New seabus contract goes to Dutch company over Vancouver-based Allied

[Pinion]

Translink saved $2 million by outsourcing the newest seabus, but took many millions more away from the local economy. So short-sighted.

The BC Liberal government won’t wade into the debate over TransLink’s awarding of the new SeaBus contract to a foreign company, despite continued attacks from labour groups and B.C. New Democrats who say the deal proves the government’s touted BC Jobs Plan is a sham.

Last week, Damen Shipyards Group of the Netherlands edged out North Vancouver’s Allied Shipbuilders by $2 million with their $25-million bid to build a replacement SeaBus slated for service on Burrard Inlet in 2014.

The deal marks the first time in the ferry service’s 36-year history that one of its boats will be built off B.C. shores.

Last week, the Canadian Auto Workers Union, which includes 80 SeaBus employees, joined the Shipyard General Workers Federation in accusing the government of turning its back on local industry while failing to account for significant economic spinoff benefits had Allied’s Dollarton yard been chosen over the Dutch company.

“There is no reason that this ship could not have been built here in B.C. — allowing TransLink to make this thoughtless decision is a reflection of poor leadership from the provincial government,” CAW president Ken Lewenza said. “While the B.C. government is touting its BC Jobs Plan, it’s also sending public funds offshore — money that could have been used to support job creation here in the province.”

But the B.C. Ministry of Transportation and Infrastructure insists the choice to go with an offshore company to replace the aging Burrard Beaver SeaBus was not a decision of the province, but of the TransLink board.

“It’s their operational issue,” ministry spokeswoman Kate Trotter told The Outlook Friday. “It’s not a governance issue.”

TransLink says awarding the bid to Damen was simple math and, with Allied and Damen being the only two qualified companies seeking the contract, the pickings from this province were slim.

“We did not get participation other than the one bidder from British Columbia and they weren’t the low-cost bidder,” TransLink board chair Nancy Olewiler told The Outlook Friday. “Our job is to use the taxpayer money wisely and the Dutch company was the low-cost bidder.”

Where possible, Damen will use locally sourced materials, Olewiler said.

“We sought B.C. companies, we phoned and said ‘Can you bid?’ But they all said ‘I’m sorry we don’t have the capacity because we’re too busy.’”

Allied president Chuck Ko said he was “aghast” to learn his yard had been passed over for the contract. He said Damen was able to undercut his bid by $2 million because the Dutch shipbuilder will take advantage of cheap Asian labour, likely building the vessel in China.

“This would be [TransLink’s] fourth ship so they were very specific with what they wanted and they said you had to go to specific suppliers and get this specific equipment, that’s how tight the spec was,” Ko said. “So the only difference would be the labour costs. Our employees are high-wage earners, and they deserve it.”

It was too important a contract for him to lose, Ko said, not only for the work it would have ensured his North Vancouver yard, but for the new training and infrastructure upgrades it might have heralded as well.

“There’s only so many projects of this magnitude available to a facility like ourselves and when you lose one there usually isn’t one right behind it,” he said. “The opportunity to upgrade our facility and improve our capability is lost and you can’t put a dollar value on that. We’re going to lose the ability to undertake that sort of work in the future.”

Despite the province’s collective “no comment” on SeaBus outsourcing, the issue was pre-election fodder for the B.C. NDP, with North Vancouver New Democrat candidate Craig Keating calling TransLink’s decision “disappointing” and calling the B.C. government’s avoidance of the issue “evidence of a lack of leadership” at the top.

“The current TransLink structure is something the provincial government is 100% entirely responsible for,” Keating told The Outlook, accusing the government of “shifting the blame” onto the regional transit provider.

“Here was a practical step to put some meat on the jobs plan and an opportunity to make the economy better on the North Shore, and what we find is the jobs plan is just a lot of photo ops and news releases rather than substance.”

New Democrat transportation critic Harry Bains said import tariffs on an overseas-built SeaBus could well eclipse the $2 million savings TransLink says it will accrue by going Dutch.

“There is generally a 25-per-cent tariff on ships less than 129 metres in length, and that could mean more than $6 million in additional costs for this vessel,” Bains said, noting the current SeaBus vessels are 35 metres long.

Olewiler denied the federal import tax would bump up the final tally, but said it was the first she had heard of it on this project.

“I’m not aware of anything of that order of magnitude,” Olewiler said, noting such taxes and general maintenance costs would have been considered by TransLink during the bid process.

http://www.northshoreoutlook.com/news/185097281.html

Maybe once they have two new ones they'll actually run two with 10 minute intervals like they've been promising for almost a decade. ahhh haha

[nname]

Originally Posted by Pinion

Translink saved $2 million by outsourcing the newest seabus, but took many millions more away from the local economy. So short-sighted.

Well, they were cutting bus service to save 10000s, 2 millions is absolutely huge...

Originally Posted by Pinion

Maybe once they have two new ones they'll actually run two with 10 minute intervals like they've been promising for almost a decade. ahhh haha

No, the new SeaBus is a direct replacement of Otter, which will be retired in 2014. The two new vessels will be in active service while the Beaver will be the spare.

[whatnext]

Originally Posted by nname

Well, they were cutting bus service to save 10000s, 2 millions is absolutely huge....

Not when they would have benefitted from the taxes flowing back from the workers.

This is no worse than Campbell's decision to offhsore the Coastal class ferries, how often does the "spare" even sail?

[Pinion]

Originally Posted by nname

No, the new SeaBus is a direct replacement of Otter, which will be retired in 2014. The two new vessels will be in active service while the Beaver will be the spare.

Still no excuse for 15-30 minute intervals.

Originally Posted by whatnext

This is no worse than Campbell's decision to offhsore the Coastal class ferries, how often does the "spare" even sail?

There wasn't supposed to be a spare. That's just what they call it while it's mothballed for budget reasons.

[quobobo]

Ah yes - the old mercantilist/protectionist argument that we should force Canadians to be a captive customer base for local corporations. No thanks.

[huenthar]

I'm more concerned about how we have to have 2 completely different processes for 2 separate single-SeaBus purchases less than 5 years apart and the moneythat may have been lost to that lack of efficiency...

[whiteshadow]

All these people complaining about how we "don't build it here". Look at the hoards of consumers heading down to Bellingham every day (especially weekends). Canadians are already of sound mind to shop based on price. I'm sure more than $2million worth of retail spending is being redirected to the US each year, if not each month.

Also, what guarantee did we have that 100% of the funds spent on building the ship "here" would go directly to companies here? Good chance a significant portion would be subcontracted and/or outsourced. Are there any tech companies left in Canada still building computer systems? All computer systems built for the Seabus would still probably be made in China even if the local company had won.

I think this "oh we should have spent the extra $2million for the local guys" is just a bunch of baloney and doesn't hold water / nor share the priorities of the average Vancouverite.

[Pinion]

Originally Posted by whiteshadow

I think this "oh we should have spent the extra $2million for the local guys" is just a bunch of baloney and doesn't hold water / nor share the priorities of the average Vancouverite.

If that is what the average Vancouverite has become then it's a sad day.

There is a direct benefit to the city worth way more than they amount they saved. Government agencies should not look for the cheapest deals with tunnel vision. If we wanted to have our city/province/country gutted for a few quick bucks we might as well just let corporations run everything.

[whiteshadow]

Originally Posted by Pinion

If that is what the average Vancouverite has become then it's a sad day.

As I said before, just look at the number of Canadian shoppers in Bellingham. You can't even find a Washington plate at Costco/Walmart/Bellis Fair. I think the "sad day" ship has sailed looong time ago...

Originally Posted by Pinion

There is a direct benefit to the city worth way more than they amount they saved. Government agencies should not look for the cheapest deals with tunnel vision. If we wanted to have our city/province/country gutted for a few quick bucks we might as well just let corporations run everything.

I don't understand the "corporation" angle you're throwing in. The BC gov't has a long history of saving a quick buck without looking at long term benefits/costs of their decision, ala SFPR c/w traffic lights instead of interchanges, Hwy 91/72nd intersection, no third crossing to North Shore. Hell, even the scrapping of the streetcar system in favour of buses in the 1950s because "buses are cheaper and can go anywhere" would fall victim to this mentality.

I support the cost-saving measures that Translink went for. This forces the local shipyards to be more aggressive in their pricing next time instead of whining for government handouts irrespective of costs.

[Meraki]

I think they're in a "damned if you do, damned if you don't" scenario.

Either the media would run with "TransLink picks foreign firm over local to build new SeaBus!" or "TransLink wasting YOUR TAX DOLLARS not going with lowest bid for new SeaBus!"

I mean, Canada Line was a much bigger vehicle buy and you didn't hear about "Buying from SOUTH KOREA when Canada can do it!?!"

[WarrenC12]

Originally Posted by Meraki

I think they're in a "damned if you do, damned if you don't" scenario.

Either the media would run with "TransLink picks foreign firm over local to build new SeaBus!" or "TransLink wasting YOUR TAX DOLLARS not going with lowest bid for new SeaBus!"

I mean, Canada Line was a much bigger vehicle buy and you didn't hear about "Buying from SOUTH KOREA when Canada can do it!?!"

You got it. If the seabus runs properly and reliably for it's lifespan, that's what's important.

Also, what's the % savings that $2M represents?

[trofirhen]

still ... all in all ... I still think it's a shame that the Seabus could not operate at a higher frequency (like every 10 minutes) .... how much money would that cost, all things - new ferry ($$$) and other stuff factored in? A higher frequency service might even encourage higher usage. Then again, perhaps not ..............

[whatnext]

Originally Posted by whiteshadow

All these people complaining about how we "don't build it here". Look at the hoards of consumers heading down to Bellingham every day (especially weekends). Canadians are already of sound mind to shop based on price. I'm sure more than $2million worth of retail spending is being redirected to the US each year, if not each month.

Also, what guarantee did we have that 100% of the funds spent on building the ship "here" would go directly to companies here? Good chance a significant portion would be subcontracted and/or outsourced. Are there any tech companies left in Canada still building computer systems? All computer systems built for the Seabus would still probably be made in China even if the local company had won.

I think this "oh we should have spent the extra $2million for the local guys" is just a bunch of baloney and doesn't hold water / nor share the priorities of the average Vancouverite.

Only because the average shopper is too stupid to connect the dots with things like their helathcare and the tax dollars required to support it. Add onto that the buffoonery of the Harpercrite who increased the personal exemption allowed, thus depriving the Treasury even further.

[Porfiry]

Originally Posted by Pinion

agencies should not look for the cheapest deals with tunnel vision. If we wanted to have our city/province/country gutted for a few quick bucks we might as well just let corporations run everything.

Government agencies should provide the maximum level of service possible for the minimum amount of money. The taxpayer should expect nothing less.

Companies should not expect to receive preferential treatment when bidding for contracts, because that provides no incentive to be competitive. It's a recipe for laziness and corruption. If a local company knew it always would have an inherent advantage, then bids would just keep going up. Why limit your bid to $2 million over your competitor, why not $4 million, $8 million?

[aberdeen5698]

Originally Posted by trofirhen

still ... all in all ... I still think it's a shame that the Seabus could not operate at a higher frequency (like every 10 minutes) .... how much money would that cost, all things - new ferry ($$$) and other stuff factored in?

The biggest issue with changing the Seabus schedule is that virtually the entire North Vancouver bus system operates on a "pulse" schedule that's synchronized, directly or indirectly, with Seabus arrivals and departures. Increasing Seabus frequency to run every 10 minutes would mean that most of the key North Vancouver route frequencies would also have to be increased as well. The effect of going from 15 minute to 10 minute Seabus frequencies means that the entire transit budget for North Vancouver would have to increase by close to 50%.

[cornholio]

Originally Posted by Porfiry

Government agencies should provide the maximum level of service possible for the minimum amount of money. The taxpayer should expect nothing less.

Companies should not expect to receive preferential treatment when bidding for contracts, because that provides no incentive to be competitive. It's a recipe for laziness and corruption. If a local company knew it always would have an inherent advantage, then bids would just keep going up. Why limit your bid to $2 million over your competitor, why not $4 million, $8 million?

This actually works against me, BUT local and or national companies SHOULD get some level of preferential treatment, and they do get this just about everywhere else in the world, including here in most cases. Its no different then looking at it in more human terms. Say you want to build a house, you get a quote from some random company for 100 grand and you get a quote from your brother for 120 grand. Your brothers quote is as low as he can get it for what ever reason. But choosing your brother means that your brother gains more then 20 grand in wealth, and as a result the sum of you and your inner circle actually sees a net benefit. So if you have a perfect partnership (complete trust and cooperation) with your brother then your actually better off spending 20 grand more and choosing your brother over some random company...

The point is this logic can be applied to something like say our government choosing who will build its ships.

Anyways I would also think that this is the provinces job and not translinks, although translink should make the province aware so that they can step in and cover the difference.

[Jebby]

Originally Posted by quobobo

Ah yes - the old mercantilist/protectionist argument that we should force Canadians to be a captive customer base for local corporations. No thanks.

This. Protectionism doesn't work and only harms your own economy in the long run.

[easy as pie]

^ except if the translink board didn't consider the import duties that will actually push the price much higher than the bc bid, in which case, it's plain incompetence.

[WarrenC12]

Originally Posted by easy as pie

^ except if the translink board didn't consider the import duties that will actually push the price much higher than the bc bid, in which case, it's plain incompetence.

That's a pretty random assumption.

If the provincial or federal government wants to step in with the extra $2M, by all means let them (Dix might have done this as premier) but as a taxpayer and transit rider, I'm happy with the decision.

[easy as pie]

says it right in the article