29 June 2011

Taken up by the ferries

With a tender call to build six more ferries,the provincial government is still not finished sorting out problems with its last ferry contract.

Earlier this year, Kiewit Marystown delivered two ferries originally contracted in 2008  at a cost of $50.5 million.  They were supposed to be delivered in 2009 and 2010. The final delivery price was $27.5 million each.

The issue of cost-over-runs on the contract cropped up last week in an interview human resources minister Darin King gave to CBC’s David Cochrane.  King also said the provincial government has been trying to sort out construction of a third ferry at Kiewit but the ideas was hung up over cost escalations. 

According to the 2008 news release, the provincial government was supposed to purchase the engine for a third ferry in 2008 at a cost of $2.0 million. They were also supposed to start design work on a fourth, larger ferry.

The ferry project dates back to 2005.  When the provincial government announced the Kiewit deal a quarter of the work was supposed to go to a yard in Clarenville. Before work got underway, the Clarenville shipyard dropped out of the deal.

If the figures in provincial government news releases are accurate, the two ferries came in only 10% over budget. That’s actually low compared to cost over-runs on other provincial government tenders.

- srbp -