Kiewit and province fail to strike deal to build swing ferry in Marystown
Last week’s provincial shipbuilding announcement put another damper on employment hopes on the Burin Peninsula.
At a press conference in St. John’s Dec. 17, Transportation and Works Minister Paul Davis revealed the province has decided to make two contracts to build provincial ferries available in an open and competitive process.
He indicated the department is now planning to issue a Request for Proposals (RFP) in the coming weeks to construct a swing vessel along with a new ferry for Fogo Island and Change Islands.
Mr. Davis also announced an RFP will be issued for passenger, freight, and vehicle ferry services for the Strait of Belle Isle service and for coastal Labrador, which will be put in place for a 15-year term starting Apr. 1, 2016.
The swing vessel is similar to two other 42-foot ferries that were constructed at Peter Kiewit International’s facility in Marystown. Construction on the ‘MV Grace Sparkes’ and the ‘MV Hazel McIssac’ were finished in March 2011 at a cost of $27.5 million each, according to a government press release accompanying last week’s announcement.
Cost overruns on those two vessels became a thorny issue between the Kiewit and the province. Nevertheless, the two parties pursued months of negotiations on the third ship but were unable to come to an agreement.
Mr. Davis indicated the decision to use an RFP process to construct new vessels does not prevent Kiewit from submitting proposals and said the provincial government is hopeful the company will do so.
Burin-Placentia West MHA Clyde Jackman said he too hoped Kiewit would put in a bid.
“My thought on it is, if Kiewit wanted to and if they sharpened their pencils enough, that they could, in fact, pull together one package for four vessels.”
Mr. Jackman indicated the gap in negotiations on the swing ferry has been too large to bridge. While the provincial government would like the vessel built in Marystown, he said it can’t do so at any cost.
“This is a way now to see if Kiewit is genuinely serious about this.” – Clyde Jackman
“We simply can’t be held out any longer by a single company, and the people of the province can’t be held out any longer because they need ferry service.
“This is a way now to see if Kiewit is genuinely serious about this.”
Meanwhile, Marystown Mayor Sam Synard indicated the province shouldn’t realistically expect to open up bidding to shipbuilding companies around the globe and expect Peter Kiewit International to compete.
He cited lower wages, benefits and safety standards overseas as the reasons.
“My concern is that, when you go out and get international responses to your Request for Proposals, of course, they’re going to see a huge gap between what these ships can be build for in Asia, in particular, and what they can be build for in Marystown.
“At the end of the day, all the general public is probably going to see is the gap in cost. They’re not going to see what’s lost in benefits.”
Mayor Synard indicated his understanding was Kiewit was interested in building all provincial ferries and proposing to make modification to the Marystown yard, including increased lifting capacity.
“Not only might we not build ships in Marystown, Newfoundland and Labrador, we might have accidentally turned down the growth of an industry in the province as well.”
But the mayor also said he was hopeful Kiewit would submit a proposal to government.
“You can’t build (the ships) at any cost, but you can build them at some cost. Again, look at the tax dollars alone that the province would collect on an industry that went on 10, 12, 15 years.
“I would hope that (Kiewit does put forward a bid), but I know they’re kind of gun shy of trying to compete with Asian shipyards, knowing that they can’t do that to being with.”