Fast ferry scandal


The fast ferry scandal was a political affair in the late 1990s relating to the construction of three fast ferries by the Canadian provincial crown corporation BC Ferries under direction of the Executive Council of British Columbia, headed at the time by Premier Glen Clark of the New Democratic Party.
In addition to major delays and cost overruns, the ferries never fully met their original specifications, and only operated briefly in a reduced capacity, before being auctioned off at a substantial loss.
A review was later conducted by British Columbia Auditor General George L. Morfitt.

High-speed ferries

The provincial government at the time, led by New Democratic Party premier Glen Clark, used provincial Crown corporation BC Ferries to advance its economic goal of supporting British Columbia's shipbuilding industry by creating a fleet of custom-designed high-speed catamaran passenger/vehicle ferries for BC Ferries. The eventual goal was to use BC smelted aluminum from Alcan, to create jobs building aluminum boats for the international market. The vessels were to be built by private shipyards under the overview of a new provincial Crown corporation to be called Catamaran Ferries International Inc..

Public goals of the fast ferry program

A major impetus for the project was to have BC Ferries spend locally some of the billions that needed to be spent on new ships. The development of Duke Point, the truck ferry terminal south of Nanaimo, and the new island freeway allowed the north Nanaimo ferry terminal to focus on the passenger market. Large trucks were to be banned from the north Nanaimo terminal and moved to an alternate Duke Point truck ferry.
The improvement promised was to deliver more frequent service, with smaller-capacity ships. The smaller ferries required 17 fewer staff per vessel to operate the same route, reducing operating costs.
Perhaps more important than the need for a more efficient ferry system was the NDP government's desire to rebuild and collect taxes from the shipbuilding industry of British Columbia. During the early 1900s, shipbuilding in British Columbia was at its greatest, in support of a booming fishing industry. During World War II, shipbuilding again peaked with the delivery of two 10,000-ton freighters every week. By the 1990s, however, shipbuilding in British Columbia was nearly dead due, in-part, to the ballooning cost of materials, labour disputes, and increasing competition from Asian shipyards.
Faced with potential collapse of the local ship building industry, the British Columbia government initiated the fast ferry program, expecting local shipbuilders could emulate the success of Australian shipbuilders such as Austal and Incat.
In the early planning stages of the project, Australian fast ferry operator Holyman, then one of the biggest and most experienced fast ferry operators in the world, was in talks with BC Ferries and the NDP government. Holyman's managing director and its global development manager met with the Minister for Transport and cautioned him against the BC Ferries FastCat plan. They suggested that a first time builder would find it impossible to construct the vessels on time, within budget, or within weight specification. They also suggested that the intended power would be insufficient to meet targeted speed, even if the vessels were built within weight. Finally, they suggested that the ongoing maintenance and operation of fast ferries required specialized expertise. The company offered its expertise to the government.

PacifiCat fleet

The vessels built for BC Ferries were intended to improve ferry service between the mainland terminal of Horseshoe Bay and the Vancouver Island terminal at Departure Bay.
The three vessels were built between 1998–2000 and were named as follows:
Technically, PacifiCat Voyager was never part of the BC Ferries fleet, as it was christened but never commissioned; by the time this vessel was ready for deployment, the bottom had already fallen out of the fast ferry program.
The vessels had a service speed of 37 knots and a capacity for 250 car-equivalents and 1000 passengers. The hulls of all three vessels had slightly varying murals that depict a cougar.
Due to various oversights by the government, BC Ferries, design bureaus, and the shipyards, the cost of the program more than doubled from $210 million to almost $460 million and final delivery was almost 3 years behind schedule. As with all prototype construction this cost and build time was gradually being reduced with each successive completion. A large part of the delay was because the shipyards commissioned to construct the vessels had very little experience working with aluminum. Also design changes during construction caused delays and more costs. Previously, construction of aluminum vessels in British Columbia had been limited to fishing boats and special-purpose vessels. The construction of three dual-hulled 122.5 m catamarans represented a very large leap of faith by the government in British Columbia shipyards.
The first fastcat began service between Horseshoe Bay and Nanaimo on June 1999 and the second fastcat began operating on November 1999. The ferries had the following problems during their brief tenure:
After a change in leadership, the new Premier of BC, Ujjal Dosanjh, placed the ferries up for sale. A subsequent election virtually eliminated the New Democratic Party from the legislature, and Gordon Campbell of the BC Liberals auctioned off the PacifiCat fleet on March 24, 2003 for $19.4 million to Washington Marine Group. Further controversy erupted when it was revealed that the same company, which is a prominent financial backer of the Liberal Party, had offered $60 million for the vessels prior to the auction, on the condition that BC would then rent the ferries. Some claimed the aluminum ships were worth more as scrap. Others said the Indonesians were prepared to pay as much as $88 million.

Projected uses

In September 2005, the media reported that the Washington Marine Group had expressed interest in operating a fast ferry service from Downtown Vancouver to a point on Vancouver Island. When questioned, representatives of WMG indicated that they are actively searching for suitable applications for the Fast Ferries and they would not rule out such a service.
On December 16, 2005 WMG confirmed that it is considering putting the ferries into service from North Vancouver to Duke Point to compete with the BC Ferries routes. WMG at one point said they intended to make a decision by the spring of 2006.
As of July 2009 the ferries have been sold for use in the United Arab Emirates.

Primary factors for project failure

The primary factor for the project failure was the overall cost of building three fast ferries was substantially more than advertised on the outset of the project in 1994 when it was projected to cost $210 million.
The press called the BC Auditor General Morfitt's comments perhaps the most damning report the BC Auditor General's office has ever issued. His auditor general report stated there was significant breakdowns in governance and project management were major factors in the failure of the fast ferry project. These breakdowns were identified as follows in Morfitt's government report:
Governance:
Project Management:
The auditor general report was later criticized in a Legislative standing committee by MLA Rick Kasper for ignoring and not accounting the benefits to BC and Canada in income taxes etc. from building the ships in BC.

Fast ferries GAAP depreciations

When the fast ferries were sold, the provincial budget declared a $52 million loss.