BC Ferries costly but not innovative

I have been reviewing amounts paid senior officers of  BC Ferry Services Inc. and also the amounts paid to directors. In 2009, the Comptroller General of British Columbia reviewed governance of the organization and made strong observations. The response of BCFS leaders was a collective thumb in the eye of British Columbians. In 2010, not only was the grab for cash by senior executives higher, so was the take of directors:

"BCFS executive compensation was significantly higher than that paid by several larger public sector entities. For example, the Chief Executive Officer‟s (CEO) total 2008/09 compensation was more than double that of the larger public sector comparators. We also found that the performance measures and targets used to determine the incentive bonuses for executives made the bonuses easier to attain than we would have expected.

"The BCFS Board Directors' remuneration was also higher than public sector organizations we compared against, and the retainer fee portion, which was most of the remuneration, was three to five times higher than permitted under a Treasury Board (TB) directive...

"Our concerns regarding BCFS‟ compensation are compounded by the fact the BCFS Board sets its own compensation and approves the executive compensation without accountability..."

David Hahn received supplemental pension benefits that cost BCFS $450,000 each year, in addition to the approximately $1 million a year of other earnings. (The chief of Washington State Ferries earns $148,000 a year, one tenth Hahn's level.) Totals shown below include that extra pension cost. The generosity with public funds did not stop with Hahn, the directors were rewarding themselves handsomely too, for rather little work and almost no responsibility.

Despite being the most expensively managed ferry operation in the world, BC Ferry Services has been anything but the most innovative, except for the ground breaking payments to those who should have been exercising fiduciary responsibility. Former Chair Elizabeth Harrison in particular ought to be returning a pile of money for her oversight failures.

Washington State Ferries recently initiated an examination of powering existing and future large vessels with natural gas. Norwegian operator Fjord1 is already the world's largest user of natural gas powered ferries and is building a 242-car gas-electric system ship with a service speed of 20 knots. Payback on the system compared to conventional diesel is a short few years but the major advantage is clean and reliable operations.

BCFS has had a preference for doing its capital spending overseas but the company should already be working with one of the world's leaders in natural gas engine technology, here in this province. Westport Innovations has existing capabilities along with related technical contacts throughout the world. With British Columbia's abundant natural gas, it is a serious error for BC Ferry Services to have pioneered no work in this field.

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