Jump to content

User:Museeritrean2514/sandbox

From Wikipedia, the free encyclopedia
< User:Museeritrean2514
This is an old revision of this page, as edited by Museeritrean2514 (talk | contribs) at 11:36, 27 June 2022 (→Design and build). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

File:JPEGNAME.jpg
Glen Sannox.

The ferry fiasco is an ongoing Scottish political scandal relating to the construction of two ferries by the Ferguson Marine Ltd, for the state-owned ferry operator Caledonian MacBrayne under direction of a public infrastructure authority, Caledonian Maritime Assets Ltd (CMAL), and the Scottish Government, headed at the time by First Minister Nicola Sturgeon of the Scottish National Party.

In addition to major delays and cost overruns, the main contractor Ferguson Marine was nationalised.

Background

Caledonian MacBrayne (CalMac) have an effective monopoly over ferry services to Scotland's numerous islands, which are homes to approximately 45,000 people. They provide "lifeline services" to 22 of the bigger islands and on average its 34 vessels complete 466 crossings a day.[1] Delays and cancellations in recent years have been blamed by CalMac on aging ferries. The average age for each ferry is 24 years old, of the 10 largest ferries, four are over 30 years old, which is beyond their expected operational life and the MV Isle of Arran 39 years old.[2] Research shows the replacement of ferries fell from one every 14 months from 1993 to 2007 (with 33,350 tonnes launched), to one every 36.1 months from 2007 to 2021 (with 16,188 tonnes launched).[3]

Procurement Process

The source of the scandal starts in the summer of 2014 when the last shipyard on the lower clyde, Ferguson Marine Ltd went into administration. In August of that year, and a month before the Scottish Independence Referendum Alex Salmond brokered a deal to allow industrialist and prominent supporter of Scottish Independence Jim McColl to step in and buy the business. Shipbuilding is an emotive issue, and the deal allowed Alex Salmond to promise "the reindustrialisation of Scotland" during the campaign. A year later the business was awarded a £97 million contract to build two ferries, one to serve on the Isle of Arran and replace the MV Isle of Arran, and the second to sail between Skye, North Uist and Harris.

At the time that contract was awarded there were concerns that Ferguson Marine had not built any ferries of this size in the recent past. The management team had recently been installed by the new owner, and had not experience of building a ferry of this size. The finances of Ferguson Marine were so tight that they told the Scottish Government they could not provide the financial guarantees that were stipulated in the contract. Out of the six shipyards that tendered to build the ferries, Ferguson Marine put forward the most expensive bid. As contract negotiations between CMAL and FMEL were concluding in September 2015, the chairman of CMAL, Erik Ostergard, wrote in an email "The issue is that the level of refund guarantee is not sufficient. At present the bulk of the possible engagement with a newly established shipyard with no track record at all of building ferries of this size is an unsecured risk... Equal to about £60 million which is totally off the track for what is normal practise for the shipping industry". Ostergard requested, and was granted, a letter from Scottish Ministers absolving his organisation of blame should the deal go bad.[4]

The Scottish Government announced they were signing the contract with FMEL on the first day of the Scottish National Party Conference. The announcement was made by Derek Mackay who was then the Minister for Transport and Islands

Design and build

The Ferries would be a new design, and use both marine diesel and liquified natural gas, which would allow the ferries to have lower emissions and allow operators flexibility over fuel sourcing and fuel costs. Another requirement was that the ferries would need larger bow thrusters and a stern thruster to make them more manoeuvrable in dock. Liquefied Natural Gas needs to be stored at -162°C and the required tanks and bow thrusters meant each ferry being 200 tonnes heavier than an equivalent vessel. [5]

Steel was cut on the on 7 April 2016 and the MV Glen Sannox (2017) was launched in November 2017 by first minister Nicola Sturgeon[6] and supposed to be in service by mid-2018. It emerged that windows had been painted on, the bulbous bow was made from flat sheet steel and the funnel not operational. These had been fitted so that the builder could claim a "milestone payment" from the Scottish Government. There were 15 milestone payments which would culminate in the final payment of £97 million and the delivery of the ferries. It transpired that parts of the ferry such as the bulbous nose and the rear mooring sections were put onto the ferry, even though they were ineffective, simply to trigger milestone payments.[7]

PacifiCat fleet

Main article: PacifiCat-class ferry

The vessels built for BC Ferries were intended to improve ferry service between the mainland terminal of Horseshoe Bay (in West Vancouver) and the Vancouver Island terminal at Departure Bay (in Nanaimo).

The three vessels 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 in June 1999 and the second fastcat began operating in November 1999.[8] 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 more fuel, "up to twice that of conventional vessels". Fully loaded and traveling at top speed of 34 knots/ 63 km an hour required the engines to be used at 90% power.
  • 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, 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 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, on the condition that BC would then rent the ferries. Some claimed the aluminum ships were worth more as scrap. Others said Indonesians were prepared to pay as much as $88 million.[9]

Projected uses

In September 2005, the media reported that the Washington Marine Group 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 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.[10]

Primary factors for project failure

The primary factor for the project failure was the overall cost of building three fast ferries being substantially more than advertised at the outset of the project in 1994, when it was projected to cost $210 million.[11]

The press called BC Auditor General Morfitt's comments perhaps the most damning report the BC Auditor General's office has ever issued.[12] His report stated 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 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.[13]
  • 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.[13]
  • During the project, the chief executive officer for CFI, Tom Ward[14], 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.[13]
  • 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.[13]
  • Despite opportunities, careful re-evaluation of the project was not undertaken.[13]
  • No clear reporting structure or government expectations existed to guide the project.[13]
  • BC Ferries had initially recommended that a comparable ferry be leased for trials in coastal waters,[13] but the government decided to forego testing and committed to the construction project, regardless.[13]

Project Management:

  • A risk analysis was not completed prior to the decision to proceed being made.[13]
  • The approved budget and timeline was established for the project without research and prior to the completion of design specifications or selection of contractor.[13]
  • The fast ferry business plan was not completed prior to project commencement due to the rushed nature of the project.[13]
  • Time and cost was poorly managed due to the inability to secure a fixed-cost contract with an experienced supplier.[13]

The auditor general report was later criticized in a Legislative standing committee by MLA Rick Kasper for ignoring and not accounting the benefits to BC and Canada in income taxes etc. from building the ships in BC.[15]

Fast ferries GAAP depreciations

When the fast ferries were sold, the provincial budget declared a $52 million loss.

References

  1. ^ "IN DEPTH Scotland's ongoing ferry fiasco: what you need to know". The Week. May 13, 2022.
  2. ^ "The problem with CalMac's ageing ferries". The BBC. May 13, 2022.
  3. ^ "Ferry figures show the Scottish government is sailing in troubled water". The Times. April 14, 2021.
  4. ^ "Scotland's ferry fiasco: What went wrong?". BBC Newsnight. Retrieved June 22, 2022.
  5. ^ "Presentation to the Arran Ferry Committee 10 April 2017" (PDF). CMAL. Retrieved June 27, 2022.
  6. ^ "N Pictures — Launch Of Ferry Glen Sannox At Port Glasgow". Inverclyde Now. November 21, 2017.
  7. ^ "Scotland's Ferry Fiasco: What went wrong?". BBC Newsnight. August 6, 2021. Retrieved June 27, 2022.
  8. ^ "Archived copy" (PDF). Archived from the original (PDF) on March 19, 2012. Retrieved August 7, 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  9. ^ "Archived copy". Archived from the original on November 10, 2012. Retrieved May 3, 2013.{{cite web}}: CS1 maint: archived copy as title (link)
  10. ^ "B.C. fast ferries sold to UAE buyer". CBC News.
  11. ^ "A Review of the Fast Ferry Project: Governance and Risk Management | Auditor General of British Columbia".
  12. ^ "Fast ferry project poorly planned says Auditor General". CBC News. Archived from the original on November 10, 2012.
  13. ^ a b c d e f g h i j k l http://commons.wikimedia.org/wiki/File:BC-Ferries_Fast_Ferries-Project.pdf [bare URL PDF]
  14. ^ "Former ferries boss denies lying".
  15. ^ "Archived copy". Archived from the original on March 27, 2012. Retrieved August 7, 2011.{{cite web}}: CS1 maint: archived copy as title (link)

Category:BC Ferries Category:British Columbia political scandals Category:Corruption in Canada Category:Political controversies in Canada Category:History of British Columbia

Retrieved from "https://en.wikipedia.org/w/index.php?title=User:Museeritrean2514/sandbox&oldid=1095268322"