Raises issues of cost, decision not to go to tender
If the provincial government continues to lease a ferry it formerly owned beyond the end of this month, the official opposition’s critic for transportation and works says the government’s choice will prove costly.
The provincial government’s lease on the Norcon Galatea expires at the end of March. — Telegram file photo
“This is a vessel that government sold for a very, very low cost and have leased it back for a much higher cost than they sold it, claiming that it’s in like-new condition,” said St. John’s South Liberal MHA Tom Osborne with regards to the Norcon Galatea, which was known as the MV Hamilton Sound before the government sold it for $214,000 in 2011.
“If the vessel is in like-new condition, why did government just not refurbish the vessel and have a swing vessel on hand without having to spend large amounts of taxpayer dollars putting out short-term contracts to hire a swing vessel when needed?”
Built in 1968, the former MV Hamilton Sound was considered a top candidate for replacement several years before the government finally sold it.
In November, the government announced it had negotiated a short-term contract with Norcon Marine Services to use the renamed vessel. The company had reportedly invested more than $1 million as part of an extensive overhaul.
That month in the House of Assembly, Liberal Leader Dwight Ball said the government was leasing the vessel at a cost of almost $5,800 per day.
Speaking with The Telegram Friday, Transportation and Works Minister Nick McGrath defended the decision to lease the Norcon Galatea.
“In this particular case, the Galatea did provide what we were looking for, and I think it was one of the best options we could have,” he said.
The ship has provided ferry service to Bell Island alongside the MV Beaumont Hamel.
On Friday, the Norcon Galatea was tied up in Portugal Cove due to high winds and mechanical problems.
Damen Shipyards is building two new ferries for the province that are due to join the provincial fleet next fall.
One of those will serve Bell Island.
McGrath indicated government may consider extending the lease beyond March 31, adding that other companies will also be given consideration if further ferry service is required.
“It’s something that we will look at. That is an option that we have, to extend the contract with the Galatea.”
Osborne also questions the decision to negotiate a lease instead of issuing a tender.
Responding to that issue, McGrath said there was an immediate need for a replacement swing vessel following government’s decision last February to retire the MV Nonia.
“We were left without a swing vessel, so we had to go to market then to look for vessels. We researched the market to see what was available and then through that, you make your decision — do you buy, do you lease, do you go into a short-term contract, long-term contract? All of those things are taken into consideration.”