The question remains – when will Seaway Valley Farmers Energy Co-operative
Inc. be building its 65 million litre per year ethanol plant in Cornwall, Ontario.
That was the question on the minds of shareholders at the co-operative’s
annual meeting on September 27.
Seaway
President Bud Atkins (right) with Federal Agriculture Minister Lyle Vanclief
Seaway President Bud
Atkins reported that the project “remains on the edge of financial closing,
with all of the required financing commitments and contractual arrangements in
place and most, but not all, of the documentation completed and agreed to by all
the parties.” Atkins says the major delays over the past year have come from
external factors or have occurred in trying to reach agreement on documentation
acceptable to DG Bank on contracts between Seaway and its various vendors and
customers, particularly the Engineering Procurement Construction Contract and
Facilities Management Agreement.
The escrow agreement with the Ontario Ministry of Agriculture, Food and Rural
Affairs (OMAFRA) has been extended to April 30, 2002 and now contains over $3.7
million. “The ministry has been very supportive of the project,” says
Atkins. Agreements with the Agricultural Adaptation Council and Natural Resources
Canada are also finalized.
The terrorist attack on the World Trade Centre (WTC) had a major impact on the
Seaway Valley project. The insurance broker for the project was located in the
WTC and 315 of the 1600 employees and guests lost their lives in the tragic events
of September 11. Not only will the situation cause a delay in the final documentation,
but it is unclear what the insurance implications will be.
Atkins also reported on much more positive news provided by Natural Resources
Canada. The federal government has put ethanol, for transportation fuel, high
on the agenda for an expansion of production. Ethanol is viewed by the government
as an important ingredient in its war on Global Warming. The government would
like to see the amount of ethanol produced in Canada reach well over a billion
litres, amounting to 25 per cent of all Canadians operating their vehicles on
5-10 per cent blends.
