Did Alinda's Detroit/Windsor Tunnel Deal Give It All Away
It is all becoming clearer now since we are getting down to the short-strokes on the border file and the players are starting to make their moves. Is the Alinda Tunnel deal the key to explaining everything and understanding who is allied with whom?
We know who the "enemy" is but who has ganged up together to fight them? Will we be shocked when we find out who has been working with whom behind the scenes for so many years so that we can say now we understand the last four years of hell in Windsor?
It's weird how quiet everything is all of a sudden. Imagine the noise if it was the Bridge Co. taking over the Tunnel's operation (Hmmmm I thought their deal with Detroit was only "tabled." The Bridge Co. might still get the Tunnel operation after all. Wouldn't that be funny!) Is there now a list of "good" private operators and "bad" private operators?
Was national security at stake for Canada with the Alinda deal? Where's Brian Masse screaming at Transport Canada about a change in the Detroit/Windsor Tunnel control and no action on their part? I am shocked at his silence on something so fundamental. Where's the Transport Minister doing something with his newly, Royally Assented Bill C-3? Does the Transport Minister even know where Windsor is? Where's the Mayor, where's the WTC , where's Council, where's anybody?
To be direct, I am not sure if very many people really know what is going on at the Tunnel and where the changes have been made. Shouldn't someone know? At least to keep US Customs advised given that the Tunnel is a unique security risk.
The Star finally has reported about Alinda now operating the Tunnel. You, dear reader, were alerted to that long before by this BLOG. And as is a Star practice in some cases, the big news is buried at the end of a story on tunnel queuing, a completely different topic.
Hardly anything was said. Why? A lot was written when the Bridge Co. tried to do something at the Tunnel.
Now shouldn't we expect more from the Star than Alinda is in New York (checking their website says that) and that "The change is not expected to have any impact on tolls." Gee, I wonder why the Star asked that question.
Now if I had had the chance to interview Neal, I would have asked the following questions:
- Is Alinda the operator for both Detroit and Windsor
- If not, for which side
- For what period of time is Alinda the Operator
- Did Alinda pay any money to Windsor or Detroit and if so, how much
- Has Alinda guaranteed Tunnel revenues
- Does Alinda agree to pay a guaranteed amount to the Cities
- Considering that the Tunnel operation was shown on Macquarie's books at $70M, how much did Alinda pay for it
- How can Alinda pay all of that money and not raise tolls given the drop in traffic
- What assurances can we be given that NO toll increases will take place here given what Alinda did in Alabama
- How will Alinda increase the traffic at the crossing
- Is the Tunnel exhaust scrubbed
- Has the Tunnel's unique security risk been solved to the satisfaction of US Customs
- Considering that vehicles can queue within the Tunnel, do we need to spend $30 million on Tunnel Plaza improvements
- I know that you have made presentations about how to move traffic through the Tunnel more quickly. How much would your improvements cost and why has your suggestion not been made part of the EA study?
I am sure that I could dream up a whole bunch more if I tried. Heck, if I was doing the Star story I probably would have called up the Mayor and all of the WTC members and asked them what they thought of the deal and when and how they found out about it! That would make a story in itself since one person I dealt with had NO idea what I was talking about when I mentioned Alinda!
Now here is something really funny that you might wonder about. I would ask this of Transport Canada or perhaps the Department of Justice who retains outside lawyers on behalf of Government Departments. Did they do a conflicts check on their Detroit law firm? Now those Government lawyers are pretty thorough and must have a checklist of questions to ask when a firm is hired to do a high-profile file. They must have done one and satisfied themselves that there were no problems.
Here is why that question is important. Remember when the Bridge Co. tried to become the operator of the Tunnel. We read the following:
- "Feds threaten to sue Detroit
Windsor Star 11-30-2005
The Canadian government has threatened Detroit with legal action if it approves the Ambassador bridge's bid to take over the U.S. side of the Windsor-Detroit tunnel...
The federal government's concerns were raised in a letter sent by the law firm Honigman, Miller, Schwartz and Cohn -- the Canadian government's legal counsel in the U.S. -- to the City of Detroit...
"The (federal government) letter reaffirms support not only from our perspective, but also from a national perspective," Francis said."
Remember that law firm name for a few minutes.
How many of you spotted in the ad in the Detroit papers that I Blogged the other day the two names, "Detroit & Canada Tunnel Corp." and "Detroit Windsor Tunnel LLC."
I started doing some research on those companies and guess what I saw---Honigman, Miller, Schwartz and Cohn were involved with the Certificate of Merger between Macquarie North American Infrastructure Inc and Detroit Windsor Tunnel LLC on May 12, 2006 and one between the Detroit & Canada Tunnel Corporation and Detroit Windsor Tunnel LLC on May 12, 2006.
For the heck of it, I checked out the Detroit & Canada Tunnel Corporation. Honigman, Miller, Schwartz and Cohn were involved with the Restated Articles of Incorporation of the Company back in 1991.
I had no idea what all of this meant to be honest or how much work the law firm did. I wondered though if the law firm had done legal work for DCTC for all of this time. Had there been a hiatus between 1991 and 2006? Those were interesting questions to ask. I sent an email to both Gordon Jarvis and Neal Belitsky of DCTC (or is it now Alinda) asking the questions but did not get back an answer.
The reason for the questions was that if the Honigman firm was acting for DCTC at the time when a threatening letter was to be sent by the Government, how could it act for the Government of Canada too? If it was not acting for DCTC during the period, then presumably there is no issue. But if it was, why would the Government use a law firm whose other client was a competitor of the Bridge Co.? Doesn't that just invite criticism? Doesn't it appear as if the Government was favouring one proponent over another? Why would it put itself in that position?
Want proof that the Bridge Co. and DCTC were in competition? Here is what Mr. Belistsky said:
- "Operators of the Detroit-Windsor tunnel said Thursday they are willing to renegotiate the remaining 15 years of their lease with the city of Detroit in a bid to thwart a takeover bid by the Ambassador Bridge. "We have been here for 75 years and our goal is to be here 75 more or beyond that," said Neal Belitsky, general manager for the Detroit & Canada Tunnel Corporation (DCTC). "
In another story,
- "Fearing a takeover bid by the owner of the Ambassador Bridge, operators for the Windsor-Detroit tunnel are in Washington this week raising their concerns with several government agencies. Among those receiving briefings over two days -- Monday and today -- were officials from the Canadian Embassy, Department of Homeland Security, business associations, lobby groups and other government authorities, said Neal Belitsky, the tunnel's general manager. "From a business perspective, we have a lot of concern," Belitsky said. "
For the sake of this BLOG, let's assume that the law firm was acting for DCTC....why would the Government allow them to work for it too? I thought long and hard about it and came to one possible conclusion:
the Feds and DCTC/Macquarie were working together to try and stop the Bridge Co.!
Since they were on the same side, the Government lawyers did not care about the concern!
If that is so, no wonder the Bridge Co. was so worried when Bill C-3 was in committee stage about the Government trying to destroy their business with the Act! If the Government was dealing with a party to stop the Bridge Co. at the Tunnel, are they doing the same about the new crossing? And could that party be a P3 partner with the Government ?
Does that explain the lack of action from Transport Canada on change in control? Have they already agreed on Alinda so don't care? Bill C-3 is clear: "No person shall, without the approval of the Governor in Council...acquire control of an entity that owns or operates an international bridge or tunnel." Or was this all done before the Act was passed?
We need answers!
City taxpayers need answers too. Has the Tunnel been sold, leased for a long-term and if so for how long or has its revenue stream been securitized? Now I am beginning to understand why my Municipal Freedom of Information Act has been handled the way it was. I was asking embarrassing questions.
How could the deal be entered into anyway...I don't recall a Request for Proposal or a Tender Request going out to get as much money for the City as possible.
Has it all been done behind closed doors again? Is it being done through the Eddie Francis Sole Source P3 amendment in the Purchasing By-law that makes a mockery of what MFP was supposed to teach us? Was the infamous Agenda Item #5 part of this? Was the fact that the only significant thing that the City has agreed on with the Senior Levels is improvements at the Tunnel Plaza part of this and now that seems to be going nowhere?
Oh my goodness......The light just went on in my brain for the Windsor side of the river: Tunnel, Gowlings, Estrin, Eddie.
- David Estrin is a partner in Gowlings.
- Eddie retained Estrin of Gowlings to fight the City's enemy, the Bridge Co.
- One of David's partners at Gowlings, is David McFadden.
- McFadden is National Group Leader Infrastructure where Estrin practises
- McFadden is Chair of the Board of the Detroit and Canada Tunnel Corporation and Deputy Chair of the Board of Macquarie Canadian Infrastructure Management Limited.
- Gowlings worked on
- -------Detroit-Windsor Tunnel – Acted as Canadian counsel to Macquarie Global Infrastructure Fund in its acquisition of the Detroit & Canada Tunnel Corporation, the operator of the Detroit-Windsor Tunnel. The Detroit-Windsor Tunnel is the second busiest crossing between Canada and the United States.
- -------Buffalo and Fort Erie Bridge Authority – Represent the Authority for the purpose of obtaining all environmental approvals required for the twinning of the Peace Bridge.
Are the City and Macquarie working together too? Are Windsor, the Feds and Macquarie working together?
My brain was reeling. I noted that Gowlings works for competitors of the Bridge Co. I knew that at one time they were Governance Counsel for Borealis too.
Oh no.....Were Windsor, the Feds and Macquarie working together along with Borealis?
Were Macquarie and Borealis going to be the P3 partner for the new border crossing?
I had to stop thinking.....this was getting completely out of control! Was there a deal, wasn't there a deal. Did it violate Bill C-3 or not, was it in compliance with the Purchasing By-law or not, why is everyone so quiet, is there a grand conspiracy? My head was spinning. I still had not even touched on the international aspects of it either.