Note from the web editor:
Why we are running this Upfront again? Well, because it recently sparked an email debate that speaks clearly to the murkiness surrounding this issue. After reading this article, Dave McCusker, Manager of Strategic Transportation Planning at Halifax Regional Municipality, sent our news editor, Tim Bousquet, a letter. Tim passed it on to Bruce, who started an email exchange with Dave. So, please reread the editorial and the emails and contribute to the debate yourself. — Andy Murdoch
Mayor Peter Kelly was in full rhetorical flight recently when he depicted Halifax Harbour as a hassle-free highway. “It’s what joins us, not what separates us,” he declared. “You don’t have to plow it, you don’t have to salt it, you don’t have to maintain it.” Kelly’s uncharacteristic eloquence was inspired by the proposed 250-seat fast ferries that he hopes will someday churn through the seven miles of seawater between Mill Cove in Bedford and the downtown Halifax ferry terminal. The mayor is an enthusiastic supporter of the $27 million HarbourLink project. But some of his municipal colleagues are a lot less gung ho. “This is just getting more bizarre by the moment,” says Halifax councillor Sue Uteck. “All of a sudden this ferry just came out of the blue again. It moved up the priority list like greased lightning.”
Uteck is angry about a closed-door meeting last month where, she says, councillors were pressured to make the fast ferry a key part of HRM’s five-year transit plan. She and Dartmouth councillor Andrew Younger say the project should be put off until yawning gaps in bus service are closed first. “As much as staff say they’re going to do things like the free Burnside shuttle or Bayer’s Lake shuttle,” Younger says for example, “there’s no guarantee that’s not in the motion approved by council.” David McCusker, HRM’s manager of traffic and transportation services, insists that the transit gaps will be closed by the end of the five-year plan and that the money is there for the Bedford ferry, too. He points out that bus services can’t be extended until the new $25 million transit garage opens in Halifax. “Other than express transit service to Tantallon, there won’t be any new services added to our transit system until 2010, when the Halifax garage is open,” he says. “That’s what’s dictating the timing of any of these transit services that council is looking for.”
McCusker is hoping the fast ferries will be roaring between Bedford and Halifax as early as 2011. But that seems unlikely even with mayor Kelly’s fervent cheerleading. The project is based on a three-year-old consultants’ report that recommends a one-way fare of $5. A telephone survey found only a tiny fraction of Bedford’s population would be willing to pay that much. McCusker is hoping for a lower fare, but he can’t say yet how much lower it might be.
“To be blunt about it, I think it’s ill-conceived, the whole idea,” says Tony Thompson, president of E.Y.E. Marine Consultants, the Dartmouth company which designed the Halifax, Dartmouth and Woodside ferries. Thompson predicts that ridership would not be high enough to sustain the costs of the fast ferries, which would burn more than 700 litres of diesel fuel during each hour of peak operations. “We’re going to move 250 people during three trips in the morning and three in the afternoon,” he says “and the other times will be really expensive to be operating because the boats will be running practically empty.”
“It’s like buying a Hummer to pick up milk at the grocery store,” says Laurie McGowan, who operates a marine design company near Annapolis Royal. “These guys don’t realize how much fuel these boats use. They’re pigs.” McGowan says HRM staff should be looking at smaller boats and more efficient designs, not just a 29- to 38-metre catamaran with four big engines. He also warns that boat construction costs can easily balloon out of control as they did in British Columbia. Three massive fast car ferries, estimated at $210 million in the 1990s, ended up costing $463 million. The huge cost overruns helped bring down the province’s NDP government. To be fair, the Bedford project is much smaller, but it’s hard to disagree with Tony Thompson when he says, “I hope a lot of people are questioning this and the councillors, too, before they spend our money.”
Ferry your mass-transit suggestions over to brucew@thecoast.ca.
This article appears in May 15-21, 2008.
May 18, 2008, Dave McCusker to Bruce Wark: As guardian of public spending and protector of the environment, I’m astonished that the Coast would take such a cynical view to the Bedford High Speed Ferry project. Your first inaccuracy is to state that a consultant report recommends a five dollar fare but a telephone survey suggests that Bedford residents’ desire to take the ferry diminishes with a fare that high. The fact is that the same consultant conducted the telephone survey you reference, and found that because demand for the ferry was so high, a five dollar fare was necessary to keep demand to a level that could be accommodated by the ferry. The ferry still works fine at a three dollar fare, but any ice cream stand operator will tell you that if the lineup at your stand is so long that you can’t serve everyone, you’re not charging enough for you ice cream. Its not surprising that the local builders and designers who specialize in smaller boats will tell you that the boats recommended for the Bedford service are too small. As a counter to your analogy of driving a Hummer to the corner store, I would suggest that using several small boats to carry passengers in a high volume market is akin to the Mooseheads buying thirty SmartCars and thirty drivers to take their team on road trips instead of one driver and a highway coach. You end the editorial by suggesting that questions need to be asked before taxpayer money is spent. If you had read further in the consultant report you pick pieces out of, you would have discovered that the report projects that the ferry can produce sufficient revenue to recover all of its operating costs, retire its full capital cost, and generate a profit of $1.4 million a year. With the remainder of our transit system we write off our capital costs, and recover about two-thirds of our operating costs from fares. A project that takes significant volumes of car traffic off the streets and pays for itself. You should be questioning why this project has taken this long to get started. Dave McCusker, P.Eng.Manager, Strategic Transportation PlanningHalifax Regional Municipality
May 20, 2008, Bruce Wark to Dave McCusker:My editor forwarded your e-mail to me. Thanks for sending it and once again, thanks for your extensive help. I appreciate all the time you took to explain the ferry project to me.Obviously, it’s not possible to say everything in a 650 word editorial. The purpose of research is to help the editorial writer judge the relative merits of the various arguments he hears. After conducting my research, I feel fully justified in endorsing Tony Thompson’s conclusion that at the very least, this project needs much more questioning before we commit money to it.I began by looking at the consultants’ report. To be honest, I was a bit shocked that all of your plans seem to be based on this three-year-old report which, in some respects at least, seems limited if not flawed. For example, you explained that the consultants assessed the project as one that would generate a profit without the need for public subsidies. Yet surely the consultants knew that HRM subsidizes its transit services. A more realistic assessment would have taken that into account.I mention this because the three case studies the consultants use are all privately-owned operations. As you know, the one in Seattle is now out of business. The one in New York was sold after the operator sought bankruptcy protection and the two ferries in San Francisco charge one-way fares on their six and 11 mile runs that are now above seven dollars and are rising to $7.45 on July 1st. Case studies such as this hardly inspire confidence in the consultants’ findings. Yet, you say in effect, that it doesn’t matter what has happened to these privately-owned ferry operations because the fast ferry here does not have to make a profit and they do. Just to be clear: The consultants started out assessing a Bedford to Halifax fast ferry that they concluded could make a profit without public subsidies – and at a fare of $5. Yet with hindsight the case studies they used raise doubts about the basis for the consultants’ judgment regarding financial feasibility.I also wondered why the consultants recommended a ferry speed of 35 knots when it does not appear to be possible to get regulatory approval for that speed. Did they not check this out? You say the ferry will run somewhere around 25-30 knots – not really a “fast” ferry to my way of thinking. At the lower speed, the consultants’ figures regarding the time of the journey and the frequency of turn-around would have to be modified.You write: “Your first inaccuracy is to state that a consultant report recommends a five dollar fare but a telephone survey suggests that Bedford residents’ desire to take the ferry diminishes with a fare that high. The fact is that the same consultant conducted the telephone survey you reference, and found that because demand for the ferry was so high, a five dollar fare was necessary to keep demand to a level that could be accommodated by the ferry.”You are right of course that the consultants commissioned the telephone survey. This single survey was conducted nearly four years ago in June and July based on the results of three previous community focus groups. The pollsters questioned 774 people from Bedford and surrounding areas. And that apparently is all anyone has to go on. A single telephone survey conducted four years ago. Incredible.Poll results are most reliable when they are based on a series of surveys, not just one. I should have written that HRM has no idea what ridership might be because everything you and the consultants know is based on a single, ancient survey – and one with a fairly small sample size at that. But even if that survey is right, it shows a huge drop-off in ridership after the fare goes beyond $2.00. Oh yes, the consultants concluded, based on their survey, that a fare of $5 was necessary to keep too many passengers from taking the ferry at peak times. But as you know, they based their calculations on a 350-seat ferry and you’re planning one with only 250 seats and a fare somewhat lower than $5. How much lower? Well, no one really knows yet. In this respect, the consultants’ report, as flawed as it is, goes out the window and we seem to be heading for a smaller ferry at a lower fare. This does not seem like a well thought-out business plan to me. It seems more like guesswork. Councillor Uteck told me during our interview that she has yet to see a persuasive business case for this project. I think she is right.You seem to dismiss the marine designers’ comments because they specialize in small boats. Yet I find it troubling that your consultants do not appear to have talked to any local experts including the ones who actually designed the ferries that now operate in the harbour. I’d say that Tony Thompson’s advice would likely have been as useful as the data from those flawed case studies.I know you are an ardent believer in taking cars off streets and moving more people en masse. Yet, you still have to make the case that this ferry project would do that in a cost-effective way. In my editorial, I mentioned the construction cost overruns the larger BC car ferries ran into. The BC auditor-general concluded that the cost estimates were unrealistic; there was inadequate planning; financial risks were underestimated and the project was rushed. I wonder if some of those conditions don’t apply here as well.Bruce
May 21, 2008, Dave McCusker to Bruce Wark:There is nothing wrong with questioning the project. Its those who are dismissing it without understanding it because they think it is all a big plan by Mayor Kelly to favor residents in Bedford.First off, the study is only two years old. We didn’t realize until after the reports were printed that the consultant mistakenly dated it as 2005 and not 2006 which is when the report was actually produced.The economic model developed by the consultant simply takes all the inputs and calculates the outputs. There is no cell in the spreadsheet that says “Do these systems typically make profit or not?”. The financial viability of the service is calculated, not judged. If you want to challenge the outputs you have to challenge either the inputs or the soundness of the calculation. The great thing about the assessment is that they ran multiple scenarios, then on top of that did several sensitivity runs. As you know, the optimal profit was with a 350 passenger ferry and a $5 fare. But we can predict from the model how that changes with a ferry halfway between a 350 passenger and 205 passenger ferry and a fare closer to $3. Considering such departures from the consultants recommendations is not guesswork, they’re covered in the analysis. These scenarios result in a loss, in many cases approximately the capital cost of the project, but still recover their operating costs. That’s still better than the rest of our transit service. The “persuasive business case” is right in the report, unless you insist that the most effective transit operation in HRM is not enough and an optimally profitable business is required.We committed over a year ago to update our market data before committing to ferry building. Our initial market data is substantiated by our current experience, where the percentage of people who live in Central Dartmouth and work in downtown Halifax who take the ferry is even higher.I can guarantee you when EYE Marine built the current ferries, they were told explicitly how big to build them. They are experts in building boats to meet defined needs, not defining the needs.I have absolute confidence in the ferry project and encourage you to continue monitoring our progress and asking questions.Dave McCusker, P.Eng.Manager, Strategic Transportation PlanningHalifax Regional Municipality
May 22, 2008, Bruce Wark to Dave McCusker:Hello Mr. McCusker: Thanks again for taking the time to reply to my questions and e-mails. As you know, I have not suggested that the fast ferry project is simply a big plan by Mayor Kelly to favour residents in Bedford. In fact, you and the mayor may be right about the feasibility of this project. I feel that the case for it has not really been made in terms that the public can readily understand. Thank you for writing: “I have absolute confidence in the ferry project and encourage you to continue monitoring our progress and asking questions.” I respect your obviously genuine confidence in the project and I’m glad that you’re encouraging us to continue asking questions. I hope we will be able to continue our dialogue, not just on the Bedford fast ferry, but on the many other transit issues that HRM is facing.Bruce