Ferry findings

Support is coming from all corners for recommendations made in an Auditor General's report on Marine Atlantic released Thursday.

The report calls more federal government support for the Crown corporation and better planning at the ferry company.

Groups including the provincial government, the province's manufacturers and exporters, and the tourism industry association all released statements of support in the hours following the report's publication.

The company isn't arguing either. In its official response to the report, Marine Atlantic agreed with all recommendations put forward by the auditors. The company also put forward a plan on how it intends to fulfill each recommendation.

The auditor's findings note two "significant deficiencies" at Marine Atlantic: what it calls strategic challenges, and operational planning and capital asset management.

"Marine Atlantic is at risk of being unable to deliver the services it is responsible for providing, due to unresolved strategic challenges that will require support from the government to overcome," states the report.

Aging ferries and shore-based infrastructure, lack of capacity to meet demand, and failing to meet government mandated cost recovery targets are identified as immediate challenges.

"Marine Atlantic needs to agree with the government on a plan of action, including long-term funding, to overcome these challenges," the report continues.

The company submitted a proposed fleet renewal plan to the federal government in the 2007-08 fiscal year, but it was not approved. The Minister of Transport directed Marine Atlantic to undertake further cost-benefit analysis and cost feasibility studies to determine the specific requirements and costs of a fleet renewal plan.

The company submitted its revised long-term strategic plan, including plans for fleet renewal, to government this fall.

Marine Atlantic's Board Chair Rob Crosbie said the 25-year scope of the plan makes it challenging to predict traffic levels, technological changes and other aspects.

"But the document, from our perspective, has been completed and is in Transport Canada's hands and we're hopeful that they'll be able to get some answers as to the direction in the near term."

Money

Money is a main theme, and Mr. Crosbie says that's something that must be dealt with through the federal government.

"The number one issue that this report brings up deals with getting the asset renewal and revitalization plan approved so that Marine Atlantic can plan for the future," he said.

Mr. Crosbie said many of the recommendations will require "substantial funding and Marine Atlantic relies on [Transport Canada] for that funding."

Marine Atlantic is expected to recover between 60 and 65 per cent of its operating costs, plus any fuel costs above an approved level. Things like vessel charters, capital improvements and pension plan top-ups aren't counted in that recovery figure.

The auditors also noted the company exceeded its operational budget in each of the last three fiscal years. Mr. Crosbie said much of that is due to unexpected maintenance issues.

"You have an aging fleet, you have aging infrastructure and when you have a problem, you fix the problem, and the financial side of it catches up to you later," he said.

"This is probably one of the harshest environments in which to run a ferry service and on top of that you have a fleet that's getting older so you're going to run into these sorts of issues. Once you start working on the vessels you're going to find more things that you need to do, not fewer things."

Planning

The auditors also call for better planning at the ferry company, including managing planned maintenance, forecasting human resource requirements and more.

"Marine Atlantic's capital asset management practices do not ensure that its operations are reliable and that assets are managed at the lowest cost over their useful lives," states the report.

"As a result, ferries have suffered mechanical breakdowns that have affected the reliability of service, and the physical condition of shore-based assets is poor."

Notably, the report says that ferries sailed on time only 10 per cent of the time in July and August 2008 due to mechanical breakdowns, weather delays and because the schedule did not permit additional sailings.

Mr. Crosbie said the mew management personnel added to the corporation over the past year will go along way to addressing this need.

"The previous management group worked very hard toward these issues, but with everything else that was going on there just wasn't the management capacity... the ability to have enough people to handle all the issues.

"The management renewal and the investment made in additional management should assist Marine Atlantic in improving the service to the client, so hopefully they'll see a significant improvement in that area this year irrespective of the answers on the long-term asset renewal which will take a period of time to implement," continued the board chair.

editor@gulfnews.ca