Post by ferryfast admin on Mar 23, 2006 11:19:17 GMT -5
B.C. to replace 3 northern ferries
Treasury Board meeting was scheduled before Queen of the North accident
SHANNON KARI
The Globe and Mail
VANCOUVER -- On the same day that B.C. Ferries lost the Queen of the North, the B.C. Treasury Board approved an agreement that will allow the long-awaited purchase of replacements for the vessels on northern routes.
Transportation Minister Kevin Falcon said the provincial cabinet must give final approval, but he did not expect that to be a problem.
The Treasury Board meeting was previously scheduled, and it was a coincidence that it was on the day that the passenger ferry struck a rock and sank off the north coast of the province, he said.
The terms of the agreement, under which the province will pay increased "service fees" to B.C. Ferries, have not been made public.
"Those are confidential numbers right now," Mr. Falcon said.
The fact that an agreement was reached would normally have been kept under wraps until it was approved by cabinet, but Mr. Falcon said that Finance Minister Carole Taylor allowed him to disclose the treasury board approval yesterday.
It is estimated that the total cost to replace the Queen of the North, Queen of Prince Rupert and Queen of Chilliwack will be at least $350- million. The new ferries should be in operation between 2009 and 2011.
The announcement comes 16 months after B.C. Ferries presented its "northern strategy" to the province to replace the aging vessels.
"These ships need replacing," said Rob Clarke, the chief financial officer of B.C. Ferries, a former Crown corporation privatized by the Liberal government in 2003. "This was already a very high priority, and to the extent it can be higher now, it is higher," he said.
The three northern ferries were scheduled to be retired by 2010. The Queen of the North was built in 1969, and had a refit in 2001. The Queen of Prince Rupert was built in 1966. The newest, the Queen of Chilliwack, was built in 1978.
The opposition NDP criticized the Liberals last October for failing to move more quickly to reach a financial agreement with B.C. Ferries to speed up the replacement of the vessels.
"You cannot say: 'Build three ferries right now,' " Mr. Falcon said yesterday. "This is moving forward exactly the way it should."
The Transport Minister agreed that it would have been preferable to have replaced the ferries several years ago, but he blamed the former NDP government.
"Unfortunately, it wasn't done. The ferry corporation was mismanaged."
Mr. Clarke explained that the replacement of the northern vessels has been part of the company's plans since 2002. At the same time, the B.C. Ferries executive said that it is a significant capital expense. "Before we make investments, we need to know we will generate the revenues we need," he said.
B.C. Ferries is one of the largest ferry operators in the world. Its 35 vessels operate on 26 routes serving more than 58,000 customers a day.
The Crown corporation that formerly ran the ferry service incurred a significant debt in the 1990s, which included the cost to build so-called "fast ferries." Those vessels went over budget and had operational problems.
The Liberal government created the independent B.C. Ferry Authority to oversee B.C. Ferries when it was privatized.
While B.C. Ferries operates as an independent company, it continues to receive funding from the provincial and federal governments, which add up to more than 20 per cent of its annual revenue.
For the fiscal year ending March, 2005, its total revenue of $564- million included a $24-million subsidy from the federal government and $107-million in "ferry service fees," paid by the province.
The annual fees are part of a 60-year-agreement between the province and B.C. Ferries to provide ferry services that are not commercially viable.
The service fees that are part of the agreement announced yesterday are in addition to the $107-million that is currently paid each year.
The public is still going to cover the cost of replacing the ferries, through the service fees and fares, former NDP premier Glen Clark said yesterday. He suggested that the privatization of the ferry service was an attempt by the Liberals to "deflect criticism," from what he described as a difficult government portfolio.
A 10-year-plan was announced in 1994, which would have replaced the Queen of the North by 2004, but the opposition criticized its cost. He said the Liberals should have moved more quickly to replace the northern ferries and questioned their comments about his former government.
"They have been in power for five years and they are still criticizing the NDP."
Treasury Board meeting was scheduled before Queen of the North accident
SHANNON KARI
The Globe and Mail
VANCOUVER -- On the same day that B.C. Ferries lost the Queen of the North, the B.C. Treasury Board approved an agreement that will allow the long-awaited purchase of replacements for the vessels on northern routes.
Transportation Minister Kevin Falcon said the provincial cabinet must give final approval, but he did not expect that to be a problem.
The Treasury Board meeting was previously scheduled, and it was a coincidence that it was on the day that the passenger ferry struck a rock and sank off the north coast of the province, he said.
The terms of the agreement, under which the province will pay increased "service fees" to B.C. Ferries, have not been made public.
"Those are confidential numbers right now," Mr. Falcon said.
The fact that an agreement was reached would normally have been kept under wraps until it was approved by cabinet, but Mr. Falcon said that Finance Minister Carole Taylor allowed him to disclose the treasury board approval yesterday.
It is estimated that the total cost to replace the Queen of the North, Queen of Prince Rupert and Queen of Chilliwack will be at least $350- million. The new ferries should be in operation between 2009 and 2011.
The announcement comes 16 months after B.C. Ferries presented its "northern strategy" to the province to replace the aging vessels.
"These ships need replacing," said Rob Clarke, the chief financial officer of B.C. Ferries, a former Crown corporation privatized by the Liberal government in 2003. "This was already a very high priority, and to the extent it can be higher now, it is higher," he said.
The three northern ferries were scheduled to be retired by 2010. The Queen of the North was built in 1969, and had a refit in 2001. The Queen of Prince Rupert was built in 1966. The newest, the Queen of Chilliwack, was built in 1978.
The opposition NDP criticized the Liberals last October for failing to move more quickly to reach a financial agreement with B.C. Ferries to speed up the replacement of the vessels.
"You cannot say: 'Build three ferries right now,' " Mr. Falcon said yesterday. "This is moving forward exactly the way it should."
The Transport Minister agreed that it would have been preferable to have replaced the ferries several years ago, but he blamed the former NDP government.
"Unfortunately, it wasn't done. The ferry corporation was mismanaged."
Mr. Clarke explained that the replacement of the northern vessels has been part of the company's plans since 2002. At the same time, the B.C. Ferries executive said that it is a significant capital expense. "Before we make investments, we need to know we will generate the revenues we need," he said.
B.C. Ferries is one of the largest ferry operators in the world. Its 35 vessels operate on 26 routes serving more than 58,000 customers a day.
The Crown corporation that formerly ran the ferry service incurred a significant debt in the 1990s, which included the cost to build so-called "fast ferries." Those vessels went over budget and had operational problems.
The Liberal government created the independent B.C. Ferry Authority to oversee B.C. Ferries when it was privatized.
While B.C. Ferries operates as an independent company, it continues to receive funding from the provincial and federal governments, which add up to more than 20 per cent of its annual revenue.
For the fiscal year ending March, 2005, its total revenue of $564- million included a $24-million subsidy from the federal government and $107-million in "ferry service fees," paid by the province.
The annual fees are part of a 60-year-agreement between the province and B.C. Ferries to provide ferry services that are not commercially viable.
The service fees that are part of the agreement announced yesterday are in addition to the $107-million that is currently paid each year.
The public is still going to cover the cost of replacing the ferries, through the service fees and fares, former NDP premier Glen Clark said yesterday. He suggested that the privatization of the ferry service was an attempt by the Liberals to "deflect criticism," from what he described as a difficult government portfolio.
A 10-year-plan was announced in 1994, which would have replaced the Queen of the North by 2004, but the opposition criticized its cost. He said the Liberals should have moved more quickly to replace the northern ferries and questioned their comments about his former government.
"They have been in power for five years and they are still criticizing the NDP."