Cost-overrun issue must be solved, premier says
Premier Kathy Dunderdale speaks to reporters about the province’s plans for building new ferries. The government has said that if it doesn’t work out a deal with the shipyard in Marystown to build a new ferry, it will look at awarding the contract outside the province. — Photo by James McLeod/The Telegram
The government has drawn a line in the sand when it comes to the contract to build a new ferry at the shipyard in Marystown.
If a dispute over cost-overruns for building medium-sized provincial ferries isn’t resolved by the end of the week, Premier Kathy Dunderdale said Tuesday, the province would look outside the province to get the vessel built.
“You hear day after day complaints about ferries breaking down. It’s been an issue here for the House of Assembly,” Dunderdale told reporters.
“We need to be able to push and resolve this issue in negotiation if we can. If not, we have to go somewhere else and get our ferries built.”
The province wanted three medium-sized ferries to be built by Kiewit in Marystown. The first two were built, but they went millions of dollars over budget.
Kiewit has been pushing for an agreement to be paid more for the first two ferries before it starts on the contract to build the third one.
Last week, Transportation Minister Tom Hedderson said the government was negotiating with Kiewit, but Dunderdale said Tuesday enough is enough.
“We want this work to be done here in Newfoundland and Lab-rador, and we particularly want this work to be done in Marystown, given the economic circumstances that they’re facing at the moment.
“However, the ferries can’t be built in the province at any cost. They cannot,” she said.
Dunderdale indicated if the impasse can’t be broken by the end of the week, the government will move towards contracting somebody outside the province to build the ferry.
A representative from Kiewit would only say it’s still negotiating with the government.
‘Can’t invalidate bidding process’
“We are negotiating in good faith with the government and are confident that we can find a mutually agreeable resolution to these issues,” said Thomas C. Janssen, director of external affairs for Kiewit.
But it seems like the cost-overruns on the first two ferries amounted to millions of dollars on top of the more than $27 million that the government already paid for them.
Dunderdale said the government won’t be willing to just go head and pay whatever cost-overruns happen.
“The bidding process has to mean something,” she said. “You know, you can’t invalidate a whole bidding process by putting in the lowest bid and then coming in after the fact with millions and millions of dollars of overruns and saying, ‘Pay us.’”
This marks the second time in two weeks the provincial government has announced that it’s looking outside the province to get a ferry built.
Last week, Hedderson announced that the government will be inviting expressions of interest from around the world when it comes to building a large ferry for the Fogo Island and Change Islands run.
At the time, Hedderson said he hopes the ferry will be built in Marystown as well, but he said it might make more sense to get it done elsewhere.