It would be a mistake to include a made-in-B.C. provision in contracts for new vessels, but B.C. Ferries should be doing all it can to ensure domestic shipbuilders a fair and equitable chance to secure future contracts.
B.C. Ferries has awarded a $165-million contract to a Polish shipyard for three new vessels, which has stirred protests that the ships should be built in B.C. The reaction is not unreasonable — it would be great if the jobs and related business from a contract of that scope could stay in the province.
But the ferry corporation’s first responsibility is to its customers. Already plagued by rising costs and declining business, it is compelled to be frugal, and restricting bids to within the province would not be wise stewardship. While building the ferries in B.C. would undoubtedly help the local shipbuilding industry, if that meant higher costs, those costs would be passed on to the public as higher fares, when fare increases have already resulted in a decrease in ferry traffic.
When the corporation put out feelers to see who was interested in building the new ferries, 20 shipyards responded. The only one from B.C. was Seaspan, which owns Victoria Shipyards in Esquimalt, Vancouver Shipyards and Vancouver Drydock.
Nine of the companies were asked to take part in a pre-qualification process, and the list was whittled down to five who were allowed to bid on the contract.
But Seaspan withdrew from the bidding process in February, citing capacity concerns. It is building a $15-million B.C. Ferries cable ferry, and has other potential work for its Vancouver shipyard. This fall, it is planning to start building the first of an expected 17 federal non-combat ships.
That left four companies — one each in Poland, Norway, Turkey and Germany. The corporation awarded the contract to Remontowa, based in Gdansk. The Polish firm did not submit the lowest bid — other factors such as experience, overall design and ability to meet the deadline were considered, said a B.C. Ferries spokesman.
The ghost of locally built vessels still haunts B.C. Ferries — and B.C. taxpayers.
In the late 1990s, the NDP government under Glen Clark decided to advance its economic goals by having three fast ferries built locally, using B.C. aluminum.
It was a badly conceived project from start to finish, with delivery almost three years behind schedule and a budget that ballooned to more than twice the original estimates.
And when the ships were done, they were plagued by problems to the point of uselessness. Built at a cost of more than $460 million, they were eventually auctioned off for $19 million.
That should not be perceived as reflecting poorly on B.C.’s shipbuilders — the problems with the fast ferries were more the result of bad policy than faulty technology — but it underscores the need to focus on sound business practices over politics. Bidding is a competition, and it helps keep costs down. Putting geographical restrictions on the process would reduce the competitiveness and tend to drive prices up.
It isn’t that B.C. Ferries is not supportive of local industry. Over the past decade, it has spent more than $1 billion at local shipyards on repairs, maintenance and life-extension projects.
And there will be other opportunities — the corporation needs to build a new ship a year for the next 15 years. The ferry corporation, the provincial government and the industry should be working together to ensure B.C.’s shipbuilders have the information they need to be qualified and ready to submit competitive bids.
