July 31, 2004

B.C. Ferries defends decision to build in Europe

Against a backdrop of mounting protests from local unions, shipbuilders and some politicians, B.C. Ferries yesterday defended a decison to build three new Super C Class ferries in Europe.

The former Crown corporation plans to build up to three of the 370 vehicle. 1,600 passenger vessels in what is widely reported as a C$500 million (US$376 million) project, though the actual amount has been obscured in the publicly available version of the B.C. Ferry Commission order approving the capital expenditure needed for up to three existing V-class vessels.

The three largest Canadian yards and eleven international yards were invited to bid. Two Canadian yards declined to bid and competition has now been narrowed to two European yards, one in Germany and one in Finland.

David Hahn, an American who was appointed President and CEO of B.C. Ferries in May 2003, defended the decision to build in Europe by citing the failed fast ferry project that cost British Columbia taxpayers almost C$500 million.

"We just can't afford a mistake again," he said at a press conference. "There was a very bad movie made in B.C. about seven years ago and I feel we're being asked to do the sequel."

The only Canadian yard to bid was Washington Marine Group, but B.C. Ferries rejected it because "expert evaluations conclude that [it] did not have the shipbuilding infrastructure, technology or experience required to build large complex vessels.

Hahn also reportedly said another reason the Washington Marine Group's bid was rejected was because part of its plan included building much of the ships in China.

Canadian press reports quote Washington Marine Group CEO Steve Frasher as saying the company's bid had included a built-in B.C. option and a China-build option.

The rejection letter the company received from B.C. Ferries said the China plan wasn't even considered, Frasher is quoted as saying



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