Fast Ferry Scandal
Encyclopedia
The Fast Ferry Scandal, also referred to as the Fast Ferries Scandal, "FastCat Fiasco", Fast Ferries Fiasco, were names given to a political affair in the late 1990s relating to the construction of three fast ferries
in British Columbia.
(NDP) premier
Glen Clark
, decided to use 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. (CFI).
The improvement promised was to deliver more frequent service (travel time reduced by 30 minutes), with smaller-capacity ships (250 cars vs. 365). The smaller ferries required 17 fewer staff per vessel to operate the same route, reducing operating costs.
was nearly dead due, in-part, to the ballooning cost of materials, labour disputes, and increasing competition from Asian shipyards.
Faced with the potential collapse of the west coast ship building industry the New Democratic Party
attempted to create business by creating the Fast Ferry Program. Local shipbuilders could emulate the success of Australia
n shipbuilders such as Incat
in Tasmania
and Austal Shipbuilding in the global fast ferry market.
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. The Holyman 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 specialised expertise. The company offered its expertise to the government. Their warnings and the offer were ignored.
) and the Vancouver Island
terminal at Departure Bay (in Nanaimo
).
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 (68 km/h) 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 ($70 million/vessel) to almost $460 million ($150 million/vessel) 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 ($6.5 million/vessel) to the 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. Some claimed the aluminum ships were worth more as scrap. Others said the Indonesians were prepared to pay as much as $88 million.
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 Friday, December 16, 2005 WMG confirmed that it is considering putting the ferries into service from North Vancouver to Duke Point
(near Nanaimo) 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.
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 Roy Kasper for ignoring and not accounting the benefits to BC and Canada in income taxes etc. from building the ships in BC.
PacifiCat Series
The PacifiCat Series or Fast Cat fast ferries were operated from 1999 to 2000 by BC Ferries. They were sold in March 2003 to the Washington Marine Group for $19.8 million CAD. Two of the three ferries were used for service; the third one was delivered as the Fast Cat operation was abandoned...
in British Columbia.
High speed ferries
The provincial government at the time, led by New Democratic PartyNew Democratic Party of British Columbia
The New Democratic Party of British Columbia is a social-democratic political party in British Columbia, Canada. The party currently forms the official opposition to the governing British Columbia Liberal Party following the 2009 provincial election in British Columbia.The BC NDP is the provincial...
(NDP) premier
Premier (Canada)
In Canada, a premier is the head of government of a province or territory. There are currently ten provincial premiers and three territorial premiers in Canada....
Glen Clark
Glen Clark
Glen David Clark is a politician in British Columbia, Canada who served as the 31st Premier of British Columbia from 1996 to 1999.-Early life and education:...
, decided to use provincial Crown corporation BC Ferries
BC Ferries
British Columbia Ferry Services Inc. or BC Ferries is a de facto Crown Corporation that provides all major passenger and vehicle ferry services for coastal and island communities in the Canadian province of British Columbia...
to advance its economic goal of supporting British Columbia's shipbuilding industry by creating a fleet of custom-designed high-speed catamaran
Catamaran
A catamaran is a type of multihulled boat or ship consisting of two hulls, or vakas, joined by some structure, the most basic being a frame, formed of akas...
passenger/vehicle ferries
Ferry
A ferry is a form of transportation, usually a boat, but sometimes a ship, used to carry primarily passengers, and sometimes vehicles and cargo as well, across a body of water. Most ferries operate on regular, frequent, return services...
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. (CFI).
Public goals of the Fast Ferry Program
A major impetus for the project was to have BC Ferries spend some of the billions it needs to spend on new ships to be spent locally. The development of Duke Point, truck ferry terminal, south of Naniamo, and the new island freeway, allowed the north Naniamo ferry terminal to focus on the passenger market. Large trucks were to be banned from the north Naniamo terminal and moved to an alternate Duke Point truck ferry.The improvement promised was to deliver more frequent service (travel time reduced by 30 minutes), with smaller-capacity ships (250 cars vs. 365). The smaller ferries required 17 fewer staff per vessel to operate the same route, reducing operating costs.
- Less waiting traffic at Horseshoe BayHorseshoe Bay, West Vancouver, British ColumbiaHorseshoe Bay is a West Vancouver community of about 1,000 permanent residents. Situated right on the western tip of West Vancouver, at the entrance to Howe Sound, the village marks the western end of Highway 1 on the British Columbia mainland....
terminal as backlogs often blocked access to the Sea-to-Sky Highway. - Fewer vehicles clogging residential streets upon each arrival of the existing ferries
- An end to noisy truck traffic in the villages of Horseshoe Bay and Departure BayDeparture Bay, British ColumbiaDeparture Bay is a bay in central Nanaimo, British Columbia, on the east coast of Vancouver Island. The surrounding neighbourhood is also referred to as "Departure Bay"—once a settlement of its own, it was amalgamated into the City of Nanaimo in the 1970s .- Geography :The bay is framed to the...
(the Horseshoe Bay terminal is at the bottom of a long, steep hill on which several fatal truck-related accidents have occurred) - Skills and training. The 450 million fast ferry costs total includes the assistance to the ship yards to upgrade yards and build new and expand buildings, and the purchase of specialized aluminum cutters and welding equipment. Approximately 350 people received training in welding, and 250 of these welders received international certification in aluminum welding required for high speed aluminum craft.
Political goals of the Fast Ferry Program
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 the Second World War, shipbuilding again peaked with the delivery of two 10,000-ton freighters every week. By the 1990s, however, shipbuilding in British ColumbiaBritish Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...
was nearly dead due, in-part, to the ballooning cost of materials, labour disputes, and increasing competition from Asian shipyards.
Faced with the potential collapse of the west coast ship building industry the New Democratic Party
New Democratic Party of British Columbia
The New Democratic Party of British Columbia is a social-democratic political party in British Columbia, Canada. The party currently forms the official opposition to the governing British Columbia Liberal Party following the 2009 provincial election in British Columbia.The BC NDP is the provincial...
attempted to create business by creating the Fast Ferry Program. Local shipbuilders could emulate the success of Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n shipbuilders such as Incat
INCAT
INCAT is a part of Tata Technologies Limited, a company in the Tata Group and operates in the field of Automotive Industry providing Engineering and Design solutions. The company took over a much larger player in the field namely INCAT, a Europe based company, in 2005...
in Tasmania
Tasmania
Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...
and Austal Shipbuilding in the global fast ferry market.
In the early planning stages of the project, Australian fast ferry operator, Holyman
Holyman
Holyman was an Australian company that operated cargo ships and ferries in Australia and other countries worldwide. The company had three divisions; Domestic shipping and transport services, Ferries and Bulk commodity handling....
, then one of the biggest and most experienced fast ferry operators in the world, was in talks with BC Ferries and the NDP Government. The Holyman 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 specialised expertise. The company offered its expertise to the government. Their warnings and the offer were ignored.
PacifiCat fleet
The vessels built for BC Ferries were intended to improve ferry service between the mainland terminal of Horseshoe Bay (in West VancouverWest Vancouver, British Columbia
West Vancouver is a district municipality in the province of British Columbia, Canada. A member municipality of Metro Vancouver, the governing body of the Greater Vancouver Regional District, the municipality is northwest of the city of Vancouver on the northern side of English Bay and the...
) and the Vancouver Island
Vancouver Island
Vancouver Island is a large island in British Columbia, Canada. It is one of several North American locations named after George Vancouver, the British Royal Navy officer who explored the Pacific Northwest coast of North America between 1791 and 1794...
terminal at Departure Bay (in Nanaimo
Nanaimo, British Columbia
Nanaimo is a city on Vancouver Island in British Columbia, Canada. It has been dubbed the "Bathtub Racing Capital of the World" and "Harbour City". Nanaimo is also sometimes referred to as the "Hub City" because of its central location on Vancouver Island and due to the layout of the downtown...
).
The three vessels
PacifiCat Series
The PacifiCat Series or Fast Cat fast ferries were operated from 1999 to 2000 by BC Ferries. They were sold in March 2003 to the Washington Marine Group for $19.8 million CAD. Two of the three ferries were used for service; the third one was delivered as the Fast Cat operation was abandoned...
were built between 1998–2000 and were named as follows:
- PacifiCat Explorer (1998)
- PacifiCat Discovery (1999)
- PacifiCat Voyager (2000)
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 (68 km/h) 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 ($70 million/vessel) to almost $460 million ($150 million/vessel) 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:
- High fuel consumption. The four 8,375 brake horsepower (6.2 MW) engines driving their waterjets required an inordinate amount of diesel fuel. Fully loaded and traveling at top speed of 34 knots/ 63 km an hour required the engines to be used at 90% power. This was largely due to BC Ferries' insistence on using diesel engines rather than the more efficient gas turbines that were originally planned.
- Due to an unusually wet and windy winter, there was a higher than normal amount of flotsam in the waters along the route, some of which was sucked into impellers for the ferries' engines, causing breakdowns and sailing cancellations.
- When operated at full speed, the Pacificat fleet created a wake which was reported to have damaged waterfront wharves and property in coastal areas near the two terminals. This required that the ferries reduce speed in certain areas and alter course in others, reducing their speed advantage.
- The air on vehicle decks became uncomfortably warm, either from the heat of the vessel engines or lack of air circulation. This made some people wary of bringing pets aboard the FastCats; however, the ferries had kennels with improved air circulation at the bow and stern of the vehicle decks.
- There was little outside deck space for passengers. The existing ferries had large decks, and it was common for passengers to spend the entire sailing circling the decks of the ship or sunbathing on the lifejacket containers.
- The ships had interiors that were perceived by passengers as being cramped compared to the existing ferries.
- Loading took longer than the older ferries due to balancing issues. This further negated the ships' speed advantage.
After a change in leadership, the new Premier of BC, Ujjal Dosanjh
Ujjal Dosanjh
Ujjal Dev Singh Dosanjh, PC, QC, is a Sikh Canadian lawyer and politician. He served as 33rd Premier of British Columbia from 2000 to 2001 and as a Liberal Party of Canada Member of Parliament from 2004 to 2011 including a stint as Minister of Health from 2004 until 2006 when the party lost...
, 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 ($6.5 million/vessel) to the Washington Marine Group
Washington Marine Group
Seaspan Marine Corporation provides marine-related services to the Pacific Northwest. Within the Group are three shipyards, an intermodal ferry business, and a tug and barge transportation company that serves both domestic and international markets. Seaspan Marine Corporation is part of the...
. 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. 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 GroupWashington Marine Group
Seaspan Marine Corporation provides marine-related services to the Pacific Northwest. Within the Group are three shipyards, an intermodal ferry business, and a tug and barge transportation company that serves both domestic and international markets. Seaspan Marine Corporation is part of the...
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 Friday, December 16, 2005 WMG confirmed that it is considering putting the ferries into service from North Vancouver to Duke Point
Duke Point, British Columbia
Duke Point is a geographical location in the extreme southeastern part of the city of Nanaimo in British Columbia. It is located on a thin peninsula to the east of the Nanaimo River estuary, just across the Northumberland Channel from Gabriola Island. Located at Duke Point is a major industrial...
(near Nanaimo) 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.
construction costs 378 million
The 462 million is the final project cost on May 1999: The construction costs of the ships were 378 million. Dock modifications cost 6.2 million. Spare parts of 5.4 million, 1.8 million in aluminum inventory, 26.5 million in interest costs during construction, 24 million in other CFI assets, 3.9 million in marketing, and 1.7 million in corporate taxes, are included in the 462 million number.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:
- The Ministry of Transportation and Highways was involved in the project to the point where at times, board decisions were forced under directives rather than a result of due diligence.
- During the project, the BC Ferries’ subsidiary, Catamaran Ferries International (CFI) board responsible for managing the project was replaced in its entirety without just cause in order to allow for more representation by B.C. Ferries. This action appeared to be a misunderstanding of good practice.
- During the project, the chief executive officer for CFI also held the same position at BC Ferries. By representing both the constructor and the future owner and operator of the fast ferries it made it difficult to objectively report on progress without implicating himself in almost every aspect of the troubled project. Thus, little or wrong information was available throughout the project.
- Little or no research was completed to establish the contributing factors that led to the decline of B.C.’s shipbuilding industry. Information on current infrastructure, competencies and viable partnerships was not analyzed.
- Despite opportunities, careful re-evaluation of the project was not undertaken.
- No clear reporting structure or government expectations existed to guide the project.
- BC FerriesBC FerriesBritish Columbia Ferry Services Inc. or BC Ferries is a de facto Crown Corporation that provides all major passenger and vehicle ferry services for coastal and island communities in the Canadian province of British Columbia...
had initially recommended that a comparable ferry be leased for trials in coastal waters, but the Government decided to forego testing and committed to the construction project regardless.
Project Management:
- A risk analysis was not completed prior to the decision to proceed was made.
- The approved budget and timeline was established for the project without research and prior to the completion of design specifications or selection of contractor.
- The Fast Ferry business plan was not completed prior to project commencement due to the rushed nature of the project.
- Time and cost was poorly managed due to the inability to secure a fixed-cost contract with an experienced supplier.
The auditor general report was later criticized in a Legislative standing committee by mla Roy Kasper for ignoring and not accounting the benefits to BC and Canada in income taxes etc. from building the ships in BC.