Tunnel Deal--When Can It Get Done

The Tunnel deal in Detroit seemed to fall apart when Detroit Council would not transfer the Tunnel into a new Authority, supposedly the way Windsor did. According to Cliff Sutts:

• "The deal we have got on the table requires them to create this authority,"

Councillor Marra said

• "Windsor won't resume negotiations unless Detroit puts the tunnel in the authority."

I wonder if the negotiators on the Detroit side on the Tunnel deal were aware that Windsor’s subsidiary company does not yet own the Tunnel since the asset has not yet been transferred here. Was Detroit Council ever advised of this fact as well before any of their votes? If not, why not?

I received this note from a gentleman who has been corresponding with the City about this matter. As you know, Transport Canada consent to the transfer of the asset, the Tunnel, was a condition of the Asset Purchase Agreement between the City and its subsidiary. Here is what the City representative wrote:

• “The International Bridges and Tunnels Act stipulates that a change in control of an international tunnel must be approved by Transport Canada. At the present time this application has been filed by the City of Windsor and is pending. Until this application is approved by Transport Canada the transfer of assets from the City of Windsor to the Windsor-Detroit Tunnel Corporation cannot be completed. The Windsor-Detroit Tunnel Corporation is 'non-functioning' until the transfer is completed as the corporation would have no assets until that time. As you may be aware, a report has not been brought to City Council announcing completion of the transfer - this is based on the reasons stated above.”

I don’t know how Transport Canada will be able to approve such a transfer until Regulations to the Act are passed and that may not happen for several more months. If Transport Canada does grant such approval without Regulations then you know the firestorm that will be created. The Bridge Company will rightfully be able to say that the Government is again trying to help out one of their competitors by giving them an advantage. They will rightfully be able to argue that they are being prejudiced by their "judge" on the Enhancement Project. They will rightfully be able to say that they are not being treated fairly.

One other question that still bothers me. I know that the City put its application for a loan with Infrastructure Ontario “on hold.” I would still like to know if anyone in the City or any of its lawyers or consultants received a communication in any form, not just “face-to-face,” from Infrastructure Ontario setting out what that organization believed the value of the Tunnel was and what amount it was prepared to lend to the City. It would have to be the City at risk since the subsidiary is just a shell right now. Apparently as at the end of July, the subsidiary

• "is not active and is a shell corporation at this time and no CEO or CFO have been appointed."

If it is anything less than $75 million, then the Mayor needs to explain to us what the “business case” for the Tunnel deal is and who will make up the deficiency. If it is more than $75 million, what will the excess be used for. We have all assumed haven't we that the City's application was for $75M! We have never been told otherwise.

Just to let you know, I have filed a Freedom of Information request for the Infrastructure Ontario file on the transaction.