Hansard - Fisheries and Oceans Committee, May 3rd, 2005

Standing Committee on Fisheries and Oceans

HOVERCRAFT – Coast Guard Commissioner Questioned by John Cummins

EVIDENCE number 35,

Mr. John Cummins: Mr. Adams, you talked in your response to Mr. Hearn about on-going expenses. One on-going expense from the budget of last fall was $23.4 million for the acquisition of the hovercraft in the Quebec region. You put in place a 20 year-old hovercraft in British Columbia with 14,000 hours on it at a cost of under $10 million and now you're going to spend $23.4 million for a new one in Quebec. I wonder how those decisions were arrived at.

Commr John Adams: The question with respect to the west coast was one of time. We needed something as quickly as we could get it. Given that it's a very difficult resource to get one's hands on, and given that there are very few reputable manufacturers that can produce the type of hovercraft we need, we went to the source and managed to get, identify, as has been pointed out, a used hovercraft, had it rebuilt basically from the metal out, and that's what is now in British Columbia.

What we're now looking for is a new craft. The other thing to remember is that the craft in British Columbia is a back-up to the SIYAY, which was a brand new hovercraft when it was brought into service. As a back-up we felt we could go the route of the refitted hovercraft, the PENAC, which is now in service and has been meeting all the requirements as specified. Now what we're doing is replacing the hovercraft in Quebec with a new hovercraft because it's not a back-up.

Mr. John Cummins: Let's look at new, Mr. Adams. I inquired with Hoverworks about adding a hovercraft to my fleet and they tell me they could build new for between 4.2£ million and 4.8£ million, which I understand to be around $10 million. In the United States in Seattle they're currently building a new hovercraft there for service in Alaska. This is the newest version of the 24 year-old design which is similar to the existing hovercraft in British Columbia--not the old one you bought, but the other one. This is the newest upgrade of the hovercraft. It's a 95 foot vessel, floats over six foot seas on a cushion of air, 50 passengers, two wheelchairs, 23 tonnes of inbound groceries or outbound fish, and is able to haul an ambulance. They're building that in one year and they're doing it for $8.8 million U.S.

It took you over two years to get the Liv Viking to British Columbia. Why didn't you build new for $8.8 million rather than $23.4 million or rather than the less than $10 million for this used baby?

Commr John Adams: We have to be careful and we must compare apples to apples as opposed to apples to oranges. If you look at the pure build costs you could compare those, and that's what you'd have to do. What we, of course, have got built into our numbers is everything from training, through to spare parts, through to cost of delivery, etc.

Frankly, what we'll do is go to trade. What you've quoted is what we've got in the budget protected in order to procure a new hovercraft. We will go to trade and whomever can build the hovercraft that can meet our specifications at best price is where we'll go. The challenge we've got is when I say best price we have to look at life cycle costs. What we're looking at in that regard is we'd like to have comparable hovercraft, in other words, the spare parts are interchangeable, the training is identical, etc. All of that will be factored in and in fact when we go to seek final approval to procure that will all be taken into consideration, so it'll be a sum total.

Mr. John Cummins: You're telling me that this $10 million new vessel built in the United States is not comparable to what you're trying to do with $23.4 million. In other words, $23.4 million you're going to buy spare parts for this $10 million vessel and some training. Well these guys are already trained on a vessel that's similar to the new one being built in the United States. Training isn't an issue here and I can't imagine that you're going to spend more money on spare parts than you would for new. Why is it that you can't build for $8.8 million U.S. on the west coast in Canada? They're building this thing in Seattle 150 miles down the coast from Vancouver. Why can't you do it if the Americans can do it and why is it going to cost $23.4 million?

I can't answer that because in the American's case they could be building a line of them and that might be the quote they got.

Commr John Adams: But frankly, if that vehicle is identical to, will meet our specification, and there's no reason why we can't go there, but I want to compare construction costs to construction costs and I want to take into consideration late-life cycle costs as well.

I just want the witnesses to be aware that the committee is exceedingly distressed to hear about the reduction of enforcement officers, particularly given its very, very strong first and second recommendations in its unanimous B.C. salmon report. And that, I'm sure, will be the subject of some questions for the deputy and for the minister.

I'm really sorry that we lost 45 minutes, but it's beyond our control. We will not be returning.

Mr. John Cummins: Mr. Chairman, I certainly have questions on this enforcement and I'd like to see the enforcement people back, at least.