Despite a combined loss of more than $3.2 million in the past two years on the Buckley Bay-Denman Island Route, BC Ferries says the Baynes Sound Connector is performing well so far.
In its annual report to the BC Ferries Commissioner, the corporation posted a net loss of $1,647,000 in 2016, and $1,586,000 for 12 months which ended March 31, 2017.
In early 2016, the route was overhauled with a $15-million, 78.5 metre cable ferry, with the capability of carrying 50 vehicles and 150 passengers.
BC Ferries spokesperson Deborah Marshall notes there are a variety of reasons for expense increases in the past two fiscal years, with higher than expected maintenance costs incurred as the corporation learns the new systems and manages arising issues.
This includes cable change-outs in 2017/2018 to replace original cables because of accelerated corrosion due to dissimilar metals.
鈥淭he source of this issue is being resolved,鈥� she adds.
For a portion of fiscals 2016 and 2017, terminal maintenance reps were on site daily, which brings extra labour costs to manage primer pump issues, but Marshall notes this is no longer required.
鈥淥ther issues such as fire monitor systems, HVAC, lube system, hydraulics and vibration are driving additional costs in the early years of the new vessel operations.鈥�
An incremental one-time training and familiarization costs were incurred in fiscal 2016 as BC Ferries transitioned to the new system, she adds.
鈥淎 portion of MV Quinitsa maintenance and refit expenditures were allocated to Route 21 (Buckley Bay-Denman) in fiscal 2017 because she relieves the Baynes Sound Connector for scheduled/unscheduled out-of-service periods. Notably, fiscal 2017 was a particularly high maintenance year for the Quinitsa as she underwent a major dry-docking which normally occurs every four years.鈥�
There was also an operational expense - a public boat launch that was constructed at Denman West for the sole use of Denman community members, she says. The boat launch was part of the redevelopment of the Denman West terminal to ready for the cable ferry operation, and Marshall notes BC Ferries was unable to capitalize because it is not BC Ferries land.
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Originally, there was a projected cost savings of more than $80 million over the 40-year life of the Baynes Sound Connector - approximately $2 million a year - and Marshall says the original savings estimate was based on an expected crew level of three.
鈥淲ith an actual crew level of four, we recalculated the 40-year savings to be approximately $73 million. The majority of savings would arise from fuel, labour (crew of four versus six) and maintenance (much less complex machinery and refits forecast to occur once each 10 years versus once each four years).鈥�
She adds the original business case analysis was redone in fiscal year 2017, to account for any early unexpected costs, and the BC Ferries Commissioner was satisfied with all projections.
鈥淭hat is, there are still significant life-cycle savings expected long-term.鈥�
Marshall insists it is not uncommon for new vessels to experience 鈥渢eething problems鈥� during the first two years of operation.
Marshall expects to see operating expenditures drop in future years as one-time transition activities cease and engineering continues to actively look at options to drive down maintenance costs.
She says annual savings on crew labour and fuel alone are trending in excess of one million based on operations to date.
