August
6, 2004
BC
Ferries' Criteria Still Secret
In
a series of columns, Vancouver Sun columnist Vaughn Palmer
has done a better job defending BC Ferries than either the
corporation or the government has done for itself. In his
Friday column Palmer referred to the cost overrun incurred
when the Spirit class vessels were built in the late 80s
and early 90s. Notes in the annual reports issued by BC
Ferries are consistent with Palmer's numbers. It is interesting
that no political controversy resulted at the time, but
that may be due to the backdrop being the demise of the
Social Credit Party.
Palmer
and BC Ferries have made a good case for fixed price contracts,
but they have not disclosed whether Washington Marine Group
refused to offer a fixed price contract for the new Super-C
class ferries. No one should confuse ability to build steel
hulled ferries with the government's ability or lack thereof
to manage contracts. The contract problem can be fixed without
depriving BC of 2,000 person years of work and the economic
benefits that flow from the construction. BC Ferries also
asserts, and Palmer repeats, that no BC shipyard has the
necessary infrastructure to build the new ferries. Unfortunately,
BC Ferries has refused to specify precisely what infrastructure
is missing and whether or not that deficiency is easily
remedied. If it is a matter of insisting that unit construction
not be used, then BC Ferries is denying a technology that
was successfully used in BC since W.W.II.
It must
be remembered that there is no private owner of BC Ferries.
In the words of the Honourable Madam Justice Allan in her
recent decision refusing to grant an injunction to BC Ferries
against the park-and-ride operator, "…B.C. Ferries
is simply not in the same position as a private homeowner
or businessperson, regardless of the fact it is a private
company rather than a Crown corporation. The public aspect
of both the premises and the defendant's purpose for entering
them is overwhelming. BC Ferries' website indicates that
the BC Ferry Authority owns BC Ferries' common shares and
appoints its Board of Directors and the BC Government owns
its preferred shares, a debenture and the terminals."
Notwithstanding
ultimate public ownership and control of BC Ferries, the
Campbell government exempted BC Ferries from scrutiny by
the Auditor General, from coverage under the Freedom of
Information and Protection of Privacy Act, and from certain
sections of the Labour Code. That is a mistake that is coming
back to haunt the Campbell government. The appointment of
a Ferry
Commission to regulate BC Ferries does not compensate
for the shroud of secrecy the Campbell government placed
over the corporation. The terms of reference for the Commissioner
are very narrow and do not include issues such as the inclusion
of economic spin-off benefits in British Columbia that may
flow from the corporation's capital plan. Neither do the
terms of reference allow the Commissioner to grant the public
access to information that has been denied in the exclusion
of the Auditor General and the Freedom of Information and
Privacy Commissioner. It is not good enough to say that
the words of Mr. Hahn or Mr. Crilly should be enough to
satisfy the public.
No one
seriously believes that the new ferries should be built
in BC at any cost, but many people believe that Washington
Marine Group should be allowed to complete the bidding process,
and most people believe that all of the criteria used for
the decision should be made public. Exactly what are the
infrastructure deficiencies alleged by BC Ferries? Why won't
BC Ferries say whether or not economic spin-off benefits
for British Columbia were included in the selection criteria?
No amount of bad mouthing past contract management, will
excuse BC Ferries and the Campbell government from conducting
a secret process that will see jobs created in Germany at
the expense of British Columbians.
August
4, 2004
More
Heat on Offshore Ferry Purchase
The
offshore construction of three ferries is an issue that won't
go away. It has stayed in the news for weeks. One of the latest
developments is an appeal
by the mayors of the City of North Vancouver, the District
of North Vancouver and West Vancouver for the government
to come to its senses and at least allow Washington Marine
Group to finish the bidding process. According to the mayors,
"The North Vancouver shipyards are considerable economic
generators within the local communities, contributing in excess
of $1 million in property taxes to the local municipal revenue
base. It is calculated that for every $1 of capital investment
there is a genuine economic spin-off of $3 to the British
Columbia economy."
The government
caucus must be feeling a little heat. In a form letter to
constituents, Victoria backbencher Jeff Bray wrote "You
had recently contacted me regarding the issue of BC Ferries
building the 'C' Class ships in Europe. I had stated last
week on CFAX that BC Ferries should release more information
about the process it used to evaluate the bids. I am including
that new information that came from BC Ferries." Bray
is the guy who refused to join his North Vancouver colleague
and MLA of 13 years, Dan Jarvis, in calling the offshore scheme
"blatantly stupid", but Bray did criticize BC Ferries
for not providing enough information. There wasn't anything
"new" in the information forwarded by Bray. It repeats
BC Ferries' attack on Washington Marine Group and claims that
it would not be possible to build the ships in BC. It is interesting
that BC Ferries claims that the Spirit Class vessels came
in late and over budget although there is nothing on the public
record to independently support that assertion, even though
the ships were completed in BC's usual politically charged
atmosphere.
Bray's
letter refers to the regulator for BC Ferries when it states
Mr. Martin Crilly said he is satisfied that BC Ferries has
structured the procurement process to be "credible and
create competition among high quality international bidders".
It is probably true that there is credible competition among
international bidders, but that says nothing about the decision
to exclude the Washington Marne Group from the final bidding
process.
Those
who check the BC
Ferry Commission's website will find a two page order
that says nothing about excluding the Washington Marine Group
from the final bidding process. Commission Order 04-01 states
that "acquisition of up to three vessels for deployment
on the major route group is reasonably required" although
the Commissioner will not commit to the "allocation of
total capital expenditures between core service and ancillary
service" and, hence, to how much of the cost can be passed
through in fare increases. The two page order contains an
interesting note which reads: "In this copy of the original
order, at the request of BC Ferries, cost figures have been
replaced with "$XXX" and an attached 7-page Review
has been omitted, pending conclusion of negotiations with
ship builders expected by the fall of 2004. After this, the
cost data and Review will be released." There is no reason
to expect that the Commissioner's report will deal with the
missed economic benefits to British Columbia, or tax recoveries
to the province, that a build-in-BC option would offer. Those
matters are beyond the scope of the regulator, and beyond
the imagination of the Campbell government.
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