, the Vancouver Port Authority has identified future growth in container volumes as a priority business objective for our port.

I said that 1.5 million TEUs of container traffic moved through the Port of Vancouver in 2002. That was a record high. By the year 2020, we believe the Port of Vancouver will handle 4 million TEUs almost triple our volumes today.

Combined with growth in other business segments, container expansion has the potential to generate 50,000 new jobs and $3 billion in additional GDP. That's why we believe the Port of Vancouver represents one of the brightest prospects for economic renewal in British Columbia.

It won't be easy. We've got a lot of work to do and challenges to overcome if we are to achieve our vision. But I'm very excited about the critical first step we're celebrating here today.

This afternoon, we are announcing the first phase of container expansion at the Port of Vancouver. Over the next two years, private sector investment undertaken by TSI and P&O Ports will add an additional 360,000 TEUs to our port's existing container capacity.

These increases will be achieved by enhancing the productivity of existing terminals at Vanterm and Centerm, as well as expanding the physical capacity of both facilities.

I should add that expansion of container capacity at Centerm will not come at the expense of the terminal's non-container customers.

Centerm currently handles almost half a million tonnes of export-bound wood pulp from Weyerhaeuser mills in western Canada and Washington State. Centerm will continue to provide this vital service.

But by bringing an additional 360,000 TEUs of container capacity online by 2005, we will increase the total container capacity at Port Vancouver by some 20 per cent.

These capital projects will coincide with a period of significant container growth on the Pacific Coast of North America. As such, we fully anticipate that the growth of container traffic at the Port of Vancouver will maintain its fast pace with attendant benefits for our provincial and national economies, and everyone involved in the business.

I have said that there are many challenges to overcome. And I want to touch on some of those challenges before we're done here this afternoon.

But before I do that, I'd like to turn the floor over to our special guests.

In a few moments, the two terminal operators with us today P&O Ports and TSI will speak about their business objectives and capital investment strategies at the Port of Vancouver.

I'd like to mention just how pleased the Vancouver Port Authority is with the strong commitment both companies are demonstrating to our port and its future. It confirms my belief that the Port of Vancouver is a globally attractive investment opportunity, and a critically important component of the growth for the B.C. economy.

Before we hear from the terminal operators though, it's my honour to introduce another distinguished guest. With us today to offer a few remarks on this noteworthy occasion is the Honourable Judith Reid, B.C.'s Minister of Transportation.


(Remarks from Honourable Judith Reid, BC's Minister of Transportation, Robert Woods, Chairman of P&O Ports and a member of P&O SN Co. board of directors; Morley Strachan, Director of Marketing & Strategic Planning for TSI Terminal Systems Inc.


Before we wrap up, I'd like to make a few comments about the news we've shared with you today.

I talked earlier about the socio-economic benefits that capital expansion at the Port of Vancouver can deliver in the years ahead. About the 50,000 new jobs, $3 billion in GDP and hundreds of millions of dollars in new tax revenues.

I believe wholeheartedly that we can achieve these targets. And I'm pleased to say that our partners here today TSI, P&O Ports, and the Government of B.C. believe in the promise of the Port of Vancouver as well. I'd also like to acknowledge our other key partners at the port of Vancouver who will make this phase and future phases of the expansion possible. They include Canadian National and Canadian Pacific Railways Canada's two national railways.

The Port of Vancouver has two national carriers, which distinguishes us from most west coast ports. Both CN and CP are continental leaders in efficient and safe transportation in North America. They are customer focused, time sensitive, and very critically to the port -- moving goods faster to central Canada and the U.S. faster that our U.S. counterparts. Thank you for your ongoing support.

Today's announcement is a major step forward. But there is a tremendous amount of work left to do and serious obstacles to overcome if we are to achieve our 2020 Vision for the Port of Vancouver.

Increasing the Port of Vancouver's container traffic capacity by 20% through strategic investments at Vanterm and Centerm is critically important to our future. But it's not nearly enough.

By 2005, the Port of Vancouver will have about 2 million TEUs of container capacity. To achieve our 2020 Vision for the port, we'll have to double that capacity to about 4 million TEUs over the next 10 years.

And then there are the capital investments necessary to accommodate future growth in our cruise ship business, as well as our bulk and general cargo areas. Clearly, there is a lot of work to do.

And let me be clear. The Port of Vancouver must invest and grow. We have no choice.
Not only is it important to create jobs and wealth for our communities. But we must also remain competitive to facilitate Canada' trade with Pacific Rim nations trade that totalled nearly $30 billion at the Port of Vancouver last year.

If we don't invest and we don't grow, container traffic in the Pacific Northwest will increasingly go to competitive ports in the United States.

Not only will we lose the opportunity to create new jobs and new opportunities for British Columbians. But these competitive US ports will begin to take away our existing business.

The Port of Vancouver is the largest port by volume on the west coast of North America today. And we intend to keep it that way.

But there are a number of compelling issues we must overcome if we are to achieve our 2020 Vision for the port.

There are necessary changes to the Canada Marine Act to ensure that the Vancouver Port Authority has the money it needs to finance capital expansion.

We are actively working with the federal government to achieve these critically important amendments to the Act right now.
There is the issue of municipal property taxation a level of taxation that threatens the viability of port businesses today, and capital expansion tomorrow.
We are actively working with the Government of B.C. as well as the eight municipalities that host Port of Vancouver properties and our tenants toward a mutually acceptable solution to this problem.

Finally, there is the issue of securing capital to acquire port lands and infrastructure necessary to achieve our growth forecast to 2020.

I estimate that total capital expenditures at the Port of Vancouver from both public and private sources will approach $2.5 billion over the next 10 12 years.

Clearly, this is one of the most significant investment opportunities in British Columbia today. And it has the potential to pay for itself many times over.


I am confident that, working together, we can build on the momentum of today's announcement to secure our Vision 2020 growth strategy for the Port of Vancouver.


I don't want to leave anyone with the impression that it will be easy. There are some very serious issues facing our port today legislative issues, taxation issues and, most importantly, the need to secure adequate capital for infrastructure expansion.

But working together, we can achieve our goals. I encourage you all to become a part of the movement to achieve our Vision 2020 growth strategy for the Port of Vancouver.


I'd like to thank the special guests who participated in today's event:

B.C.'s Transportation Minister, the Honourable Judith Reid;
Robert Woods, Chairman of P&O Ports;
Robin Silvester, President & CEO of P&O Ports Canada;
Morley Strachan, Director, of Marketing & Strategic Planning for TSI Terminal Systems Inc.; and,
John McLernon, Chairman, BCR Group of Companies
Ed Dodge, Executive Vice President and Chief Operating Officer, Canadian Pacific Railway
Canadian National Railway

Thank you all for coming.

For more information, please contact:

Anne McMullin,
Director, Corporate Communications and Public Affairs
Vancouver Port Authority
(604) 665-9069 (office)
(604) 665-9073 (fax)
(604) 218-1403 (cellular)
anne.mcmullin.com

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