Deal doesn’t add up

NANAIMO: Re: Critics float marina worries, Aug. 7.

To the Editor,

Re: Critics float marina worries, Aug. 7.

Responding to your request for opinions, may I therefore present current thoughts on this matter.

Since we only know what has been written in your newspaper, our insights may appear limited, but still relevant.

First: A 30-year lease is inappropriate. It’s a subtle way of selling off an asset, which could be worth more than $500 million, given time, design, engineering and architectural creativity.

The Nanaimo Port Authority locking itself into this box may mean its demise is imminent or desired.

There are lots of hypotheses that seem possible.

A public-private partnership platform has been surreptitiously described by some as symptomatic of corruption. Purveyors of these ideas seem to view the tax base as being for their personal use, and beyond city council decision.

Historically, in Canada, these types of contractual obligations never have worked, but for the advantage of the private individuals.

From the point of view of the port authority, it’s obvious $9 million is nothing to shrug off. Sometimes, though, one’s desperation can become one’s folly. How good is this? Let us see if this perspective gives anything relevant.

There can be a number of assumptions. Nine million dollars spent immediately; or $9 million spent intermittently. What is the net present value to the firm making the investment? My thinking is, $9 million may not be much of an investment.

There might be two ways to look at this –the net present value of the $9 million and the future value of this $9 million.

The range of interest rates considered can be from one to seven per cent. The latter is probably the more real. The Treasury Inflation-Protected charts show that TIP 10-year bonds are seven-per cent interest which implies a robust economy. This is prime rate, real rates may be much higher.

Is this a good deal for the lessor, and why? Is this a good deal for the port authority, and why? Not sure I can answer these questions completely.

We make some modifications, because I do not have access to 30-year records and calculations, so I am using 20-year calculations.

At seven per cent, the $9 million the potential lessor intends to spend is, in fact, $9 million times .258,  or $1.32 million.

At seven per cent, the $9 million the potential lessor intends to make is, in fact, $9 million times 3.870, or $37 million.

It depends on which direction the boat basin is to head.

If you look at various marina examples, it’s obvious many are substandard to Nanaimo’s Boat Basin. So what is the rationale for the $9 million investment? P3s are disguised as government and private sector involvement. In reality they turn out to be welfare for the rich, paid for by the tax base.

As it stands now, the deal would propose selling an asset (and that is what the port authority is in reality doing), for a modicum of return.

D. W. (Del) Fontaine

via e-mail

Just Posted

Young people graduating in COVID-19 times have shown resilience. (Stock photo)
Editorial: Class of 2021 has shown smarts and resilience

Congratulations and good luck to Grade 12s who have persevered during the pandemic

The Nanaimo Business Awards are accepting nominations now. (Greater Nanaimo Chamber of Commerce image)
Nanaimo Business Awards accepting nominations of worthy winners

This year’s awards aren’t until the fall, but the nomination period ends June 28

Retailers say they’re ready for the ban on single-use plastic checkout bags in Nanaimo when it takes effect July 1. (Chris Bush/News Bulletin)
Retailers report they’re ready for Nanaimo’s single-use checkout bag ban

Business operators say there’s been plenty of time to plan and prepare for bylaw that kicks in July 1

Nanaimo Fire Rescue crews on scene at a boat fire near the boat ramp at Long Lake on Sunday, June 20. (Greg Sakaki/News Bulletin)
Boat burns up on Nanaimo’s Long Lake, man and child unhurt

Jet skiers attempt to put out fire by circling around to spray water on burning boat

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Chilliwack secondary school’s principal is apologizing after a quote equating graduation with the end of slavery in the U.S. was included in the 2020-2021 yearbook. (Screenshot from submitted SnapChat)
B.C. student’s yearbook quote equates grad to end of slavery; principal cites editing error

Black former student ‘disgusted’ as CSS principal apologizes for what is called an editing error

Skeena MLA Ellis Ross. (Photo by Peter Versteege)
BC Liberal leadership candidate condemns ‘senseless violence’ of Okanagan church fires

Skeena MLA Ellis Ross says reconciliation isn’t about revenge for past tragedies

COVID-19 daily cases reported to B.C. public health, seven-day moving average to June 17, 2021. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infections drop to 90 on Sunday, 45 Monday

Pandemic spread dwindles as 77% of adults receive vaccine

John A. Read, who was inspired to leave his former career to become a professional astronomer by the purchase of a $13 telescope, will give beginning astronomers key pointers on how to set up and get the best performance from their instruments at Nanaimo Astronomy Society’s meeting June 24. (Photo courtesy Jennifer Read)
Astrophysicist will talk about getting the most out of a telescope at Nanaimo astronomy meeting

John Read’s purchase of a $13 telescope led to a degree in astrophysics and a career in astronomy

Emergency vehicles are parked outside of the Wintergreen Apartments on Fourth Avenue. (SUSAN QUINN / Alberni Valley News)
Port Alberni RCMP investigate stabbing on Fourth Avenue

Two men were found with ‘significant’ injuries near Wintergreen Apartments

A coroner’s inquest will be taking place at the Capitol Theatre in Port Alberni for the next week. (ELENA RARDON / ALBERNI VALLEY NEWS)
Teen B.C. mom who died following police custody recalled as ‘friend to many’

Police sent Jocelyn George to hospital after intoxication had gone ‘beyond the realm’ of normal detox

FILE - In this Nov. 29, 2020, file photo, Las Vegas Raiders defensive end Carl Nassib leaves the field after an NFL football game against the Atlanta Falcons in Atlanta. Nassib on Monday, June 21, 2021, became the first active NFL player to come out as gay. Nassib announced the news on Instagram, saying he was not doing it for the attention but because “I just think that representation and visibility are so important.” (AP Photo/John Bazemore, File)
Nassib becomes first active NFL player to come out as gay

More than a dozen NFL players have come out as gay after their careers were over

Penticton Indian Band Chief Greg Gabriel speaks to the Sacred Hearts Catholic Church burning down early Monday morning, June 21, 2021. (Monique Tamminga Western News)
Penticton band chief condemns suspicious burning of 2 Catholic churches

Both Catholic church fires are deemed suspicious, says RCMP

Most Read