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Posts Tagged "expenses"

4Jun

B.C. Ferries’ new ship a nightmare reno of surprises and expenses

by admin

VICTORIA — When B.C. Ferries’ newest ship, the Northern Sea Wolf, left the dock at Bella Coola for the first time Monday, there was little sign amid the bright new paint and spaciously redecorated interior that the public was sailing on one of the most problem-plagued renovation projects in the ferry corporation’s history.

But the 35-car, 150-passenger, vessel was a renovation nightmare for B.C. Ferries.

The Northern Sea Wolf was purchased used in 2017 from a Greek shipyard. It’s retrofit finished a year late and with a $76 million price tag that was more than 36 per cent over budget.

In short, the little Greek boat turned out to be a big fat Greek lemon for B.C. taxpayers.

“I think it’s fair to say that we were, at various times, shocked and surprised at the issues we were running in to,” B.C. Ferries CEO Mark Collins told Postmedia Tuesday.

“I liken it to a house reno. You survey a house and inspect it and all the rest. It looks pretty good for a reno, and then when you start taking off the drywall and you get a few surprises. That’s exactly what happened to us.”

B.C. Ferries had retained a broker and the ship was certified “in class” under marine standards by a third party independent group. There were only three or four ships in the world that met the size, ocean-readiness, and closed deck specifications B.C. Ferries wanted for the Port Hardy-Bella Coola route, and the Greek vessel was “not perfect, but as close as we are going to get,” said Collins.

B.C. Ferries sent staff to survey the ship — originally called the Aqua Spirit — in addition to the third-party inspection. “She needs work, but she’s good enough,” was the opinion at the time, Collins said.

But when the Aqua Spirit arrived in Victoria in December 2017, B.C. Ferries engineers were aghast. There was no fire protection insulation, a key safety measure. “We’d take off the panelling and find no insulation there, I mean literally just missing,” said Collins. “There’s no way a ship should have been approved with that missing.”


The Northern Sea Wolf. Photo: B.C. Ferries

B.C. FERRIES /

PNG

Under the ceiling tiles were sprinklers that didn’t work. “We found some of the sprinklers were not even connected,” he said.

The propeller shafts were “worn beyond allowable specifications.” Some metal was corroded below acceptable minimum steel thickness.

The heating, venting and air conditioning system didn’t work. The elevator didn’t meet code. And the stern door was a problem.

B.C. Ferries had budgeted to overhaul the main engines, install new generators, upgrade the navigational equipment and improve overall safety — but the scope of problems far exceeded the original plan.

“This is what started to put pressure on the budget,” said Collins. The original price tag of $55.7 million grew to $63.4 million in early 2018, and finally $76 million in 2019.

“We were very disappointed in some of the condition of the ship that shouldn’t have been there because a ship being in class should not have had these faults,” said Collins.

“We continue to make claims against the class society for compensation for the things that should not have been there but in fact were.”

B.C. Ferries also had a tight timeline. The direct Port Hardy-Bella Coola route had been cancelled by the Liberal government in 2013 due to financial losses at BC Ferries. Then Transportation Minister Todd Stone said the route was losing $7 million a year, with a taxpayer subsidy of $2,500 per vehicle.

B.C. Ferries sold the ship on the route, the Queen of Chilliwack, which had just undergone a $15 million upgrade. A former B.C. Ferries engineer in Fiji bought it for $2 million for his private ferry operation.

Tourism operators on the coast, Cariboo Chilcotin and Interior were outraged at the lack of consultation and said they’d lose millions in business and international tourism.


Mark Collins, president and CEO of B.C. Ferries, discusses operations in the control tower at the corporation’s Swartz Bay terminal.

Adrian Lam /

Victoria Times Colonist

Then Premier Christy Clark relented on the eve of the 2017 provincial election, announcing the route would be restored by spring 2018. B.C. Ferries was not consulted.

“We informed the government of the day that it was a very ambitious time frame and could only be met with a used vessel,” said Collins.

As problems mounted, B,C, Ferries missed the spring 2018 deadline, and then the fall window as well.

“It was very frustrating for the tourism industry,” said Amy Thacker, chief executive of the Cariboo Chilcotin Coast Tourism Association. “Our international visitors who very much enjoy that route are making plans and booking 12 to 18 months in advance.”

Collins apologized directly to the communities and businesses for the lack of communication.

The final version of the Northern Sea Wolf is basically a totally renovated ship, said Collins. There’s a new galley, dining area, lounge seating, outdoor viewing areas, paint, washrooms, chair lifts, elevators and First Nations art. It’s twice as fast as the Queen of Chilliwack.

It was money well spent, said Collins, even if it was far more than budgeted.

“Instead of being 30 per cent renovated for $55 million, we got a ship that’s 95 per cent renovated for $76 million. So, in that sense, the value is not lost.”

In the future, B.C. Ferries will demand a second independent inspection of ships, beyond whether the international maritime certification says a vessel is “in class,” said Collins. Had there been more time, B.C. Ferries would also have considered building new in B.C., but that likely would have cost as much as $110 to $140 million, he said.

The purchase of the Northern Sea Wolf in 2017 straddled the end of the Liberal government and beginning of the NDP.

Transportation Minister Claire Trevena blamed the Liberals for “making terrible financial decisions.”

“They backed B.C. Ferries into a corner with an incredibly tight timeline, leading to the purchase of a used ship which was well below Transport Canada safety standards,” she said. “The upgrades ran well over budget and cost people $76 million that shouldn’t have been spent in the first place.”

Former minister Stone said the cuts only occurred because B.C. Ferries was losing money and facing fare hikes.

“The cancellation was a very difficult decision,” he said. “It was always our intention to put back a direct link between Bella Coola and Port Hardy.”

Stone said “it’s a really good day” to see the link, though the cost overruns and delays are “very disappointing.”

Meanwhile, actual users appear pleased it’s all finally over.

“We’re just incredibly happy to actually have her out there and sailing,” said Thacker. “Now that service is here, I think there’s a lot of consumer confidence restored.”

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The history of the Northern Sea Wolf

2013: The B.C. Liberal government announces cutbacks to ferry routes, including direct service between Port Hardy to Bella Coola, due to B.C. Ferries financial losses. It says the route lost $7.35 million. Tourism operators are outraged at the lack of consultation.

2014: B.C. Ferries sells the Queen of Chilliwack (which had just undergone a $15 million retrofit) for a reported $1.8 million to a private Fiji ferry company.

2015: The new two-vessel journey from Port Hardy to Bella Bella to Bella Coola includes a nine-hour trip on the MV Nimpkish, a small 16-vehicle ferry with one washroom that government touts as having “potable water” and snacks. Tourist reviews are negative.

2016: Premier Christy Clark announces a plan to restore direct ferry service from Port Hardy to Bella Coola by the summer of 2018. B.C. Ferries is not consulted about the timeline, and scrambles.

2017: B.C. Ferries hires brokers to try to find a “rare” small ferry that can deal with ocean conditions, fit 35 cars and has a closed deck. Only three or four candidates exist. A Denmark ship looks promising by the buyer withdraws. The corporation pays $12.6 million for the 246-foot-long Aqua Spirit from Greek firm Seajet. It was built in 2000 and is certified by third-party maritime groups as being “in class” for sea use.

December 2017: The Aqua Spirit arrives in Victoria after a 10,097 nautical mile journey from Greece.

2018: B.C. Ferries starts stripping the ship down and discovers technical problems, sprinklers that do not work, missing insulation, corroded metal, elevator errors, heat and air conditioning that is non-functional, unusable propeller shafts, and more.

Spring 2018: B.C. Ferries misses its government deadline to be back in service. The budget rises from $55.7 million to $63.4 million.

Summer 2018: Technical problems continue to grow. The budget increases to $76 million.

September 2018: The Northern Sea Wolf, as it is now called, still isn’t ready. B.C. Ferries puts the Northern Adventure on the Port Hardy-Bella Coola run for one month.

May 2019: The ship starts trials. Operates the final two weeks of winter connector service.

June 3, 2019: The Northern Sea Wolf takes its first run from Bella Coola to Port Hardy. It is more than 36 per cent over budget and almost a year late.




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