05 November 2011

Marine Atlantic reviewing sale of ferries:

The MV Caribou and MV Joseph and Clara Smallwood are shown in this file photo
Criticism over the sale and disposal of the MV Caribou and MV Joseph and Clara Smallwood has prompted Marine Atlantic to review whether the terms of sale have been breached.

“Our lawyers are in the process of obtaining additional input with respect to the final disposal of the vessels,” said Walter Pelley, a member of Marine Atlantic’s board of directors. “Until we receive additional information as it relates to the contract, there is very little that we can add to what has already been reported.”

Pelley said that from the board’s perspective, the process of sale was very thorough.

The two boats are in Alang, India, where they are being scrapped.

Alang has a reputation for practices that are environmentally unsound because shipbreaking is done on the beach instead of in a dry dock where spills can be contained.

The 2004 National Film Board film “Shipbreakers” documented the living conditions of the workers.

According to information provided to the Cape Breton Post by Marine Atlantic late Wednesday, a number of items were evaluated when reviewing each of the bids, including experience, global network access, fees and commission and approach to marketing the vessels.

Despite the request for bids being posted and distributed through MERX, a Canadian electronic tendering service, the document indicated no bids were received from Canadian companies.

The document stated Marine Atlantic has no control over the eventual disposition of the vessels by any buyer and it was aware both vessels would likely be recycled due to poor shipping markets and the age of the vessels.

The document also stated that while there were no requirements on what the new owners could do with the vessels, they did agree that any recycling activities would occur in a yard with green recycling facilities. If the new owners recycled the vessels in a non-environmentally friendly manner, it would constitute a breach of the terms of sale and Marine Atlantic will consider its options up to and including legal action.

The MV Caribou was sold for $3.875 million and the MV Joseph and Clara Smallwood was sold for $3.8 million.

Comments from Wayne Elliott, founder and director of business development for Marine Recycling Corp, of Port Colborne, Ont., sparked controversy over the sale in the House of Commons on Wednesday. Elliott suggested his company would have provided a local solution to the recycling of the ships.

In an interview with the Cape Breton Post, Elliott said his company emailed an informal proposal to Marine Atlantic to recycle the ferries locally at Sydport, but never submitted a formal bid.

“I understand that they sold the ships for a lot more than our proposal, but they did leave many hundreds of thousands of dollars of fuel and lubricating oils aboard those ships,” Elliott said. “What the enterprise was worth to the local economy to recycle those two ships was $7 million, just a little more than Marine Atlantic got for the pair.”

Elliott said he couldn’t understand why a foreign broker handled the sale.

“It’s a disappointment for Canada, and certainly for the people of Cape Breton,” he said. “After serving on these ships, why shouldn’t the get a chance to recycle them and have the jobs and the local economy benefit?”

Elliott’s comments sparked Sydney-Victoria MP Mark Eyking to question Transport Minister Denis Lebel during question period Wednesday about the decision to sell the two Marine Atlantic ferries to the company in India.

“We have found out that Marine Atlantic has sold two ferries to a company in India when there was a Canadian company who bid on the job to dismantle these ships in Cape Breton,” Eyking said. “Not only have we lost 50 good-paying trade jobs, this would have been a great economic boost for our local industry. Why is this prime minister letting yet another minister bleed jobs out of Atlantic Canada?”

When contacted late Wednesday about the fact that no Canadian companies submitted a formal bid, Eyking said Marine Atlantic should have done everything within its power to keep the work of dismantling the vessels in Cape Breton.

“Marine Atlantic should have allowed for more time. The payback would have been better for the Canadian taxpayer by looking for local companies to do the work.”

Source: Cape Breton Post. By Julie Collins (jcollins@cbpost.com). 2 November 2011

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