Highway 104 Western Alignment Corporation
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Letters to StakeholdersAnnual Report 2005-2006President’s Letter The Highway 104 Western Alignment Corporation has completed its ninth year of operation in striving to provide the highest level of highway operation and customer service, and this has been a most significant year. With legal advice from our solicitors (McInnis Cooper) and assistance from the Bondholders’ Representative (CIT Financial Ltd.), the Corporation was able to secure amendments to its financial agreements that gave the Corporation the discretion to reduce, delay or eliminate future scheduled toll increases. Previously, all toll increases were prescribed in the financial agreements with no other option available. Whereas toll increases had been based on the forecasted financial situations conducted in 1996 when the agreements were signed, future toll increases will be based on the financial situation at the particular time. Although toll increases have not been completely eliminated, there will be increases only when the actual financial situation requires them. The Corporation continues to work with the toll plaza operator (Atlantic Highways Management Corporation Limited) to improve the management of the toll revenue collection process and with our auditors (Grant Thornton LLP) to improve the Corporation’s internal financial controls. Working with the Independent Maintenance Engineer (McCormick Rankin) and with the road maintenance contractor (Department of Transportation & Public Works), the Corporation continues to seek methods and procedures to ensure there will be a safe and quality driving experience now and in the future. Traffic on the Cobequid Pass remains steady and revenues continue to meet our targets; however, the reduction in tourism traffic and high fuel prices continue to be areas that need monitoring. The Corporation’s management made up of General Manager Don Stonehouse, P.Eng., Controller Eva Hislop, CMA, and Administrative Assistant Patricia Belleza are a competent and dedicated team who, along with our Government liaison and advisor Alan MacRae, P.Eng., are providing excellent service to the traveling public maintaining the Cobequid Pass Toll Road as a first class highway facility. As we move forward the Corporation will strive to continue to provide strong financial management and a roadway for a quality driving experience. Lee Rankin. P.Eng. President
General Manager’s Letter The Cobequid Pass continues to be a critical link in the Province’s highway system, providing a portion of the TransCanada Highway that connects Nova Scotia to the rest of Canada and to the United States. In fiscal 2005-06 the Cobequid Pass Toll Plaza handled 2,919,000 vehicles, comprising 2,262,000 cars and 657,000 trucks. This compares to 2,888,000 vehicles, comprising 2,248,000 cars and 641,000 trucks, in the previous fiscal year. In comparison to original forecasted traffic, automobile traffic is up 68%, while truck traffic is up 3.7%. Tolling revenue is up 1.4 % over fiscal 2004-05, reflecting stable toll rates. In fiscal 2005-06, the Corporation entered into a Phase 1 contract with the Toll Operator (Atlantic Highways Management Corporation Limited) to develop a toll system replacement plan for the aging toll system at the Cobequid Pass facility. A plan was prepared which provided the scope of work and costs of replacing the current system. At the end of the fiscal year, following acceptance of the replacement plan, the Corporation entered into a Phase 2 contract with the Toll Operator to assist in the procurement and implementation of a new tolling system. During fiscal 2005-06 the Corporation was able to resolve all of the issues with the Bondholders’ Representative (CIT Financial Ltd.) regarding the protocols to be followed to pay down a portion of the Corporation’s debt, and as a result the Corporation planned to make a special contribution toward the Junior Bond debt in fiscal 2006-07. In fiscal 2005-06 the Corporation funded a $450,000 major maintenance project to cold plane and repave a 3.2 km section of the westbound lanes from the Mines Bass River overpass structure The Corporation, with advice and guidance from the Department of Transportation & Public Works, concluded the emergency power requirements at the Toll Plaza needed to be upgraded, and as a result, the plaza building needed to be expanded. A design contract was issued, with construction slated for next fiscal year. This report provides a broad overview of the history and administrative structure of the Corporation, and the traffic and financial operation of the Cobequid Pass for fiscal 2005-06. I would commend its reading. In regards to the financial statements, the accompanying notes are very important in explaining the financial details. If you have any questions or comments regarding the Cobequid Pass, we would be pleased to hear from. The contact information is printed on the back of this report. Don L. Stonehouse, P.Eng. General Manager |
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Copyright © 2004 Highway 104 Western Alignment Corporation
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