Orders -- No. 38 -- Thursday, May 11, 2000 -- 10 a.m.

2000 Legislative Session: 4th Session, 36th Parliament

The following electronic version is for informational purposes only.
The printed version remains the official version.

[ . . . Schedule A ]

ORDERS OF THE DAY -- Continued
No. 38 -- Thursday, May 11, 2000 -- 10 a.m.

Schedule B

WRITTEN QUESTIONS ON NOTICE


1 Mr. Campbell to ask the Hon. the Minister Responsible for BC Ferries, the following questions: --: 1. The Auditor General's 1999 report on the fast ferry project stated that, at the time the project was approved in 1994, "Treasury Board staff recommended that the 10 Year Capital Plan not proceed until additional details were provided, and that the fast ferry option be deferred until BC Ferries could `demonstrate that the technology has been proven and the risks to the province are minimised.'" What information did the members of Treasury Board request and from whom?; 2. What technical studies were submitted that showed the technology was appropriate for the Horseshoe Bay-Departure Bay route? Who prepared the studies?; 3. Did Treasury Board approve the June 29, 1994 announcement that the government was proceeding with construction of three Fast Ferries?; 4. Was it traditional policy for the government to publicly announce a project going forward without it having received full approval to proceed?; 5. What were the details of the $210 million budget for the fast ferry project?; 6. The 1999 report by Hugh Gordon to the Crown Corporations Secretariat stated that the Ten-Year Capital Plan approved by the BC Ferries Board appeared to only include the construction of two fast ferries, whereas the Auditor General's report stated that it appears the submission was for three ferries. What were the details of the Ten-Year Capital Plan as presented to Treasury Board?; 7. Were there any differences between the submission to Treasury Board and the announcement on June 29, 1994?; 8. What was the physical description of the vessels? How many passengers? How many vehicles? The length?; 9. The 1994 Treasury Board approval of the fast ferry project was "in principle." Did Treasury Board set an expenditure limit before the project would be reviewed to give final approval?; 10. A Business Plan was not prepared for the 1994 Treasury Board submission on the fast ferry project. Is it standard policy for Treasury Board to approve a multi-million dollar project without a business plan?; 11. Frank Rhodes left his position as President of BC Ferries to become Deputy Minister to the Member for Vancouver-Kingsway, then Minister of Employment and Investment, at the time the Minister was looking at bringing fast ferries to BC. He then returned to his position as President of BC Ferries to implement the decision. Did Minister Clark ask Frank Rhodes to act as his Deputy Minister to establish the fast ferry project?; 12. Did the Member for Vancouver-Kingsway, then Minister of Employment and Investment, further ask Mr. Rhodes to return to BC Ferries to implement the project?; 13. Transportation consultant Sam Bawlf was a key participant in the fast ferry project. Was Mr. Bawlf present at any presentations made to the BC Ferries Board or Treasury Board on the fast ferry project?; 14. If so, what were the details of the discussion?; 15. Was any follow-up information requested at those meetings? If so, what was it?; 16. Former Secretary to Treasury Board Lawrie MacFarlane advised the Public Accounts Committee that the 1994 fast ferry project budget was inadequate. Were any concerns raised by members of Treasury Board about the quality of the information provided in the budget? If so, what were the concerns?; 17. What further budgetary details were requested by members of Treasury Board, and when were they expected?; 18. The vessel costs, as approved by Treasury Board in 1995, were $65 million per vessel. The 1994 approval was based on $70 million per vessel. What information was provided to justify a decrease of $5 million per vessel?; 19. The size and configuration of the vessel approved in 1994 was smaller than the present design, as unveiled in the fall of 1994. Did members of Treasury Board address concerns that the cost of the vessel decreased, even though the length of the vessel increased, by 20%, and the vehicle and passenger capacities were increased?; 20. Did Treasury Board staff or anyone else offer any documentation to address this fact?; 21. In the fall of 1994, the Member for Vancouver-Kingsway, then Minister of Employment and Investment, was at a meeting where the design of the Pacificat was unveiled. At that meeting, one of the participants raised questions about maintaining a $70 million per vessel budget even though the vessel design was substantially changed. Who raised this concern?; 22. Was there any discussion about this concern?; 23. Did the Minister, the Member for Vancouver-Kingsway, consider this concern? If not, why not?; 24. What were the details of the program infrastructure as noted in the budget that Treasury Board approved?; 25. The original 1995 budget that was considered by Treasury Board included $7 million for interest during construction. This line item was deleted from the approved budget. Why did this occur?; 26. The Member for Vancouver-Kingsway asked Mr. Bawlf to discuss the "privatization" of the fast ferry project, with SNC Lavalin taking over. What discussions did the Member have with SNC Lavalin with respect to management of the fast ferry project?; 27. What instructions did the Member for Vancouver-Kingsway give to Mr. Bawlf with respect to his discussions with SNC Lavalin?; 28. When BC Ferries stated its opposition to SNC Lavalin's involvement, did Mr. Bawlf have any further discussions on this matter with the Member for Vancouver-Kingsway?; 29. If so, what were the details of the discussion?; 30. Hugh Gordon's report to the Crown Corporations Secretariat stated that some contracts for the fast ferries were procured outside of Catamaran Ferries International's Materials Management Department. What contracts were procured outside of this method, and what were the values of the contracts?; 31. Have any investigations been launched internally or externally into this issue? If so, what were the results?; 32. How much money did the shipbuilding companies receive in `extras' due to changes in orders and inaccurate technical drawings?; 33. Where was the money that was budgeted for CFI's operating costs actually spent? The original budget was $17.5 million. The forecasted total costs are $36 million.; 34. The budget was based on a single shipyard building the ships. Why wasn't the budget adjusted when it was changed to have several shipyards build the ships?; 35. Mr. Rhodes has stated the decision to set up CFI was made in the fall of 1995. Mr. Bawlf has stated the decision was made in the spring of 1994. When was the decision made to establish CFI?; 36. Who made the decision?; 37. When was it decided that a single shipyard couldn't handle the construction of the project, and that the work would be shared among several shipyards? Who made the decision?; 38. What involvement did Mr. Rhodes have in negotiations between BC Ferries and Vancouver Shipyards/Washington Group after he retired?; 39. Why were the technical drawings not completed before construction began on the first fast ferry?; 40. Why was the passenger lounge completely redesigned after the original design was completed and the materials purchased?; 41. Why did BC Ferries, and not Catamaran Ferries International, pay John Wells, the General Manager of CFI?; 42. Why didn't the budget contain a line item for office equipment?; 43. During the 1996-97 and 1997-98 external audits, the auditors did not raise any concerns with respect to cost overruns on the fast ferry project. Why not?; 44. The Auditor General stated that in 1997, the project was approved unchanged except for budget increases. What documentation was provided substantiating a budget increase to $262 million?; 45. What individual or organization provided the information?; 46. What recommendations were provided by Treasury Board staff on the increased budget?; 47. Who made the presentation for an increased budget?; 48. What were the initial delivery dates for the three vessels? How were they established? Who established them? Were there penalties for late delivery?; 49. There is no evidence that the CFI Board of Directors approved the budget increase presented to Treasury Board in 1997. Why is there no evidence that this occurred?; 50. Did the CFI Board actually give its approval?; 51. The Auditor General states that the three independent members of the board of Catamaran Ferries International were subsequently removed, despite the fact that they were asking proper questions about the problems at CFI. What was the reason for the removal of these members from the Board?; 52. Did these independent board members have any discussions with government members or central agencies about potential cost overruns on the fast ferry project?; 53. BC Ferries was to provide monthly reports to Treasury Board and the Crown Corporations Secretariat, beginning in 1996. The first report was not provided until August 1997, and the reports later stopped altogether. Who at Treasury Board was responsible for receiving the monthly reports?; 54. When was the Secretary to Treasury Board informed that the monthly reports were late and subsequently discontinued?; 55. In the several meetings that the Secretary to Treasury Board had with BC Ferries CEO Tom Ward and BC Ferries staff during the summer and fall of 1998, did he ever once request answers as to why these reports were late?; 56. Who at Crown Corporations Secretariat was responsible for overseeing the fast ferry project?; 57. What actions did the Crown Corporations Secretariat take when the reports were not forthcoming?; 58. The Auditor General stated that Treasury Board and Crown Corporations Secretariat did not thoroughly pursue BC Ferries when monthly progress reports were late and eventually discontinued. Why was this information not pursued from BC Ferries?; 59. The boards of directors of both BC Ferries and Catamaran Ferries International also did not receive the information they requested from management. What action did the boards take to ensure they received the information they requested?; 60. Who demanded that the components of the first ship be put together ahead of schedule to parade it for the APEC conference in 1997?; 61. In the fall of 1997, Treasury Board staff verbally advised the Member for Saanich South, then Minister of Finance, that the launch of the first fast ferry in February 1998 would likely be delayed. Did the Minister take any action or request any follow up as a result of receiving this information?; 62. How much money was paid out in overtime to ensure that the first fast ferry was floated in June 1998?; 63. In a letter to the Public Accounts Committee dated January 24, 2000, Mr. Ward stated that he advised BC Ferries Chair Curtis Eaton and Catamaran Ferries International Chair Jack Munro of his concerns about cost overruns on the project, as early as the fall of 1997, and that they dissuaded him from taking any immediate action because of the possible negative publicity. Why did the Board of CFI not take any action when it was made aware of possible cost overruns?; 64. What were the reasons for dissuading Mr. Ward from taking any action?; 65. Who else at CFI was aware of possible cost overruns occurring as a result of the construction delays?; 66. Did any other staff of Catamaran Ferries International advise decision-makers about the possibility of cost overruns? If so, who was advised?; 67. Was the issue of cost overruns discussed by members of the Board of Directors of Catamaran Ferries International? If so, when?; 68. Did any of the CFI board members discuss these issues with the Minister and if not, why not?; 69. Did the Minister of Finance, the Member for Saanich South, express any concerns or take any action with respect to possible cost overruns as a result of the delay of the launch of the first fast ferry?; 70. Did the Minister raise these issues with staff and/or members of Treasury Board and/or Cabinet?; 71. Did Treasury Board staff express any concerns about possible cost overruns as a result of the launch delays?; 72. At the January 12, 2000 Public Accounts meeting, Secretary to Treasury Board Lawrie MacFarlane stated, "I think it's fair to say that the later on in the time frame, the more anxious we became -- as the boat wasn't in the water -- about whether or not the budget was still feasible." Why did Treasury Board not act to allay these concerns?; 73. The Auditor General stated that the Minister of Finance, the Member for Saanich South, removed the second and third fast ferries from the government's capital freeze, contrary to the rules Cabinet had established for capital projects. On what basis did the Minister remove the ferries?; 74. Who, if anyone, made the presentation asking for removal of the second and third vessels from the capital freeze?; 75. What recommendations, if any, did Treasury Board staff present to the Minister regarding the removal of the freeze from the second and third vessels?; 76. On what information were these recommendations based?; 77. The Auditor General stated that the forecast "costs to complete" figure for the project was withheld from the board of directors of Catamaran Ferries International. Who at CFI and BC Ferries was aware of this cost figure?; 78. Who at CFI and BC Ferries was aware that this cost was being withheld from the boards?; 79. From March to June 1998 the quarterly updates showed that the costs to date for the first fast ferry dropped from $83.7 million to $82.1 million. Did the board of Catamaran Ferries International discuss this fact during its meetings?; 80. If so, why is there no notation about discussion of this topic in the board's minutes?; 81. When was the board first made aware that the reduction in cost for the first fast ferry was due to a change in accounting treatments?; 82. At the November 4, 1999 Public Accounts meeting, BC Ferries CEO Bob Lingwood stated that newly installed BC Ferries Chair Michael Francis sought outside advice with respect to the hiring of Gavin Cooper as President of CFI when it was disclosed that he was not forthcoming about the changes in accounting practices. From whom was this advice sought? Why? What advice was provided?; 83. In the minutes of the July 9, 1998 meeting of the Capital Programs Committee of the board of directors of BC Ferries it is noted under the topic "Supplementary Funding Requests," that "management will provide the Committee with a report at a future meeting." What was the issue to be discussed?; 84. At the June 8, 1998 meeting of the Capital Programs Committee, the topic "Pacificat #1 -- Costs" was discussed under section F.1.C. What were the details of the discussion?; 85. A January 7, 2000 letter from KPMG states that during the annual audit of CFI, "the costs to completion of the first ferry was $91 million," and that, "it was becoming clearer during this period of February to June 1998 that the project would probably be overspent. The issue of accounting for cost overruns was discussed with the audit committees of both organizations. -- June 8, 1998." When exactly was this issue discussed? Was it brought to the attention of the Minister Responsible? If not, why not?; 86. In late summer of 1998, Treasury Board requested weekly reports on the fast ferry project of which Crown Corporations Secretariat received copies. The reports contain no significant financial information. Did Treasury Board raise concerns about the quality of information provided in these weekly reports? If not, why not?; 87. Did Crown Corporations Secretariat raise concerns about the quality of information provided in these weekly reports? If not, why not?; 88. The weekly project updates were provided to the "Deputy Ministers' Economic Strategy Policy Committee." Who comprised this group? What role did they fulfil in monitoring the project?; 89. All government agencies were required to submit the 1999-2000 Capital Budget submissions to Treasury Board by September 15, 1998. BC Ferries did not comply with this request, even though BC Ferries staff stated that the Ferries Board approved the submission in mid-September. What actions did Treasury Board take to follow up with BC Ferries when the report was not received?; 90. The minutes of the September 30, 1998 Catamaran Ferries International board meeting state that Mr. Ward was to meet with Treasury Board on October 20, 1998. Did this meeting with Treasury Board occur?; 91. If so, what was the nature of the discussions at that meeting regarding BC Ferries and Catamaran Ferries International?; 92. On November 10 and 12, 1998 Treasury Board reviewed Capital Budget submissions, with the exception of BC Ferries. It was stated that BC Ferries' submission would be dealt with later in conjunction with a review of the corporation's financial framework. Who at Treasury Board made that decision?; 93. Is it common practice for Treasury Board to delay reviewing mandatory submissions in this manner?; 94. The Auditor General was critical of Treasury Board, and others, for approving the project without a comprehensive budget. Does Treasury Board have a policy requirement that demands a budget be completed before approval is given to a project?; 95. If not, has Treasury Board had such a policy in the past?; 96. BC Ferries Chair Curtis Eaton said that he was notified in November 1998 that the cost of the first ship would be $94 million. Was the Minister Responsible notified at that time? If so, why did he not publicly disclose this information? If not, why not?; 97. The Member for North Coast, then Minister Responsible for BC Ferries, received a briefing binder on December 1, 1998, disclosing increased costs for all three ferries. What concerns, if any, were presented to the Minister at that time, and by whom?; 98. Did the Minister Responsible contact BC Ferries after these concerns were raised?; 99. In addition to the concerns that were presented to the Member for North Coast on December 1, 1998 by the Crown Corporations Secretariat, Mr. Ward has stated that he attempted to contact the Minister Responsible several times in December but was unsuccessful. Was the Minister advised that Mr. Ward was trying to contact him?; 100. Did the Minister Responsible ever subsequently check with his staff to determine whether or not Mr. Ward was actually trying to contact him?; 101. On a number of occasions, several members of the BC Ferries Board had serious concerns about potential cost overruns -- some as early as the fall of 1997. Between the fall of 1997 and January 7, 1999 how many meetings, official or social, did the Minister Responsible have with each of the BC Ferries Board members?; 102. Did any of the BC Ferries board members raise concerns about potential cost overruns on the fast ferry project at any of these meetings with the Minister?; 103. Did any of the board members raise concerns about the lack of financial information being received from the management of BC Ferries and Catamaran Ferries International at any of these meetings with the Minister?; 104. On December 9, 1998 the Capital Programs Committee of the BC Ferries Board received a report showing the first ship with an overrun of $21 million. However, at the BC Ferries Board meeting two days later no mention is made of the cost overrun in the report of this Committee. Why was this issue not discussed at the board meeting?; 105. The Audit Committees of both CFI and BCFC boards, the committees responsible for financial oversight met on December 10, 1998 and engaged an accounting firm to review the cost overruns. Why was this issue not discussed at the board meeting the following day?; 106. By December 11, 1998, the following BC Ferries Board members knew that the cost of the first ship would be $94 million: Joyce Smith, Frank Collison, Ray Whitehead, Shirley Chu and Ash Katey. Did any of them forward this information to the Minister Responsible? If not, why not?; 107. Prior to joining the government, former Minister Responsible for BC Ferries, the Member for Powell River-Sunshine Coast, stated that he had a boxful of government memos that showed the fast ferry would cost $100 million, months before the government admitted it. Was this information ever presented to the Auditor General?; 108. Has this information ever been presented publicly? If not, why not?

2 Mr. Thorpe to ask the Hon. the Minister of Finance and Corporate Relations, the following question: --: Will the Minister of Finance and Corporate Relations follow through on the promise he made on March 30, 2000, at which time he committed to provide a complete set of documents relating to the Vancouver Convention Centre -- the failed government megaproject that cost taxpayers $73,000,000 before it was cancelled?