Tuesday, July 30, 2013

Should we build the next large ferries in BC?

BC Ferries announced last week they are moving forward with plans for three new intermediate size ferries to replace Queen of Burnaby and the Queen of Nanaimo.  Various people have been complaining that the competition for the new ferries will be open to international companies as well as Canadian companies.

When the last set of major ferries were built, the Coastal class, the contract went to the Flensburger Schiffbau GmbH.  People complained at the time that they were not built locally but what they forget is that no local company was willing to submit a serious bid to build them in BC.

The experience in BC of building large ferries has not been good over the last 25 years.  The Fast Ferries were an attempt to create a ship building business in BC by government intervention.   The three PacifiCats cost more to build than the cost the four ferries built by Flensburger Schiffbau GmbH.

The the two Spirit Class vessels were built with BC Ferries being the builder in charge through a company they created called Integrated Ferry Constructors Ltd.   They cost a combined $270,000,000 to build in the early 1990s.   The three Coastal class ferries were delivered for $325,000,000 14 years after the Spirit of Vancouver Island was completed.

Building a large ferry is something that takes a certain amount of skills and you have to build enough of them to retain the expertise on staff long term.   For BC companies to be able to competitively build the ferries needed by BC Ferries, they should be competing to build these ferries globally.   No company in BC is trying to build ferries for other parts of the world.

There is a global demand by private companies for ferries.  Here are some companies from northern Europe:

  • Stena - 19 large ferries, lates built in 2010 by Wadan Shipyard in Wismar
  • P&O - 14 large ferries, the latest build in 2010 and 2012, both of them by STX Europe in Helsinki
  • Viking Line - 7 large ferries - the latest build in 2013 by STX Europe in Turku Finland
  • Tallink-Silja Line - 14 large ferries, the newest completed in 2009 by STX Europe in Rauma Finland
  • TT Line - 6 large ferries though the newest one is 11 years old now.
  • DFDS Seaways - 34 large ferries the three newest built in 2010 by Odense Staalskibsv√¶rft A/S in Denmark though the shipyard and ferry company are owned by the same parent company

For reference:
BC Ferries - 14 large ferries the newest being the three Coastal Class ferries.

No one in BC is trying to get this work even though there is a serious global demand by private companies for ferries.   If Finns and Germans can compete to build large ferries for the private sector, there is no reason a BC based shipyard could not do it as well.

Flensburger Schiffbau GmbH does not have any captive local market so they have to seek contracts elsewhere in the world.   They have built for four ferries for BC Ferries, but in recent years they have also built ones for Caledonian MacBrayne in Scotland and  Smyril Line which serves the Faroes and Iceland.   They are only one of a number of private shipyards that are competing for this work.

Why would the BC government force BC Ferries to have the ferries built in BC if companies in BC are not at least trying to get this sort of work from elsewhere in the world?  It is not as if there have been no ferries built in BC in the last 25 years.   Beyond the Spirit Class the the PacifiCats the Washington Marine Group has build some BC ferries in the last few years such as The Island Sky in 2009, the Queen of Cumberland in 1992 and the Queen of Capilano in 1991.   Allied Shipbuilders in North Vancouver build the Skeena Queen in 1997 and the MV Kuper in 2006.

The new ferries that BC Ferries is looking for are not large ferries which means it is unlikely they will be lot of serious bids from elsewhere in the world.   The proposed new ships are within the upper range of the ferries that WMG has built in BC in the last 25 years so it would seem there is the local capacity to build them.   The one major thing allowing international bids will do is reduce the cost of the ferries, if a BC company is to win, they need to bid low enough that it is not worth a company in Europe or Asia to bid for the project.

Let the private sector be the private sector and have BC Ferries get the best deal it can.


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