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Should Washington let other states build its ferries?

A state auditor's study recommends saving money by changing the monopoly held by state shipyards and rules on apprenticeships. Not so fast, says the state transportation leadership.
Washington state's newest ferry, the Chetzemoka.

Washington state's newest ferry, the Chetzemoka. Washington State Department of Transportation (WSDOT)

To trim construction costs, Washington's Legislature should remove a requirement that all government-owned ferries be built in-state, concluded a state auditor's report released Thursday.

Those requirements would be lifted under specific circumstances: when not enough in-state bids are submitted to create meaningful competition, or when the price tags on those bids are judged to be too high. Washington has at least three shipyard companies theoretically capable of building ferries for the state.

The report also recommended modifying apprentice requirements on shipyards seeking ferry contracts in order to let more bid. Currently, only Vigor Shipyards — with five locations on Puget Sound and at Port Angeles — has a state-approved apprenticeship program. The others have their own apprentice programs, but don't meet the state's legal requirements.

Washington has the nation's largest ferry system, with 22 boats carrying 22 million people and 10 million vehicles a year among 20 terminals. Nine boats are between 40 and 65 years old, and are supposed to be replaced in the next 20 years.

Washington State Ferries' ships "are among the most expensive ferries purchased in the past 20 years compared to the amounts spent by other U.S. ferry operators," the report said. 

The auditor's staff — aided by outside ferry construction experts — looked at 39 ferries built in the last 20 years, including six for Washington State Ferries. Converting all the costs for all 39 vessels to 2011 dollars, the study concluded that three Washington 202-car ferries were the three most expensive on the list. And three Washington 64-car ferries were the sixth, 10th and 11th most expensive. The actual dollar figures were not listed in the report.

The study also compared Washington's 64-car Chetzemoka to the Massachusetts-based Island Home, since the Washington vessel was copied from the Island Home's design. The final costs in 2011 dollars were $87.3 million for the Chetzemoka and $48.5 million for the Island Home. Both boats were the first of their class to be built in each state. The conventional wisdom is that construction of subsequent vessels with the same design is cheaper.

The biggest factor in the difference in the two boats' costs was orders for modifications during construction, the auditor's report said. At least  $10 million in change orders went into the Chetzemoka's construction, compared to $624,000 in change orders for the Island Home.

Washington State Ferries has one144-car boat under construction for $147 million; the original cost estimate was $115.3 million and the state has already paid $136 million so far. Another 144-car boat is awaiting construction immediately afterward and is expected to cost less because of bugs worked out during construction of the first boat. A third 144-car boat is a possibility if additional transportation dollars are found.

As part of a reply to the report, the state Department of Transportation wrote that it "agrees that exploring alternatives to the Build In Washington law may result in shipyard competition to build ferries; however, further studies would be needed to determine if any savings resulting from competition, especially competition outside of Washington, would offset the benefits to the state of a stable shipyard work force and economic benefits of in-state jobs."

Rep. Judy Clibborn, D-Mercer Island and chairwoman of the House Transportation Committee, said she has heard complaints about the difficulty in meeting the state's current shipyard apprentice requirements. That matter will likely be addressed in the upcoming legislative session, she said.

Meanwhile, modifying the in-state-only shipyard requirement would be more complicated because that measure helps the state's economy, she said. Also, Clibborn said the first two 144-car vessels are already contracted for. If a third 144-car boat is added, it will likely be tacked onto Vigor's current contract because it would be cheaper to use an operation with two boats already under its belt rather than seeking new designs and a new shipyard for a third one, she said.


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Comments:

Posted Fri, Jan 4, 8:23 a.m. Inappropriate

The Auditor's report is bogus. Claiming the Island Home and Washington's 64-car ferries are identical shows they don't have a clue what they are talking about. That's like saying two cars, both mid-size sedans, built by two different manufacturers and workforces in different parts of the world, with different specs, different engines, for different operating conditions, are identical.

And asserting that shipping $100-million contracts out of state will "save money"? Clearly they have their blinders on. The money from those contracts to firms in Washington, which involve not just the main shipyards but also dozens of Washington subcontractors and suppliers, has a multiplier economic effect of 2-3 times. Build them in Mississippi and none of that occurs here. By the auditor's logic maybe we should drive all Boeing jobs out of the state, so we could "save money" by eliminating the tax breaks Boeing gets.

Can money be saved on ferry construction? Of course. But the way to do that is to plan ahead so ferries don't have to built in a rush to replace old vessels that have broken down and are removed from service in an emergency. And reform WSDOT and WSF, maybe starting with getting rid some of the dozens of ship designers they employ, since they hire out design services. But having ferries built in Louisiana or Mississippi? Stupid.

Posted Fri, Jan 4, 7:23 p.m. Inappropriate

If we actually, continually, built ferries as needed I might agree with you.

But we don't.

Posted Fri, Jan 4, 1:59 p.m. Inappropriate

So it has only taken 10 years for the Auditor to recommend ideas that the Safe Passage Ferries project outlined in 2002. The program would have delivered 4, 130 car, 1200 passenger Island Class ferries for a total cost of $242 million (2002 dollars) in a 27 month period. And the WSF would not have had to pay a dime until the new ferries were completed, tested and ready for service. The project was proposed by a consortium of Martinac Shipyard, GE Industrial Systems, Rolls-Royce and others. The ferries would have been built in Washington with apprenticeship utilization and local hires. What is old is new again.

Posted Fri, Jan 4, 7:24 p.m. Inappropriate

Is it new again, or are the bureaucrats just getting around to reading the 2002 materials?

Posted Fri, Jan 4, 3:03 p.m. Inappropriate

Martinac's proposal was a pipe dream, smoke and mirrors, and the company could not have delivered, which is why it wasn't taken seriously. Martinac has built tugs and fishing vessels since 1967. Since it began in 1926 Martinac has built one ferry, a 14-car vessel delivered to the State of Alaska in 1957, more than 50 years ago. They did some of the work on some of the recent ferries for WSF, but not as the lead.

Posted Fri, Jan 4, 4:58 p.m. Inappropriate

Wouldn't want to save money and ease the burden on the taxpayers now would we.

My question is why have a ferry system in the first place? It's contribution to the economy is? Zero. Of course the state will trot out a bunch of studies they conducted that will show positive numbers, but these are the same folks that allowed professional free loaders to pollute the ferry system for over a decade. Plus they can't even build off ramps correctly on the first try. I'm from DOT, you can trust me to do the right thing and be a good stewart of public money.

Those that want to get to an island or live on one will figure it out. Some one will build a ferry with their own cash, not the taxpayers, and charge the true cost of ridership. Right now only the islanders benefit. Remember you can't be poor white trash and live on an island in Puget Sound, make those rich 1%ers pay their own way.

Djinn

Posted Fri, Jan 4, 7:26 p.m. Inappropriate

Wrong-o. Tell me how highways contribute to the economy, add that to your ferry analysis, then plus that with the fact that ferries are the # 1 tourism attraction in Washington State.

You are certainly right : We cannot trust DOT nor WSF.

Posted Sat, Jan 5, 8:58 a.m. Inappropriate

When the state drove the Black Ball Line into bankruptcy and nationalized its domestic routes in the 1950s, the promise was that the new state ferry system was only temporary. All of the ferry routes would be replaced with bridges by the early 1980s. So far, the state has built exactly one of those bridges - the Hood Canal bridge. So much for the grand vision. The ferry system is a vital part of the Puget Sound economy. It's a shame that the state is so inept at running it.

dbreneman

Posted Fri, Jan 4, 6:02 p.m. Inappropriate

Djinn: Ferry users pay FAR FAR more of the operational cost of the ferry system than bus riders, train riders and even people in cars. And even greater magnitudes more than bicycle riders.

Furthermore, your contention that everyone who "lives on an island" in Puget Sound (uses a ferry) -- by the way, what island are referring to for the Seattle-Bremerton route -- has some kind of superior income is, at best, ignorant garbage. You clearly don't have a clue about that.

Ferries are by state law part of the state highway system. They provide major economic benefits beyond ferrying commuters, including moving tourists, goods, reducing VMT by cars that would otherwise drive around, etc. Imagine what it would cost to replace them with bridges?

Maybe next time have some tiny grain of an idea what you are writing about before you choose to foist it on others?

Posted Fri, Jan 4, 7:41 p.m. Inappropriate

Better drive around on the islands and take a good look at the autos and boats. It doesn't look like Aberdeen or Forks or Raymond or Olympia. Take a good look at the park and ferry ride lot, you'll not see junkers there on a regular basis. We're talking 1%ers as the primary everyday ferry user. Sure there are tokens that use it but how often could a minimum wage earner ride the ferry and still have a roof over their head? Pull your head out.

Lastly it's about choices, something you fail to understand. People who live on this side of the sound or on an island, do so because they want to, nobody forces them to make that choice. Yet thousands of us have to support their choice. Sorta like the blue/red state debate that liberals so love to toss around. When your brain gets back from vacation, call.

Djinn

Posted Sat, Jan 5, 9:03 a.m. Inappropriate

Yeah, I almost never take I-90. It's time that all those rich people in Spokane, who live there by choice, start taking care of themselves. We ought to tear up I-90 and teach them a lesson. Even better, everyone should be forced to live in Seattle. Then we won't need highways or ferries at all.

dbreneman

Posted Fri, Jan 4, 7:22 p.m. Inappropriate

There are so many things wrong with the ferry system.

First - we must have more boats. 22 boats moving 22 million people and 10 million vehicles is absurd.

Second - of those 22 boats, 9 are between 40 and 65 years old - aging boats without a firm plan.

Third - Washington doesn't build enough boats in a decade, let alone a year or two to worry about where the boats are built. Let the best bidder produce the best boats. Pretending that the requirement to build boats in Washington State cripples our budget, our expectations, and is simplistically stupid.

Fourth - and maybe this should bump up to FIRST "Washington State Ferries' ships "are among the most expensive ferries purchased in the past 20 years compared to the amounts spent by other U.S. ferry operators," the report said. The facts are that the WSF system combined with the Washington State Legislative system is beyond broken. It's completely stupid.

Fifth - Have you been aboard the 2 64-car baby boats serving the Coupeville/Port Townsend/formerly Keystone runs? OMG. They lean, they have way too much passenger space, they are disjointed caverns of people-less spaces. Waste, waste, waste. If one doesn't tip over in a windstorm, we'll be extremely fortunate.

Sixth - Demand that the legislature provide stable and adequate funding for ferries. They are marine highways, serving everyone, including military.

Seventh - My fav: Make ferries be Interstate Highways. They truly are.

Eigth - If ferries are the # 1 Tourist Attraction in the entire State of Washington (check WSF website), why are we allowing our valuable tourism industry to ride on old, rusty, dirty ferries after sitting for hours in nasty ferry lines? Are we sending a 'Do Not Return' message to our tourists?

Ninth - and this probably should be # 1 ... what exactly is the number of administrative personnel employed by WSF (who do not work aboard ferryboats, and who do not work selling tickets or handling parking queues)?

Tenth - What the h-e-double-toothpick do those administrators do? Actually do?

Posted Sat, Jan 5, 2:45 a.m. Inappropriate

Not mentioned in the article is that requirements to keep the construction of the ferries in-state removes them from consideration from federal grants. This cost the state 30-50% of the cost of the vessel being constructed, on top of the higher construction costs.

The new 64-car vessels, when priced on a per-car basis are the most expensive car ferries ever built anywhere-ever! They are also the most expensive ferries to operate in terms of fuel consumed per car carried (amongst the other vessels in WSF's fleet).

Humbug

Posted Sun, Jan 6, 7:40 a.m. Inappropriate

Why doesn't Washington State pass a law saying that all of the Trains and cars and light rail rolling stock be built in Washington? All State operated Trucks, automobiles other vehicles be built in Washington too? Just to be consistent.

Cameron

Posted Mon, Jan 7, 5:31 a.m. Inappropriate

If all you care about is cost, why not buy Chinese ferries?
The new Bay Bridge in SF is primarily made of Chinese subassemblies, put together by American workers.
It was cheaper than any US bid.

Of course, this is a double edged sword- on the one hand, we save money. On the other hand, we lose jobs, industrial infrastructure, and institutional knowledge. All of which makes it harder to shift production here again, when, as it inevitably will, Chinese prices go up.

The chinese currently subsidize steel production and export industries, but are shifting national policy away from commodity production to higher value added, high tech manufacturing. In addition, Chinese wages have been going up an average of 15% a year, and oil prices will continue to creep generally upwards, affecting freight prices.

Unlike many of the commenters here, I actually work in the metal trades, and see the benefit of local manufacturing and shipyards. The benefits of building these boats locally is much larger, and widespread, than just the wages or profits.
The industry as a whole benefits, with things like suppliers, subcontractors, trade schools, and skilled employees all being created and staying here as a result of a synergistic manufacturing base.
I have employed a dozen or more young welders who were trained at community colleges whose main focus is shipyard, energy industry, and manufacturing. Without those companies hiring, these schools would shift their focus.
Without the larger base of shipyards (close to 2 dozen between Seattle and Vancouver) there wouldnt be steel suppliers stocking material, or specialized cutting shops, or tooling and fastener suppliers- all of which serve other industries as well.
Janicki now employs 550 people in Sedro Wooley, in cutting edge manufacturing.
And part of the reason they are here is availability of people and supplies that are here due to our overall manufacturing base.

Many people think software is all we make. They are wrong.

Rniemi

Posted Tue, Jan 8, 11:55 p.m. Inappropriate

A couple of thoughts...
As a resident (30 + years) of a non-bridged island, I must say that the idea that "we are the 1%" is big laugh, albeit with a bittersweet 'back', since most of the kids who have grown up here can't afford to stay, anymore. We had factory jobs here, before "globalized trade" (& the capitalist's eternal search for arbitrage/ 'economies of scale'/ wage slaves) while shipping was cheap swept our blue-collar sector clean. It makes sense to me to build our ferries here, and operate a State Bank to provide banking services for that kind of endeavor.

There WAS a time when the Lazy B even put together some planing-hull passenger boats, which, if pursued, could have moved commuters from South Sound/Tacoma to Seattle & Everett, etc faster than light rail, in pretty fair numbers. (Those prototypes may still be running somewhere... like Singapore, maybe.) With the easy profits to be made from Defense contracts, though, it's hard to wean 'our' big builder off the government teat, to focus on something Useful; and (like the passel of Boeing hands that commute by Harley from Southworth daily) I'm sure that a Lazy B brand cycle would be a big hit... and certainly within their capabilities to provide.
As "global trade" swept nearly all the last farms out of the Green/White R. corridor all the way to Sumner, and replaced them with warehouses, this Recession has shown the value of a diverse economy... and one that supports a strain of subsistence & regional self-reliance. While the WSF System has been notorious for a rather imperious take on their position (until I-695 brought a "wake-up") it IS a legitimate part of our "Highway System"... not a frill to lure tourists onto the water for a little cruise. ^..^

herbert

Posted Sun, Mar 3, 10:03 a.m. Inappropriate

Probably we should think about outsourcing every job. That way we won't have to do a durn thing. Yay. Now try looking for a job. Look first of all. As taxpayers we pay for our military. Plans for a ferry boat of the highest caliber should be provided through the naval architecture for about twenty dollars shipping. Then the shipyard would and should be only responsible for quality work. If you hold the shipyard as the bank and don't provide materials then it is going to cost more. If you wait to the last minute it will cost more. Washington needs to keep this work and provide apprenticeship so we can be building the best ferry in the world.

maxweld

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