Monday, March 10, 2008

Is BC Ferries taking on red ink in record proportions?


Are the ingredients in place for a financial crash at BC Ferries that may change the nature of the ferry system in British Columbia forever? If you digest the numbers as presented by the on line website the Tyee, you might think that they may be taking to the life rafts very shortly.

The Tyee is reporting today that in the last quarter of 2007, that being the last three months of October, November and December that BC Ferries lost 7.8 million dollars, up decidedly from 2006 when the service reportedly lost 1.8 million in the same reporting period.

This precipitous drop in revenues comes despite the fact that ferry rates have been steadily increasing along BC’s coastal fleet for the last couple of years now.

While the big money routes that run between the Lower Mainland and Vancouver Island are holding their own when it comes to passenger levels, the northern routes have seen a dramatic drop in ridership, which of course can partially be attributed to the fact that for a good portion of 2007 the North Coast and Charlottes only had one ferry to service the many daily routes of the region.

The Gulf Island and other secondary coastal routes have also seen a drop in passengers where levels have decreased by 2.4 per cent.

In it’s press release announcing the quarterly figures the Ferry corporation reminded interested observers that: "The company utilizes the third and fourth quarters to perform upgrades, maintenance and refits and to undertake mandatory inspections on the majority of its vessels.”
.
That could account for some of the heavy losses in the quarter outlined, but without a detailed list of how much was spent on refits, maintenance and such it still leaves a good portion of the red ink unaccounted for.

The ferry corporation in addition to the reduction in income, is also reported to be carrying a heavy debt load. Reported to be 750 million dollars since the sort of yes, sort of no; privatization program took place in 2003. Although some observers and analysts suggest that number is flattering to BC Ferries and that the real debt may be somewhere along the lines of 1.5 to 2 billion dollars.

It’s a timely disclosure for NDP ferries critic Gary Coons, who has been a constant critic of the handling of the Ferries issue by the Liberal government and of the secrecy that seems to be coming out of the BC Ferries head office.

Coons has called for the ferry service to be better funded by the provincial government and treated more like the provincial highway system (though that may not actually be the best recommendation considering the state of some of the province’s highways!).

He points to the ever spiraling cost of riding the ferries as partially responsible for the decline of ridership, as well as concerns about services in the more isolated areas. He learned of many troublesome issues during his recent tour of ferry dependent communities, taking questions and concerns about the Ferries along the coast and on the Charlottes.

If the northern routes and coastal systems continue to suffer losses and declining passenger levels, there are fears that the Ferry Corporation may jettison them, farm them off to separate operators or just reduce service out right.

Because of the now somewhat privatized nature of the Ferry Service, it’s much harder to gain information on how the finances are handled, what the direction is and what the future may hold.
However, if the financial crunch is as dire as seems to be intimated by the Tyee, then surely a more transparent method of accountability is required of the Ferry Corporation.

As vital a service as it is to British Columbians, the regular users of the ferries and the taxpayers of British Columbia need to know just what the state of their service is and what needs to be done to get it working for the people of the province.

No comments: