Friday, April 8, 2016

Liberal return of 0.005% (or less) on $17 million (or more) UPDATE

September 2015, I reported that a source told me the Queen of Chilliwack had been sold to its new owners in Fiji for $100,000. BC Ferries refused to comment on speculation, refusing even to deny the reported amount. However, here's what is reported on their financials statements for the nine months ended December 31, 2015:

The highlighted numbers must be netted. The first shows a reduction in asset cost; the second shows a removal of accumulated depreciation. The net amount taken out of asset accounts would be $114,000 and the income statement shows a gain on disposals of $32,000. indicating vessel proceeds of no more than $146,000, perhaps less because the gain or loss on the vessel disposal is not segregated from dispositions of other assets. The vessel sale proceeds range is consistent with the report I made in this item below, published Sept 21, 2015. BC Ferries does not state this disposal relates to the Queen of Chilliwack but I'm not aware of any other vessels sold in the period.

* * * * * * * * * *
In April 2015, MLA Clair Trevena spoke in the Legislature during estimates of the Ministry of Transportation and Infrastructure:
We had a refit which began just five years ago and lasted for two years, a refit of the Queen of Chilliwack. The minister, I'm sure, is well aware of the Queen of Chilliwack. This is the one that was used on some of the Sunshine Coast runs as a backup ferry and was used in what was then route 40. As I understand it, this was $15 million.

The refit, completed by 2012, included a new car deck, watertight doors, new propeller seals, a new instrumentation control system, new sewage treatment, holding tank, pump-out system and life-saving systems. The second phase, which began in 2012, was the installation of three new generators, electrical and HVAC system upgrades and a renewal of the propulsion control system.

This upgrade meant that the ferry was going to have a significant increase in its life...
Last year, a letter by Transportation Minister Todd Stone stated the refit cost of the MV Queen of Chilliwack was $17 million. Now, the vessel is leaving for Fiji where it will add to transportation services provided by the former Queen of Prince Rupert. Two weeks ago, new owner Subarmani (George) Goundar - a former BC Ferries manager - talked with the Fiji Sun:
Company managing director, George Goundar said they finally sealed the deal over the purchase of the vessel last Friday from previous owner, British Columbia Ferry Services. The negotiations over the acquisition took about two years.

He indicated that the travelling public would be impressed at the state-of-the-art facilities this vessel has to offer.

Mr Goundar explained that the new vessel is 36 years old but is of very high standard, has updated technological equipment and state of the art passenger facilities.

He revealed that the previous owner had spent more than $FJD 40 million ($28 million Canadian) on upgrade and maintenance just two years ago.
Shortly after renovation of the Queen of Chilliwack was completed in 2013, BC Ferries announced it was retiring the ferry.

The new owner paid $100,000 and, reportedly, the deal calls for the ship to be delivered with full fuel tanks. If true, the fuel would be worth far more than the selling price.

In the major "life-extension" refit completed shortly before retirement of the Queen of Chilliwack, flood control doors were added. According to manufacturer MacGREGOR, these are installed:
to improve the survivability of RoRo passenger/car ferries damaged at sea. These improvements were developed to prevent a rapid capsize so that a rescue operation could be carried out in an organised manner.

One efficient way of improving the survivability of RoRo vessels is to divide the car deck into water tight compartments with longitudinal or transverse barriers. These flood control doors prevent the free water from spreading over the whole car deck, and thus decrease the total free surface effect and its potential to capsize the vessel.

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  1. Waiting for a response to this from Minister Stone. . . . . .. ZZZZZZZZZZZZZZZZZZZ

  2. With the giveaway sale of the Fast Ferries and now this one, we can see that the BC Liberals have a knack for finding the lowest bidder. And providing full tanks of fuel… at a loss?

    It would have been better to recycle the fuel in other vessels and sell the boat for scrap or sink it for an artificial reef.

    I understand there are more boats to be flogged.

  3. I am glad to see you writing again. After your conversation with Jessop on CFAX last week, I've been waiting for new material about BC Hydro.

  4. Mr. Farrell...Who is George Goundar?...


    George comes from a family that originates from Koro Island. He was born and brought up on the Island before moving out for higher education and greener pastures. He is not new to the local shipping industry as his family has owned and operated a schooner ferry (MV Tui Levuka) for more than 20 years.

    Mr. Goundar is a skilled marine engineer with over 30 years of experience in service, repair, maintenance and management of the engine rooms of various shipping vessels, carrying passengers and cargo. He has held a variety of senior roles with BC Ferries for more than 20 years. It was in 2011 when he saw his dream coming true after he had purchased the vessel, Lomaiviti Princess, which was formerly known as the Queen of Rupert. His passion and desire to enter the inter-island shipping industry in Fiji was instigated after his recent travel experience to the islands. It was heart touching for Mr. Goundar when he saw the high fares that came with very poor standard and level of service. He felt for the communities and people out there in the outer islands who sweat to earn every dollar. He had then decided that he will one day change this so that the people are able to get value for their dollar. He has moved back to Fiji with his strong ambition that he has for the people in Fiji and to give back to the community"

    Perhaps someone should check to see if he donated money to the BC Liberal Party.

  5. Norm...It could also be a severance package....$28 million dollars?

    I wonder if John Horgan might get around to bringing this to the attention of BC`s political scene media..

    Summer break still?

  6. Without any doubt, there's a foul smell rising from The Atrium on Blanchard Street. BC Ferries spent $17 million (or $28 million) on a major update so the ferry could be parked at a dock until it was essentially gifted to an ex senior employee. The Queen of Chilliwack was constructed in 1978, acquired by BC Ferries in 1991 and immediately given a major overhaul in Victoria. In 1996, it got another multi-million dollar refit and assigned to summer mid-coast service out of Port Hardy. It got another refit in 2006 and the major ones of 2011 and 2012. It's not been in regular service since the last renovation.

    BC Ferries want us to believe that a 37 year old ship has no value in the marketplace but the company has 19 older vessels still in service. One of those was given a refit in 2013 that would extend life of the then 44 year old ship for 15 additional years.

    Many people know the Queen of Chilliwack was not superb vessel. If today, it is worth nothing, then BC Ferries blundered when they spent millions on it a short while ago. Unfortunately, this is just one more multi-million dollar mistake of an incompetent senior management and a Board of Directors that cares only about the big cheques they get for doing nothing other than staying quiet.

  7. Holy Cow! A house in Vancouver costs $1 million. A ferry only $100,000? With a full tank of fuel!
    Just think what an enterprising co-op student could do with a windfall like that.

    1. You aren't kidding. Purchasing a B.C. for $100k with a full tank of gas, would be any person's dream. wouldn't have to tie up, just float it around. If I'd know it was going that cheap, I would have purchased it and used it for weekends and rented it out as a party boat. Great place for Grad Parties, watching the fire works and it already has a great kitchen. They sold it for $100K and we didn't get to make an offer on it.

      Would some one check the Panama papers to see if any of the players are listed. Come to think of it the banks in G.B. are being required to "fess" up to "dealings" with that nice law firm.

      Those b.c. lieberals just don't know how to conduct business except when it makes no business sense. An auction would have brought more money.

  8. Last week Global News reported " The ferry corporation says it is still in the process of selling two other boats and disclosing what was paid for this one (Quuen of Chilliwack)could undermine negotiations."

    So was the brass at BC Feries just hiding the information from the public because it's such a stupid selling price. After all if I was bidding on one or two of the "other boats" , I would do anything in my power to find out how much the Chilliwack sold for... and I guess all you need to do is read the Fiji News.

    Guy in Victoria

  9. The vessel was a single compartment vessel, it no longer meets the damaged stability requirements for today's ferries.
    The passenger count had to be dropped in order for it to continue to sail.
    The sale is not the question, the question is "Why did BC Ferries spend so much on a ship with a very short life span?"

    1. Absolutely. It was heavier than typical ferries of its size because it was originally designed to sail in the far north. It was slow and unreliable and costly to operate.

      Spending a pile of money on the ship and then gifting it to a former employee raises questions that should be addressed by the RCMP.

    2. Why hasn't it? If the Attorney General was asked why, would she then be implicated if she responded with a shrug?

  10. From reading the comment from Grant G, perhaps those great humanitarians{the libs} basically gave the ships away so that George could realize his dream of giving cheap affordable transportation to his fellow Fijians. Looks to me like that's what is going on here. Just saying.

  11. I see the MSM has not picked up on your article as yet & BC Ferries has not yet released a report saying your story is all wrong. Maybe that's what the MSM is waiting for to prevent any work.

    Guy in Victoria

    1. BC Ferries prefers to conduct unusual deals in secret. Another example is the $25 million 2nd mortgage it advanced to one of Victoria's best connected and wealthiest property developers. That loan - one of the lowest rate second mortgages anywhere - has been owed to BC Ferries for five years.

    2. Is there any way to get an update on thatoan to the Jawl family. I remember Hahn talking about how great it was and it would save the company some money.

      Guy in Victoria

  12. Thanks for your work on this Norm. Where did you get the information about the selling price and the full tanks of fuel?



  13. IF the fuel tanks were full, the capacity is 450 tonnes. This is approximately 508,000 litres! That's in the order of $500,000 worth of fuel… for a $100,000 sale.

    I'm trying to find a word to describe my feelings about this — but I can't get past four letters.

  14. Welcome back Norm, hope the summer vacation went very well.

    Another great piece of reporting and research. The BC Liberals...supposedly the best able to handle taxpayer dollars. Guess that's one more argument out the window. Why is there no financial oversight is these matters? In the corporate world shareholders would be screaming for heads on platters. The return is a sick joke!
    Manipulation of the MSM is all part of the elaborate scheme to keep the taxpayers in the dark. Criminal collusion.... an organized criminal network, investigation would reveal much I'll bet.
    The US has much tougher laws in this area , perhaps we need to find a way to undertake discussions with both US and Canadian Justice departments, as an aggrevied third party ( taxpayers), in order to find a way to deal with the blatant abuse of taxpayer funds.

    1. As suggested earlier, lease the Fleet to the Washington Ferry Corp. It would not only run more efficiently (see Norm's cost comparisons from earlier post) it might generate a second bidder for future ferry sales.

  15. As the the Liberals continue to do there filthy ways of attempting to run this Province in to the ground ,the mainstream media and there hack reporters on the back of the people turn a blind eye to all this corruption.The opposition has to figure out away to get this all out as the silence is is not good for there success God help us if these criminals get back in. Thanks Norm

  16. Similarly to any other Lieberal deals, the transparency is opaque. Why wouldn't the Ministry of Housing grab this bargain? Surely they could house more than 1 refugee family on a ship this size? Or advertise it on Crown Disposals? I'm sure there are dozens of Vancouverites who would trade in their $1.5 million dollar houses for a $100,000 'barge' and we could have saved the full tanks of fuel, plus the fuel to sail it to Fiji. Heckfire, Washington Marine paid more than that for the 'discounted' Fast Ferries. Boggles the mind, doesn't it.



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