Ferry changes costly to north

  • Mon Dec 9th, 2002 12:00pm
  • News

Enjoy your last ride or two with the BC Ferry Corporation, because very soon, you’ll be riding with BC Ferry Services- and you’ll be paying more!
The BC government announced Monday sweeping changes to the way ferries in the province will be operate, with the 42-year old BC Ferry Corporation to be dismantled, and two other bodies created.
One, BC Ferry Services, will be structured like a private company and own and operate the ferries, while the other, the BC Ferry Authority will be the government regulator.
Transportation Minister Judith Reid says several audits have shown the ferry corporation is not meeting today’s needs, and that government interference, mismanagement and bad business decisions have cost taxpayers $1-billion in the last decade, almost half that amount for the fast ferry fiasco alone.
“BC Ferries will be transformed into a customer-focused and financially stable marine transportation system that improves services and revitalizes the economy of the province’s coastal communities,” Ms Reid said, “the new structure will help ensure services are delivered on time and on budget. It will create a vibrant, properly managed ferry system that improves customer service, creates new jobs for coastal communities, ensures stable rates and is sustainable for the future.”
The ferry corp. will be restructured and renamed BC Ferry Services, which will be governed by the BC Ferry Authority, while an independent regulator will regulate rates and protect the consumer. The new entity -BC Ferry Services- will be able to borrow private money to raise the $2-billion needed to modernize the fleet and terminals. The regulator will protect consumers from unreasonable rate hikes through the establishment of a price cap, according to the government. Service levels and routes will be assured for five years, while the new company will get a 60-year contract with the government. BC Ferry Services will own the fleet, but not the terminals, which will remain in government hands.
The government also announced rate increases for the north of 3.8 percent effective this weekend and 4.4 percent per year for the following five years, starting next November, for a total of over 25-percent by the end of 2007. By way of contrast, the increases announced for southern routes add up to just under 18-percent over the same period, seven percent less than here.
The minister also said the changes will revitalize the ferry system as follows
• improved service and customer choice
• guaranteed service levels and fair rates
• independent regulator to be appointed
• economic development and job creation
• public ownership of ferry terminals
• no new public debt
• ongoing accountability
Current labour agreements will be transferred to the new entity, the minister said and all pensions and benefits will remain in place for employees.
The chairman of BC Ferries says making the corporation independent will mean it can compete better in capital markets for funds.
“Access to outside sources of capital is required to raise the $2-billion needed to modernize the fleet and terminals without adding to the government’s debt burden,” he said.
BC Ferries has more than 4,500 employees, and more than 40 ships. It lost more than $1-per passenger last year, serving 21-million passengers and losing $23-million.