New ferries to be built in Germany

B.C. Ferries has made it official. B.C.'s three new Super C-class ferries will be built in a German shipyard, despite a vigorous campaign to keep the work in B.C.

The B.C. Ferries Board of Directors has given its approval to a $325-million contract to the Flensburger Shipyard with each vessel costing about $108 million.

• LINK: B.C. Ferries announcement (pdf)

However, the overall price tag is estimated at $542 million, including taxes, financing and management costs. That includes a contingency for a 25-per-cent federal import duty.

B.C. Ferries has asked Ottawa to waive that 25-per-cent tax normally applied to foreign-built ships.

• LINK: Flensburger Shipyard

B.C. Ferries President and CEO David Hahn calls the awarding of the contracts a momentous decision. "It's a great day for B.C. Ferries, its a great day for our customers who will ultimately save $160 million by building these ships in Germany.

"Again, I think its the right thing for the province for us to have made this decision," says Hahn.

He says the German deal is still better by almost $80 million even if B.C. Ferries doesn't get the tax waiver from Ottawa. And he says that gap is "too wide to ignore," and "will lead to lower fares over time."

He says the first new ferry will arrive in B.C. in 2007 with the other two scheduled for completion in 2008.

Hahn says B.C. shipyard workers may build smaller ferries in the future if they can cut costs, but admits there are no guarantees.

"Nobody should ever make that assumption. Again, I think we have given them a roadmap. We have asked them to sharpen their pencils. We have shown them the way. They just have to go there."

• FROM SEPT. 16, 2004: Union threatens to sue B.C. Ferries directors

Meanwhile, more than 300 B.C. General Shipyard Workers' Federation workers and other union members staged a protest outside the B.C. Ferries offices

"Certainly a bad decision in my view," says Federation president George MacPherson. "I don't think the board really did their due diligence on this thing. And I think they should be ashamed of themselves."

The union has been campaigning to have the three ships built in Vancouver and Victoria shipyards, arguing that thousands of B.C. jobs are being lost.

• LINK: Shipyard General Workers' Federation

• INTERVIEW: The Early Edition's Rick Cluff speaks with David Hahn.