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Post by Retrovision on Jun 12, 2006 12:03:45 GMT -8
[glow=blue,1,300]www.bcferries.com/news/files/06-031bcfreleasesyearendresults.pdf[/glow] BC Ferries releases year-end results VICTORIA, BC, June 12 /CNW/ - British Columbia Ferry Services Inc. (BC Ferries) today announced its financial results for the year ended March 31, 2006. Revenues for the year increased $14.7 million (2.6 per cent) over last year, contributing to net earnings of $49.9 million. Fourth quarter revenues increased by $2.8 million (2.6 per cent) compared to the same quarter in the prior fiscal year. Operating expenses in the same period decreased by $2.3 million (1.8 per cent) resulting in a fourth quarter net loss of $24.8 million, a significant improvement over the fourth quarter loss of $31.3 million last year. Due to the seasonality of ferry travel, BC Ferries generates higher net earnings in the spring and summer quarters, which are subsequently reduced by net losses in the last two quarters of its fiscal year. On March 22, 2006, BC Ferries' Queen of the North ran aground and subsequently sank. Insurance proceeds in the amount of $67.9 million, net of deductible, were received after year end. In accordance with generally accepted accounting principles, as at March 31, 2006, $6.6 million of the proceeds were recognized to offset insurable losses and recorded as a receivable on BC Ferries' balance sheet. The balance will be recognized in the first quarter of fiscal year 2007. An international search is being conducted to acquire a suitable replacement vessel for the Queen of the North. "It is important to note that all of our earnings are invested back into our terminal and vessel construction programs," said BC Ferries' President and CEO, David L. Hahn. "Over the next five years, we will invest $200 million in our terminals and add eight new vessels at a cost of $1 billion to ensure the continued safety and reliability of our fleet." Operating expenses increased by $4.6 million for the year ended March 31, 2006, compared to the previous year. Capital expenditures for the same period totalled $136.0 million, representing a significant investment in BC Ferries' fleet, terminals and information systems. "This past year, we invested $82.1 million in vessel upgrades and modifications alone," said Hahn. << Capital expenditures included: - $36.9 million in marine structures, including $8.1 million at Tsawwassen terminal and $17.7 million of a $25.0 million project at Swartz Bay terminal; - $26.1 million of a $39.5 million mid-life upgrade to the Queen of Surrey; - $15.4 million to upgrade the Queen of Nanaimo; - $13.5 million to upgrade the Spirit of Vancouver Island; - $11.9 million of a $35.1 million upgrade to the Queen of Oak Bay; - $4.2 million to upgrade systems and increase fuel efficiency on the MV Kwuna; - $7.3 million in terminal and building upgrades; and, - $9.0 million in software development to enhance customer service, improve retail and food service management and provide operational efficiencies in crew scheduling. >> Despite the introduction of two fuel surcharges authorized by the BC Ferry Commissioner, the soaring cost of fuel remains a major concern for BC Ferries. "Over the past year, crude oil prices have continued to rise above original forecasts, resulting in an annual fuel cost of $75 million for BC Ferries this year compared to $50 million the previous year," said Hahn. As part of the second fuel surcharge ruling, the BC Ferry Commissioner may allow an additional fuel surcharge effective June 2006 if actual and forecast fuel prices remain high. "Due to the continued extraordinary cost of fuel, BC Ferries anticipates that a fuel surcharge will be authorized and implemented, based on a formula the Commissioner has developed to determine the amount of the surcharge," said Hahn. Despite the $11.2 million in fuel surcharges collected, fuel deferral account balances have increased by $14.7 million over the past year to a total of $22.7 million at March 31, 2006. The Commissioner has also given BC Ferries a fuel conservation target to reduce the actual volume of fuel consumption by one per cent per year for the next two fiscal years. "We are continuing to implement a wide variety of fuel saving measures, including installing more fuel-efficient propulsion systems on some of our vessels," said Hahn. BC Ferries' full financial statements, including notes and Management's Discussion and Analysis, are filed on SEDAR and will be available at www.sedar.com. BC Ferries, one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, carried more than 21 million passengers and 8 million vehicles during the fiscal year ended March 31, 2006. BC Ferries provides frequent year-round ferry transportation services to the West Coast of Canada on 25 routes, supported by 34 vessels and 47 terminals, and also manages other remote routes through contracts with independent operators. ...More details can be found on the actual release, through the link at the top.
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Post by Mike C on Jun 12, 2006 18:49:25 GMT -8
'bout time.
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Post by hergfest on Jun 13, 2006 23:47:30 GMT -8
What are the eight new ships he talks about? The three Coastal Class, the three new Northern Boats, and the new Intermediate are all I know about. That only makes seven.
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Post by Scott (Former Account) on Jun 14, 2006 14:20:13 GMT -8
What are the eight new ships he talks about? The three Coastal Class, the three new Northern Boats, and the new Intermediate are all I know about. That only makes seven. JAB...
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Post by Mike C on Jun 14, 2006 14:35:30 GMT -8
And what about the GII?
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Post by Ferryman on Jun 14, 2006 14:53:04 GMT -8
Garibaldi II has always been a BC Ferry....
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Post by Mike C on Jun 14, 2006 15:16:09 GMT -8
Hee, whoops, I knew that. I mean, get a route, get a paintjob, and get a life.
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Post by hergfest on Jun 14, 2006 23:26:56 GMT -8
Eight NEW vessels, not seven new vessels and one used one.
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Post by Mike C on Jun 15, 2006 14:04:21 GMT -8
If we haven't seen it, it's new to us!
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Post by Dane on Feb 10, 2007 0:33:55 GMT -8
Revenue, not profit!
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Post by Low Light Mike on Feb 27, 2007 19:10:28 GMT -8
BCFS released it's Q-3 results today, here is the link: www.bcferries.com/news/files/07-018bcferriesreleasesthirdqresults.pdfHere are the highlights....our "MD&A", which is known as "Mike's discussion & analysis": - a net loss of $1.8 million for the three months ended December 31, 2006, compared to a net loss of $0.9 million in the same quarter last year. (that's double the loss for the Quarter, folks. I guess that explains the huge decline on the DowJones today. ) - Consolidated net earnings before the extraordinary gain (QotN insurance) for the nine months ended December 31, 2006 were $7.3 million or 9.8 per cent higher than the nine months ended December 31, 2005. (since Q-3 was down, that means that BCFS had a better April-September in 2006, than in 2005. That must be because of all of our group trips........) - The insurance proceeds were used in the purchase of a replacement vessel for the Queen of the North. The vessel, which has been named the Northern Adventure, was acquired for $50.9 million Canadian and is currently undergoing significant modifications at Victoria Shipyards to meet safety requirements to operate in Canadian waters, improve customer amenities and fit BC Ferries’ berths. The total cost for the vessel, including all duties and taxes, will be approximately $103 million. BC Ferries is awaiting a decision from the federal government regarding its application for duty remission on this vessel. “We are hopeful our application for the remission of $17.1 million in duty and GST will be approved by the federal government as it represents considerable savings for British Columbians,” said Hahn. (does this answer any of our questions about costs?....probably not.. I guess that we'd like a good summary of "what" the items are that take us from 50.9 to 103 Million) - Revenues for the nine months ended December 31, 2006 increased $7.9 million or 1.7 per cent compared to the nine months ended December 31, 2005. (this is the Karl-factor....). Their SEDAR filing isn't uploaded yet, I'll check it in a few days. Their Mgmt Discussion & Analysis (MD&A) might have some interesting info.
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Post by Low Light Mike on Mar 1, 2007 19:32:55 GMT -8
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Post by yvr on Mar 1, 2007 21:13:24 GMT -8
After reading the report, there is still no information as to how the $51 million dollar Sonia ended up being the $103 million Norad.
One very important item that applies to 5 of our new ferries is the hope that Federal tax and duties will be refunded. Those taxes and duty break down as follows: The Sonia $17 million, The Super C's $112 million, The Northern Expedition $43 million. For a total of $172 million of your dollars.
If you were a private business man, you would want written guarantees that these taxes and duties were going to be refunded BEFORE you signed contracts. Who can afford to pay that kind of money on hopes and wishes!!! Did senior mgmt didn't care about this issue when they signed contracts for foreign vessels.?
I can only hope that as a B.C. taxpayer that some Fed. takes pity on us and gives our money back. What a way to operate an organization!
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Neil
Voyager
Posts: 7,151
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Post by Neil on Mar 2, 2007 9:50:44 GMT -8
Actually, yvr. there is information on the final Sonia figure, and it's been pointed out here before. The $103 million includes the search & acquisition project cost, the purchase price of the vessel, the refit in Greece, the voyage over, the refit here, import duties, and terminal modifications. That may not add up exactly to the final figure, but no doubt it's close.
"If you were a private business man".... you would have had two options with regard to import duties. Either build the ships here, and avoid them, or build them overseas expecting to pay, and hope that the feds decide to hammer yet another nail into the coffin of Canadian shipyards by waiving the duties. Are you so concerned about your tax dollars that you would rather that the ships not be bought so as to save on the import duties?
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Neil
Voyager
Posts: 7,151
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Post by Neil on Mar 4, 2007 21:53:51 GMT -8
Okay, let's try this once again.
The figures we have for the two refits, the purchase, and the duties & taxes, total $86-88 million. On top of that, you have modifications at several terminals (yes, that definitely is part of it), the delivery voyage, the acquisition project cost, and whatever other sundry expenses.
There is no gap of twenty million dollars. How clear does this have to be?
(replaces an earlier, grouchier post)
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Post by yvr on Mar 4, 2007 22:40:06 GMT -8
It appears we still need an official breakdown of the 20 - 22 million, or sundry expenses as one member calls it.
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Neil
Voyager
Posts: 7,151
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Post by Neil on Mar 4, 2007 22:57:50 GMT -8
yvr: I didn't refer to twenty million dollars as 'sundry expenses'. Disagreeing with me is fine, but I don't appreciate you deliberately misrepresenting what I said.
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Post by yvr on Mar 6, 2007 22:43:28 GMT -8
An even grouchier post - I must have missed that one! It appears that in my last post I may have left out terminals, delivery, and acquisition costs, (the quote sundry expenses) apologies on that.
Cascade points out once again that the numbers do not add up. Your creative math does not wash - especially since BCF has not released the break down of the Sonia expenses. Since you are adamant there is no discrepancy, would you please provide an itemized breakdown of the costs as you believe them to be.
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Post by Low Light Mike on Mar 6, 2007 23:01:09 GMT -8
As an moderator/enabler of this discussion, I'll weigh in with my 2cents:
The discrepancy deliberation is futile. We don't have all the information available....and likely won't (because of the BCFS quasi-private structure).
Therefore, speculation on the remaining project cost content is not a productive exercise, in my opinion. However, this type of joe-taxpayer watchdog-auditing does seem to be commonplace re Government-funded items.
Like I said, I think this discussion is futile. Fun perhaps, but there is no expectation of any sort of definitive truth at the end of it all.........
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Neil
Voyager
Posts: 7,151
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Post by Neil on Mar 7, 2007 10:40:54 GMT -8
yvr: I'm not good enough at math to be creative with it. I'm just talking simple numbers here.
I was never "adamant there was no discrepancy" in the Sonia figures. You and cascade had alleged that BC Ferries were up to shenanigans because the original purchase price for the Sonia seemed to have ballooned from $51-53 million, to $103-106 million. I was pointing out that the latter was an all-in figure, inclusive of every cost in bringing the Sonia here, from the beginning of the replacement project immediately following the 'North's sinking, to the start of revenue service. I said that when you added up the purchase price to the work in Greece ($9 million), the refit here (9 million), the duties and taxes ($17 million), you totalled $86-88 million dollars. That's not 'creative math'. Those are the figures we know so far. Then we have modifications at, I believe, four terminals, which no doubt runs into multiples of millions, along with the considerable expense of sending over a crew and bringing the ship from Greece to Victoria. FlugelHorn's point is valid- we don't have the totals for those terminals, nor do we have the totals for the entire purchase project, or the delivery, or, as I said, any other costs which may have been incurred, but, when taken all together, it's impossible to believe that there is anywhere near the shortfall you and cascade talk about, if indeed there is any shortfall at all. I don't pretend to know the exact numbers.
As FlugelHorn says, this discussion is somewhat futile, since we don't have all the facts. My point is, that not having all the facts is not a reason to yell "scandal", unless one simply is regularly inclined to do so. Yes, I'd like a full accounting of what the hundred million plus comprised, and I expect eventually, the accounts will show us.
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Post by Low Light Mike on Jun 7, 2007 15:30:08 GMT -8
BCFS's annual financial statements were released today. The link is on the BCFS website, under "news releases".
Hopefully by tomorrow (June 7th) the SEDAR reporting will be uploaded, and we can view the MD&A (Management's Discussion & Analysis), which should give us folks something to discuss.
Until then, we just have the 1 page news release and the core financial statements, which show large dollars and a large profit.
Remember that the large profit is needed for paying down long term debt and for funding capital expenditures....as well as to give comfort to the bond rating agencies. "Profit" is an amount that is BEFORE principal-repayments of debt, and BEFORE any capital expenditures....so profit is very necessary under this structure...otherwise you can't pay your debt and you can't do any capital expenditures.
So don't get bent out of shape about a large profit....because that's more a result of the legal structure and of course the result of the "Act". ie. Don't scoff at the profit, but instead direct your hissing at the Coastal Ferries Act...from which all of this necessitates.
If you really want to get upset about a number in their financial Statements, then get upset about the revenue line called "Ferry Service Fees", which is virtually unchanged from 2005/06 to 2006/07. This is the Province's subsidy to BCFS, and it's lack of increase is the reason for the rider-fare increases that we're paying...some routes more than others...
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Post by kylefossett on Jun 8, 2007 14:56:45 GMT -8
so if BC Ferries is a seperate from government private corporation then the Ferry Service Fees should not then be seeing an increase. if they are seperate from the gov't then there are no subsidy and there are fare increases
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Post by Low Light Mike on Jun 9, 2007 9:39:21 GMT -8
Here is the MD&A for the year-end financial statements: www.sedar.com/CheckCode.do;jsessionid=0000caS-xeKEu_C01fyjwV6mjec:-1It's too big to simply cut/past onto this thread in its entirety, so I've posted excerpts in bits & pieces. Keep in mind that this might just seem like more spin to you, but as their official annual report MD&A, this is the most official type of spin that you can get (other than what they say to TSB investigators). So this stuff is important, as this is their official record, and you know that lots of internal lawyers and advisors looked this over, before it was released this week. This MD&A document is maybe the closest thing that we (the taxpayers) get re "Accountability" from the new BCFS structure....so I'd encourage you to read it. (This is not a flippant news release, this is their official annual document.)I've enjoyed doing the cut/past that follows, as it allows me to read and digest the items, as I do the post-paste-edits. (yes, it doesn't past very nicely from PDF, so there are lots of hard-returns to remove). I hope that these excerpts give you something to think about and to discuss. (Just from reading the items excerpted below, I can see things that are of interest to members such as T-Terminal, Cascade, YVR, Hornbyguy, etc......ie. the issues that you've posted about are somewhat addressed in this document.)
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Post by Low Light Mike on Jun 9, 2007 9:54:58 GMT -8
(opening preamble) ---------------------------------- Management’s Discussion & Analysis of Financial Condition and Results of Operations For the fiscal year ended March 31, 2007
Dated May 16, 2007
The following is our discussion and analysis of the financial condition and results of operations for British Columbia Ferry Services Inc. as of May 16, 2007. This should be read in conjunction with our audited consolidated financial statements and related notes for the years ended March 31, 2007 (fiscal 2007) and March 31, 2006 (fiscal 2006). This management’s discussion and analysis has been prepared based on information available at May 16, 2007, except where otherwise indicated. ==============================
(page 1) ---------------------- Significant events during or subsequent to fiscal 2007:
New Vessels (See “Investing in our Capital Assets” below for more detail)
• In April 2007, the first of three Super C-class vessels, the Coastal Renaissance, was launched. Construction of the Coastal Inspiration commenced in November 2006 while construction of the Coastal Celebration began in April 2007. These vessels will be the largest double-ended ferries in the world, with each vessel measuring 160-metres in length and having a capacity of 1,650 passengers and 370 vehicles. These new ships will replace aging vessels which currently provide service on our major routes. The Coastal Renaissance is expected to be in service in early 2008 while delivery of the other two Super C-class vessels is expected in early and mid 2008, respectively. The total project budget for the three vessels is $542 million.
• In March 2007 a new addition to our fleet, the Kuper, went into service on our smaller island routes. The total cost of this 32-vehicle ferry was $12 million.
• In March 2007, the Northern Adventure went into service on our northern routes. This vessel, measuring 117-metres in length, has 74 state rooms and will accommodate over 600 passengers and 101 vehicles. The total project budget for the acquisition and modification of the Northern Adventure is $102 million.
• In December 2006, the keel was laid for a new intermediate class ferry. This new vessel will allow for the retirement of the 47-year-old Queen of Tsawwassen. Once complete, the vessel will measure 100-metres in length and have a capacity of 600 passengers and 125 vehicles. The total project budget for this new vessel is $57 million. The vessel is expected to be in service by the summer of 2008.
• In August 2006, we signed a $133 million contract with Flensburger Schiffbau-Gesellschaft (“FSG”) of Germany to build the Northern Expedition to replace the 41-year-old Queen of Prince Rupert, operating on our northern routes. This 150-metre vessel, which is expected to be in service in the spring of 2009, will have 55 staterooms and will accommodate 130 vehicles and 600 passengers. The total project budget for this vessel is $200 million.
Other items: • In March 2007 and after more than three years of negotiation, mediation and finally, arbitration, a new collective agreement with our employees was finalized and the term extended. The final award included a $1,000 lump sum payment to employees and wage increases for the next three years, and provides a basis for enhanced operational flexibility. See “Expenses – Year to Year Comparison of Expenses 2007-2006” below for more detail.
• In March 2007, the Commissioner released the preliminary price caps for the second performance term. In his preliminary decision, the Commissioner indicated that the price cap increase on April 1, 2008 will be 5.4% on the major routes and 3.6% on the other routes. See “Corporate Structure – Coastal Ferry Services Contract” for more detail.
• In March 2007, we closed a $250 million senior secured bond issue by private placement. The net proceeds will be used primarily to repay our credit facility, to fund capital expenditures and for general corporate purposes. See “Long-Term Debt” below for more detail.
• In March 2007, a fiscal 2007 ferry service fee reduction of $0.9 million was negotiated with the Province relating to the summer replacement service on our northern routes following the loss of the Queen of the North. In addition, the Province committed to a one-time $7.0 million additional service fee to be applied to fuel cost deferral accounts as at March 31, 2007.
• In January 2007, we received the final report from the independent review of our safety policies, procedures and practices. The report makes 41 recommendations on safety enhancements which we are implementing. See “Risk Management” below for more detail.
• In March 2006, the Queen of the North, operating on its regular route from Prince Rupert to Port Hardy, ran aground on Gil Island in Wright Sound and subsequently sank in 425 metres of water. Our divisional inquiry, released March 26, 2007, concluded that human factors were the primary cause of the incident but noted that the activities on the bridge during the last fourteen minutes before the grounding were unknown. Subsequently, additional information has been obtained and our divisional inquiry has been reconvened. The Transportation Safety Board and the RCMP investigations are ongoing. See “Northern Service” below for further detail. ===========================
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Post by Low Light Mike on Jun 9, 2007 10:05:53 GMT -8
(more excerpts)
(page 2-3) ---------------------------- CORPORATE STRUCTURE - Coastal Ferry Services Contract
We operate ferry services under a regulatory regime as defined by the Coastal Ferry Act, and under the terms set out in the Coastal Ferry Services Contract. This 60-year services contract with the Province, which commenced April 1, 2003, stipulates the number of round trips that must be provided for each regulated ferry service route in exchange for specified fees. In anticipation of the deployment of new vessels on our northern routes, higher ferry service fees have been negotiated with the Province for fiscal 2008, the final year of the first performance term of the contract. See “Northern Service” below for further detail. The Coastal Ferry Services Contract also includes fees for the provision of specific social program services delivered on behalf of the Province.
In March 2007, the Commissioner released the preliminary price caps for the second performance term covering fiscal 2009 through fiscal 2012. In his preliminary decision, the Commissioner indicated that the price cap increases on April 1, 2008, will be 5.4% on the major routes and 3.6% on the other routes. Subsequent annual changes in the price caps will depend on inflation. On each April 1 for the subsequent three years, the increase would be 2.0% plus CPI times .5 on the major routes and 5.2% plus CPI times .73 on all other designated routes. We are currently in negotiations with the Province on revisions to the Coastal Ferry Services Contract for the second performance term. The results of these negotiations will be provided to the Commissioner by June 30, 2007. The Commissioner will then provide the final decision on price caps for the second performance term by September 30, 2007.
Under the terms of the Coastal Ferry Services Contract, we also receive an annual amount from the Province based on its agreement with the Government of Canada to fulfill the obligation of providing ferry services to coastal British Columbia. The amount of this payment is adjusted annually based on the Vancouver Consumer Price Index.
============================== (pages 4-5) --------------------- Northern Service
On March 22, 2006 the Queen of the North, operating on its regular route from Prince Rupert to Port Hardy, ran aground on Gil Island in Wright Sound and subsequently sank. Two passengers remain unaccounted for and are presumed to have perished.
An emergency environmental plan was implemented in conjunction with external authorities, including members of the Regional Environmental Emergency Team (“REET”). Burrard Clean Operations, under contract to us, led the containment activities at the incident site using 1,800 metres of barrier boom to protect sensitive areas. We have been monitoring the incident site for leakage of oil and, in consultation with REET, completed an extensive monitoring program. This has determined that the level of contaminants is very low in edible organisms, including shellfish, in the area of the wreck and that there is no risk for human consumption. In conjunction with our commercial insurer, we have investigated the feasibility and risk of recovering any fuel and lubricants that may remain in the vessel. We have provided the results of these investigations, along with various environmental studies, to the Canadian Coast Guard (“CCG”), which has engaged additional experts to extend its analysis of the issues. The CCG conclusions are that a significant amount of the fuel and lubricants were released following the incident, that a recovery operation would be exploratory at best, and it is probable that there is no recoverable fuel remaining on the vessel. As a result, we have determined not to pursue fuel and lubricant recovery from the incident site. We will continue to monitor the site for leakage of oil.
The Transportation Safety Board, as the lead investigation agency, along with Transport Canada and the RCMP, are conducting independent investigations related to the sinking. Our divisional inquiry, released March 26, 2007, concluded that human factors were the primary cause of the incident but noted that the activities on the bridge during the last fourteen minutes before the grounding were unknown. The divisional inquiry report also made 31 recommendations on equipment, bridge team, and emergency and evacuation procedures. Some of these recommendations have already been implemented and the remainder are in progress. Subsequently, additional information has been obtained and our divisional inquiry has been reconvened. The Transportation Safety Board and the RCMP investigations are ongoing.
A tug and barge service, as well as air service, was used as an interim measure to ensure that supplies reached the Queen Charlotte Islands and passengers requiring passage were accommodated. For the busy summer period, we augmented service provided by the Queen of Prince Rupert with additional tug and barge and air service.
We maintain commercial insurance coverage for incidents of this nature. Insurance proceeds, net of deductible, of $67.9 million were received in May 2006 in settlement of the claim under the hull and machinery policy. In accordance with generally accepted accounting principles, $6.6 million of the insurance proceeds were recorded as a receivable to offset insurable losses in fiscal 2006. We reported an extraordinary gain of $61.3 million for this event in the first quarter of fiscal 2007. These funds are being utilized to partially fund the acquisition of the Northern Adventure. Claims for personal belongings of passengers and passenger automobiles are substantially complete. Other types of claims are still in progress. We expect that substantially all passenger claims, claims from other parties and costs incurred for environmental containment or cleanup will be paid by our liability insurer.
Our hull and machinery insurance policies were subsequently renewed with an increase in annual premium costs of approximately $1.5 million. This was more than offset this year by $3.2 million of interest income earned and avoided interest costs on invested insurance proceeds. We have recorded a liability at March 31, 2007 to reflect the requirement to repay the Province $0.9 million representing the negotiated reduction in ferry service fees regarding the lower level of summer replacement service we provided.
In March 2007, the Northern Adventure, a replacement for the Queen of the North, went into service on our northern routes. The two-year-old vessel was purchased in October 2006 and underwent significant modifications to update safety and security equipment, modify the stern to be compatible with our existing berths, upgrade electrical, heating and lighting systems and upgrade customer amenities. This 117-metre vessel has 74 state rooms and will accommodate over 600 passengers and 101 vehicles. See “Investing in our Capital Assets” below for more detail.
In August 2006, we signed a $133 million contract with FSG to build the Northern Expedition to replace the 41-year-old Queen of Prince Rupert, operating on our northern routes. This 150-metre vessel, which is expected to be in service in the spring of 2009, will have 55 staterooms and will accommodate 130 vehicles and 600 passengers. See “Investing in our Capital Assets” below for more detail.
Negotiations with the Province have concluded, resulting in increases to future service fees to support the deployment of these two vessels on the northern routes. Service fees will increase by approximately $13 million commencing in fiscal 2008, with a further increase of approximately $22 million annually upon the entry into service of the Northern Expedition.
We anticipate a third replacement vessel for the northern service will be acquired and commence operating during our next performance term. Negotiations with the Provincial government for increased service fees with respect to this vessel are ongoing.
====================
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