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Post by cascade on Sept 15, 2005 7:50:10 GMT -8
I wonder what has happen to the proposed order, after the short list of the 3 shipyards in February 2005. BCFS - claimed that an announcement would be made in August 2005 on which yard got the order. I think we are now in September 2005 - has anyone heard anything??
Why are BCFS delaying the news ?
Who is helping them - what consulting firm ?
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Post by YZFNick on Sept 15, 2005 8:07:31 GMT -8
Probably something like the Oak Bay came up when it slammed into a year's worth of insurance claim processing.
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Post by cascade on Sept 15, 2005 8:40:05 GMT -8
Nick,
Well that "ONLY" cost $3M according to BCFS. I wonder as the deal for the Super C's had a finance element from the shipyard - which has a major shareholder - been a German Bank - that BC Ferries are hoping something like that can be done for these vessels.
I also wonder - as they messed up on the fuel surcharge - and the prices has gone up faster and further than a lot of people thought it would that they have delayed the announcement due really to funding - finance ? (They are using this funding to pay for the fuel increase)
Also maybe the design - spec is wrong. High fuel prices are here to stay with us for a while. BCFS have got the spec totally wrong in the past about engine size / speeds and fuel consumption.
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Post by Scott on Sept 15, 2005 17:44:16 GMT -8
Last week in the newspaper there was a story about this. The decision will be announced in the next 3-5 weeks.
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Post by Curtis on Sept 15, 2005 17:47:42 GMT -8
Well they better use a local shipyard in Van or Vic if they use Poland it's gonna take longer
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Post by Low Light Mike on Sept 15, 2005 17:51:58 GMT -8
Apart from tranporting the finished-ferry from Poland to BC, why would construction take longer in Poland than in BC ?
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Post by cascade on Sept 16, 2005 6:12:53 GMT -8
These contracts are for "fixed" price & Delivery. I think the Polish yard will be the cheapest and as for the finished product, probably the better product. They have a good history of on time delivery.
Therefore I go back to the other question why hasn't the order been given? They have had since February 2005 to review the three bids. They appear to me to be time wasting for what reason ? lack of finance ? change of spec - design / fuel concerns??
I don't think WMG really want to have the order - why - because they have just raised $680M for the final payment on the 13 container ships - and they need space to turn these vessel around - so if they lose the order - then they have a reason to layoff workers - change the yard into a container port - and hire on a new - (Younger) work force. Makes business sense - but not something I would do....they do have a past history of doing this - WMG - look to LA and see what they did there.
John - what was the reason given in the newspaper article ? for the delay in announcing the winner of the tender/bid?
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Post by Scott on Sept 16, 2005 22:51:34 GMT -8
How about the next general meeting since the election? But that's just a guess. I heard an explanation for the delay on the radio a few months ago, but now I forget so I'm going to have to rack my brain for the answer. I know part of the reason is that the "decision makers" only get together a few times a year and they've got to wait until one of these meetings to choose. The bids were in before the election, but for some reason they put off the decision till after the election, and I think they've even put it off further since then.
The politicians and BC Ferries have been using this Intermediate vessel to deflect the criticism that came up when they decided to build the super C's in Germany. They were saying how local yards would be better equiped to build a smaller vessel, almost making it sound like it probably would be built in here. So if this one goes off-shore as well, ... I'm sure there will be some mad people.
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Post by cascade on Sept 17, 2005 8:19:43 GMT -8
John,
That's interesting - as the Main Board meet every month and of course they have signed off the accounts - and even issued the complete set on 8th September 2005.
As for the delay - if the order was going "overseas" - then that speaks for the delay - were as if the order was staying in BC - and based on the fact that the short list - was published in Feb 2005 - well before the General Election - You would therefore think good news would follow it. So my money seems to be directed toward the Polish Yard - BUT I think they (BCFS) have changed / adjusted the spec - due to the fuel situations
Not just the high cost of the fuel - currently - as the need to adjust the spec to allow a more efficient hull design - tank testing ect.... but that the high cost of the fuel after they dropped the hedge program means that cash flow wise - BCFS are running a little tight - and the summer is the busiest time - (Good on cash flow) plus remember they are not going to get anywhere near the same terms as per the Super C's - in financing deal - so they need to put more cash down.
The account show they have $450M in Bonds - plus they have also got a $150M credit line - like an overdraft account at your local Bank - helps out the capital investment program - Business run on a Overdraft account - and loans. I think from the 2004/2005 account - they have the facilities in order ready for the delivery of the first vessel in December 2007 - but in the mean time they need to finance the increase in fuel cost - which has really hit them.
Of course that is just my view...as for the delay...meetings ---well that could also be a reason - but some how ..I can't buy into that reason....as they messed up big time on the fuel hedge program - bad management..
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Post by Dane on Sept 17, 2005 22:18:03 GMT -8
Ill be at the AGM, perhaps I'll have a chance to ask. But I also anticipate having to leave early.
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Post by cascade on Sept 19, 2005 6:01:19 GMT -8
Dane - to ask your question - fill in the card and they give you a number.
Nothing been heard or even talked about over here on the Baltic Exchange - as we hear about most orders of any size. If I was a betting man - which I am not - then I would place a small wager on the Polish Yard.
I also really wonder what WMG is up to. You don't go to the Market - New York and raise $680M - for your container fleet - but have no where to service the cargo. It is very well known that on the Pacific Coast - Seattle - Tacoma and Vancouver are to become the 3 biggest container ports on the West Coast of America. They will take over from LA
The real problem with WMG is that they are very private company - and therefore don't have to publish any info - accounts - like BC Ferries. They also pay tax on there so called Canadian profit - where BC Ferries - is tax exempt. Big bonus for them.
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Post by Scott on Sept 19, 2005 8:42:34 GMT -8
Would they have investments in container shipping in Prince Rupert? That place is getting a huge container expansion as well.
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Post by cascade on Sept 19, 2005 9:32:46 GMT -8
John,
Out of the $680M they raised in New York via there IPO - they stated that it was to pay for 13 vessels under contract - to be built. Now 10 of these will be of the type - that are huge - massive. They are the biggest container vessels afloat - so I don't think that Prince Rupert will be able to handle them. They do have a range of medium sized and smaller ones - which could service Prince Rupert. One of the major problems which we have in Europe now - is a one way traffic of containers - lots of ports here are full of empty containers - waiting a order to go back into the system either to China or India.
So what comes out of Prince Rupert that can be shipped in a container ?
I think we are still to see what and where WMG play there hand. I think more is to be done - heard from them for the Island - (Bigger population) more products are used on the Island and also products send off the island.
You noticed in the past when the order went overseas for the Super C's - why didn't WMG make more of a scene about it - losing the contract. In part of there proposal - you noticed that the Hulls where to be built in China - (Taking the place of 3 large container ships) then moved to the coast and finished off in there yards.
I think they WMG are looking at the larger picture - and yes they make a good return / good cash flow on the repair - midlife refits ect... but they have a aging workforce - which is costing them money in time off... so lose the next contracts - blame the government - let the unions be your mouth piece - close the yard - and turn it over to a Container Port - hire back the younger staff you need. A few problems are now solved.
My reason for this view is that they have done it in the past. Look back at there history and you can see - they "follow the money". Seaspan as a tug operation makes a lot of cash. The shipyards - have very good years - but in the bad years they cost a Lot to run.... They have only just got into the container business - and done some smart tie up's with the Chinese. The young Washington Kid is smart...he thinks...also they stay well out of polictics....VERY SMART....
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Post by Dane on Sept 19, 2005 11:13:08 GMT -8
I am assuming they will get grilled on capacity issues, including the new intermiediate ship. I say this b/c BCFS was a running gong show this summer, and got hammered in the media for the long waits, break downs etc... (Even though BCFS attributes it to an old fleet we all know it wasn't the old ferries that broke down  ) |
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Post by Scott on Sept 19, 2005 12:06:59 GMT -8
Cascade, your theory may be correct, but I think you might be underestimating Prince Rupert capacity and importance. The plans are to create a massive container expansion that will make it almost as large as Vancouver is now, and capable of unloading the largest container ships in the world. The port itself is large enough.. it's the deepest one in B.C. It's benefits are that it is 1-3 days closer to Asia in terms of shipping time, and it has rail lines which can connect it to the rest of the continent. It's easier to ship from the Prairies to Prince Rupert than it is to ship through Vancouver and also the oil and minerals in northern BC and Alberta. They have some pretty grand plans for Prince Rupert (they always have)... maybe this time it will happen: www.rupertport.com/pdf/media/VanSun_July2604.pdf |
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Post by cascade on Sept 20, 2005 8:56:48 GMT -8
John,
I think in theory you are correct - but why build a port there to handle containers - when 65% of the population in BC lives in the Southern half - not the Northern half.
What would they bring there - which will warrant such an expense on Port design and infrastructure to handle these massive container ships?
How if we go ahead with the concept - idea of an offshore oil business - then we are starting to make sense. Most goods (Consumer goods) are shipped by container and I just can't see than many consumers living in and around the Prince Rupert area. I agree they can then travel North or East into Alberta - also it is a straight line to the Northern Oil tar sand fields in Alberta - so maybe..
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Post by cascade on Sept 20, 2005 9:04:05 GMT -8
The Vancouver Sun report is from 2004 - but I still have my doubts. In theory a lot of it makes sense - deep nature harbor - possible rail links and easier access - time wise from China - but it then adds to the delivery time once landed - before it is used by the consumer.
So you land in Prince Rupert - load the container onto rail - send to say Calgary - then unload - to truck then on to a warehouse for that retail outlet. Lot's of handling - which incurs costs.
What is the time from Vancouver to say Calgary - same way ?
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Post by YZFNick on Sept 20, 2005 9:10:50 GMT -8
I think Prince Rupert is better situated to send goods to the mid east of the continent. If you take the rail time from Prince Rupert to Chicago compared to Vancouver, Seattle, or LA to Chicago, the extra time would not be that much compared to the saved shipping time. I'm sure it's cheaper to do business in Prince Rupert in terms of facility fees, property values, labour, taxes among other things.
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Post by cascade on Sept 20, 2005 9:25:38 GMT -8
Nick,
You are most likely correct - as it is a Northern Town - so wages will be cheaper.
Has the BC Government put in the rail upgrades which will link it up to the mid-west ? Didn't they sell BC Rail - which includes the tracks or not?
A deep nature port is the best starting place - plus Vancouver is very densely populated - so it would cost a lot more in handling the containers - land cost ect...
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Post by YZFNick on Sept 20, 2005 11:05:11 GMT -8
I believe Prince Rupert is on the CN line, so any maintenance would be done by them. The CN line goes through the north through Edmonton and Saskatoon to Wpg.
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Doug
Voyager 
Lurking within...the car deck.
Posts: 2,213
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Post by Doug on Sept 20, 2005 16:04:28 GMT -8
They already have a coal port at Prince Rupert, but expanding to containers would be a good idea. Since Prince Rupert is on a seperate island than the port, no one could complain.
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Post by cascade on Oct 4, 2005 12:05:15 GMT -8
Doug,
How fast can they be up to speed - as WMG container ships will be out of dock in about 15 to 20 months.
Will they have Prince Rupert sorted out by then?
What are the big issues that need to be worked on.
1. Rail links
2. Port handling?
3. Labour - staffing level - skilled or unskilled?
4. Political acceptance of container Port?
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Post by YZFNick on Oct 4, 2005 12:47:56 GMT -8
There might be a bit of a labour shortage at first, but if the draw people in from other places up there like Terrace and Kitimat, then they should do all right.
I don't see a problem in the other issues you brought up. It seems the port is ready for growth and it's only a matter of time before they become a major international port.
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Post by Alex on Oct 4, 2005 15:24:51 GMT -8
Doug, How fast can they be up to speed - as WMG container ships will be out of dock in about 15 to 20 months. Will they have Prince Rupert sorted out by then? What are the big issues that need to be worked on. 1. Rail links 2. Port handling? 3. Labour - staffing level - skilled or unskilled? 4. Political acceptance of container Port? The rail lines are pretty in place. I think the main issue is just the actual construction and expansion of the docks, really. |
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Post by cascade on Oct 5, 2005 8:11:08 GMT -8
So the docks could be a problem ? That will take time & money to sort out. Shipping just doesn't wait around for anyone.
What sort of docks do they need to build - expand? What about the land to handle - store the containers? Is there enough around the terminals?
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