Fast Ferry Scandal - Primary Factors For Project Failure

Primary Factors For Project Failure

The primary factor for the project failure was the overall cost of building three fast ferries was substantially more than advertised on the outset of the project in 1994 when it was projected to cost 210 million.

The press called the bc auditor general Morfitt's comments perhaps the most damning report the bc auditor general's office has ever issued. His auditor general report stated there was significant breakdowns in governance and project management were major factors in the failure of the fast ferry project. These breakdowns were identified as follows in Morfitt's government report:

Governance:

• The Ministry of Transportation and Highways was involved in the project to the point where at times, board decisions were forced under directives rather than a result of due diligence.

• During the project, the BC Ferries’ subsidiary, Catamaran Ferries International (CFI) board responsible for managing the project was replaced in its entirety without just cause in order to allow for more representation by B.C. Ferries. This action appeared to be a misunderstanding of good practice.

• During the project, the chief executive officer for CFI also held the same position at BC Ferries. By representing both the constructor and the future owner and operator of the fast ferries it made it difficult to objectively report on progress without implicating himself in almost every aspect of the troubled project. Thus, little or wrong information was available throughout the project.

• Little or no research was completed to establish the contributing factors that led to the decline of B.C.’s shipbuilding industry. Information on current infrastructure, competencies and viable partnerships was not analyzed.

• Despite opportunities, careful re-evaluation of the project was not undertaken.

• No clear reporting structure or government expectations existed to guide the project.

• BC Ferries had initially recommended that a comparable ferry be leased for trials in coastal waters, but the Government decided to forego testing and committed to the construction project regardless.

Project Management:

• A risk analysis was not completed prior to the decision to proceed was made.

• The approved budget and timeline was established for the project without research and prior to the completion of design specifications or selection of contractor.

• The Fast Ferry business plan was not completed prior to project commencement due to the rushed nature of the project.

• Time and cost was poorly managed due to the inability to secure a fixed-cost contract with an experienced supplier.

The auditor general report was later criticized in a Legislative standing committee by mla Roy Kasper for ignoring and not accounting the benefits to BC and Canada in income taxes etc. from building the ships in BC.