Thursday, March 5, 2015

No celebration of another contract to foreign ship builder

The following was first posted here December 19, 2012. It is a reminder that TransLink is not always aligned with serving British Columbian workers' long term interests, despite the present position of trade unions representing transit workers.
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Do you use electricity, live in a space that attracts property tax, purchase motor fuel or pay fees to park your chariot or ride transit after after actually paying a fare? Well, if you do any of those things, you're putting money in the bank accounts of TransLink.

However, while the transit agency is eager to put its hands into each and every one of our pockets, it's not so keen on spending that money in British Columbia. Spending that might create jobs, as in shipyards that may or may not, eventually, someday, build navy ships, if F35's don't empty the armed forces budgets first.

The Seabus vessels have been cost effective successes and long-time symbols of west coast industrial capability but the TransLink board decided to hire Damen Shipyards Group of The Netherlands to build a replacement vessel, at a cost of $25 million. That price is 75% more than original cost of the locally built MV Burrard Beaver, price adjusted for inflation. Also, there was no announcement about fuelling the new SeaBus with natural gas, something that should have be a no-brainer in this gas-rich province. Norwegian operators are not reticent about using this fuel. Read Reinventing the wheel, timidly.

After the TransLink decision, I did note the failure of Premier Photo-Op and her Jobs Plan entourage to hold a celebration of the award of an actual contract to build an actual ship, in the Netherlands. She was more than willing to take credit for possible BC shipyard spending by the federal government so why not the same for spending of the transit agency created by her administration.

Premier Photo-Op addresses a character from central casting

Once, the SeaBus vessels were proof of BC's design and manufacturing prowess. The all-aluminum catamarans were the first of their kind anywhere in the world. Each of the two ships cost $3.7 million in 1976, $14.25 million in today's dollars. Transit officials came here from all over to examine this highly efficient people mover.

Perhaps because it was an initiative of the Dave Barrett government, a Vancouver Sun columnist called the SeaBus project "a great civil service boondoggle." It was no boondoggle. The entire project has been undeniably successful and 25 years passed before a vessel missed a single day of service. Operators claimed 99.993% reliability. Despite 35 years of service MV Burrard Beaver continues dependable operations day after day hauling thousands of passengers in comfort and safety.

The TransLink board is populated entirely by affluent dilettantes, who don't worry about where next month's rent money is coming from. Jobs? Most of the directors are collecting remuneration from numerous sources, many of them funded by taxpayers. Too bad there is so little commitment to creating employment for British Columbia trades people.

Here is a list of TransLink diectors, not exactly representative of the community it allegedly serves. Note the absence of people representing labour, community groups or, gasp, transit users.
  • Nancy Olewiler, board chair - faculty member, Simon Fraser University;
  • James Bruce, board vice-chair - investment manager;
  • Robin Chakrabarti, investment manager;
  • Rick Christiaanse, GM at Glentel, wireless retailer;
  • Lorraine Cunningham, ship broker, agent and itinerant board member;
  • John Dawson, accountant and investment manager;
  • Barry Forbes, credit union CEO;
  • Sarah Goodman, VP Tides Canada;
  • Howard Nemtin, real estate developer;
  • Don Rose, lawyer specialized in resource industries;
  • Marcella Szel, former CNR VP, another itinerant board member;
A reader's comment to this article recognizes the multiplier effect of spending. It is an important issue when government or consumers consider purchasing locally created goods and materials versus the import of finished goods. From a helpful British site, Economics online, we have The multiplier effect:
"Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending.

"...It is important to remember that when income is spent, this spending becomes someone else’s income, and so on. ..For example, if 80% of all new income in a given period of time is spent on local products, the marginal propensity to consume would be 80/100, which is 0.8.

"Hence, if consumers spend 80% and save 20% of every $1 of extra income, the multiplier is 5, which means that every $1 of new income generates $5 of extra income."
Potentially, local manufacture of a new SeaBus at $25 million, could add more than $100 million in spending to the BC economy. That would depend on the actual multiplier effect and the proportion of goods and services originating here.

Nevertheless, if TransLink thinks they can save 8% buying overseas, they have no understanding of first year economics. A cynic might imagine other reasons for sourcing large acquisitions overseas. It's some BC Liberals do frequently.


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27 comments:

  1. Fire them all. They've proven time and again that they can't make decisions that benefit the taxpayer, the transit user and most of the all, the BC economy. The BC Liberals and their appointed shills need to go, ASAP!!!

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  2. Is there no end to this? When will BC residents finally snap?

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  3. I e-mailed Smythe on NW this morning with the fact that local companies will never be able to compete as they have to pay those high translink taxes. He never mentioned that those taxes have to be factored into any bid.Support local business not this government.

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  4. Unbelieveable!...The BC Liberals...actually "turning" on business in this province...some things never cease to amaze. Guess you can't have it your way all the time eh. The BC economy needs any jobs it can get, and your tax regime put the "kibosh" to this opportunity. Too bad, we keep losing good paying jobs at this rate, we are in big trouble.

    I would have loved, to see premier photo-op and the "entourage", show up and actually celebrate the awarding of the contract to a company in the Netherlands. The perfect ending to a "joke" of a political career....

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  5. I agree with anonymous.Sack these fat cats who live off the public teat! Another example of BC Liberal flacks populating the public service.

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  6. Just thought of this... meanwhile roads that have been ploughed for the last 40 or 50 years go unploughed, and ice destroys cars and injures people on a 3 billion dollar bridge. Apparently these overpaid bureaucrats never thought that it actually snows sometimes in Metro Vancouver.

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  7. I wonder if, when they evaluate the cost, they consider that some of the cost will actually come back to the province/feds in the form of taxes. So a $25 million project actually costs somewhat less than that when you factor in the taxes returned to the province/feds.

    Same comment goes for the ferries built in Germany.

    In fact, the beancounters should take into consideration the multiplier effect as well. When we build ships overseas, that money is gone....it supports people, investors, and social services in a foreign country instead of local people, investors, and communities.

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    Replies
    1. Thanks for this comment. I added a discussion of the multiplier effect to the main article.

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  8. Doesn’t the 25% import tariff apply to a vessel this size? They removed it in 2010 for large cargo ships and ferries like the ones BC Ferries bought in Germany, but it’s my understanding it should still apply to this one.

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  9. Feds and provinces have explicit and implicit agreements to avoid taxing each other in many cases. I suspect TransLink took that into account while they ignored the buy local aspect.

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  10. BC Liberals motto is 'Screw the Taxpayer'

    There is no other explanation, as everything they do this is what happens.

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  11. Not one of the Translink directors you mention has ever had a job that actually adds value to goods. They cannot possibly understand the term "pride of workmanship". They most certainly do not understand the multiplier effect, nor the worldwide respect our shipbuilding industry has garnered. We have the best naval architects in the world based right here in Vancouver, and the most cost conscious and efficient shipyards. We have a reputation in the marine and logging industries for building the most robust equipment in the world, tested in the most extreme conditions imaginable. I dare say that extends to our old "Department of Highways" before privatization. This decision is not indicative of a business friendly government.....it is indicative of a government that has pledged support for only the largest foreign corporations and the financial benefit of a few people that have employed good lobbyists. I would like to know who was employed to lobby for the Damen Group. When this new SeaBus breaks down I for one would say take it back to the Netherlands for fixing....I'm not gonna bail you out.

    Preposterous. I say should any members of this Board of Directors need anything fixed or built around their homes let them do it themselves, with their own hands.

    These people are the epitome of self-entitlement at the grandest scale. Just look at the renumeration they expect for no value added.

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  12. Who knows where the translink b of d's brains are but they certainly aren't in B.C. Awarding the contract to a B.C. company would certainly make economic sense because the workers would be paying income tax on it, not to mention, out buying things with the money.

    Not knowing who the board's social circle includes, I certainly would want to know. Perhaps are former premier has spent some time across the channel in Holland drinking too much Dutch gin or visa versa.

    However the Netherlands got into the mix is beyond me. I would follow the money. I have no problem with the Netherlands, I was born there. But I am a Canadian citizen & I want my tax dollars spent in Canada. I doubt saving 8% had very little to do with awarding the contract to a company in the Netherlands. I say, follow the money & the social cirles.

    I know Christie likes her ads of Canada begins here. Perhaps we should add & B.C. starts in the Netherlands.

    The people on the Translink board certainly must hate B.C. citizens and companies like SeaSpan. The contract would have been good for them. They are still waiting for the feds to start sending them the work for the $8B for naval ships.

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  13. I do wonder if any of the translink board got a trip to the Netherlands to "view" the company's work yards?

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    Replies
    1. They'd be viewing the wrong yard. It apparently will be built here: http://www.damen.nl/en/companies/damen-shipyards-singapore

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  14. Wow, three major pieces in one day, Norm? You were on fire!

    BC Jobs plan? I'm surprised that this one wasn't announced at 5:00 on Friday. Christy is REALLY going to want to stay low through the holidays.

    Question, Norm: is Translink answerable to the provincial government when they want to do major purchases? If so, this is even more of a travesty.

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  15. This TransLink board of "amateurs" was specially chosen to be Liberal 'lick-spittles' approving Liberal transit policies. They collect hefty stipends for doing nothing. TransLink is broken, our public transit system is broken, our regional planning is broken and now, apparently, the new $3 billion plus Port Mann Bridge is broken (ICBC has now received over 60 claims due to falling ice and other incidents from yesterday's fiasco)!

    The BC Liberals have bankrupted this province, while giving approving lick-spittles large sums of money to baa, baa, baa, like sheep. If Adrian Dix cannot fix this mess (and it now looks that he can't or will not do so) the NDP will be one term wonders, while a free-enterprise, BC Liberal/Socred Mk. 2 is born out of the ashes of today's most disgraced and corrupt government.

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  16. It was announced this morning that the bridge builder will be picking up the tab for any vehicles that got ice bombed on the Port Mann yesterday. Meaning we, the taxpayer, are on the hook AGAIN for the incompetence of the Liberal lickspittles!

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  17. There seem to be questions to be answered. Maybe the most important questions are where is the media, where is the NDP opposition?

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  18. Vaughn Palmer gave the incredible lame excuse that building ships for the military is different than building ferries for Canada. How can a man who is an apologist for this provincial government be the dean of the Victoria press gallery. Today on CKNW, Michael Smyth demonstrated the emperor of BC pundits is actually unclothed.

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  19. In the good old days of working in the shipyards, Burrard Dry Docks and Vancouver Shipyard and Vito's on the Fraser River, they created Employment Insurance credits to take to the bank went the jobs were completed. EI funds were coming out of the Government of Canada's reserves whereas the Provinces financial responsibility kicks in when the EI runs out. Nothing's changed, except the government of past built BC Ferries in British Columbia. The new era breed figures its best to ship jobs over seas.

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  20. When does the ripoff of the BC taxpayer end? BC Jobs strategy? Working well for offshore companies and those employed by them. Fiscal integrity and responsibility, sorry coercion and taking care of the "entitled", seemingly doing very well. The bidding process in this province for large projects whether ships, power dams, bridges, or other infrastructure must be broken.
    Jobs for British Columbians, and taxpayer savings must be the priorities. The padding of the pockets of government "friends", or manipulation of contracts to ensure that "associates " of reigning political parties are taken care of, is NOT, what any party in governance was elected to do.
    There has to be a way of calling these clowns out, and to go after them for the incredible mess, this province has become. Surely our legal system cannot be that broken!

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  21. What Credit Union is Barry Forbes CEO of? I ask because we have a significant amount of money we want to move from RBC (poor return on investments) and do not want to go to any organization that has that kind of connection of Translink.

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  22. President & CEO Barry Forbes retired from Westminster Savings Credit Union after 41 years with the organization, effective December 31, 2012. He now also serves as one of the Directors of E-Comm, Emergency Communications for British Columbia Incorporated, private company owned by public agencies and governments. It spends about $50 million a year but does not appear to report details to the public of how that money is spent.

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