[gars]

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The total purchase price of the three new ships was €206.4 million or approximately CAD $325 million at the time of the contract's announcement (September 2004). According to BC Ferries at this time, this was 40 percent lower than the lowest Canadian shipyard's bid.[3] Since that time, the Canadian dollar substantially increased vis-à-vis the euro. As of March 2006, due to exchange rate fluctuations, the total translated purchase price dropped to CAD $290 million, an unanticipated savings of approximately $35 million in BC Ferries' favour.

There were 14 bids for construction in total, three from within Canada, and the remainder from elsewhere. The decision to build the ships outside of Canada was unpopular, particularly in BC. There were parties who argued that the Federal government should have stepped in to ensure these new ferries would be built in Canada. Part of the argument was that for reasons of national sovereignty, Canada needed to retain a shipbuilding industry, so there are Canadian shipyards to service Canadian Naval vessels. BC Ferries intended to request the Federal Government waive the 25 percent import duties (there is no free trade agreement between Germany and Canada), but BC Ferries must show that West Coast shipyards are no longer capable of constructing a vessel the size of the ‘Coastal Class’ ferry. [4]

Another reason BC Ferries chose Flensburger's bid was that aside from taking the risk of construction cost overruns, Flensburger also provided guarantees on the ships' delivery dates and performance.

For example, if the ships are not timely delivered to Victoria, BC, then BC Ferries was permitted to levy penalties of CAD $40,000 (€25,000) per day up to a maximum of $6 million. After delays of 180 days, BC Ferries could rescind the contract for a full refund. However, construction proceeded ahead of schedule at one point and was completed under budget.[1][5]

Additional penalties were based on vessel performance. Had a vessel's service speed fallen short of her contract performance specifications, BC Ferries could levy a fine of CAD $160,000 (€100,000) per tenth of a knot below specifications. If the ferries had fallen one knot below specifications, BC Ferries could similarly cancel the contract for a full refund. However, as BC Ferries is in dire needs of new ships to replace its ageing, single hulled V-class ferries, a problem increasingly in the media cross-hairs since the March 22, 2006 foundering of the MV Queen of the North, it was unlikely the corporation would have cancelled any new ferry for being too late or too slow.

According to BC Ferries, none of the Canadian shipyards' bids provided similar guarantees. The cost certainty guarantee was a significant consideration for BC Ferries (especially since the recent steel price increases) after being liable for cost overruns on the Pacificat fast ferries, which were partially responsible for toppling the New Democratic Party of British Columbia government in the 2001 provincial election.

BC Ferries also acquires the new vessels' design plans as part of the contract; BC Ferries does not hold title to the design, plans or drawings of the Spirit Class ferries.

Coastal class ferry - Wikipedia, the free encyclopedia