Sample Record for Search: Newspapers-Canada

JUDY LINDSAY
Vancouver Sun Edition: 1* Page: D1
October 01, 1991
Section Heading: Business
Word Count: 561

Text:
BUSINESS; COLUMN
THE DEAL that keeps the Versatile drydock in Vancouver harbor shows some astuteness on the part of the federal government.
It's true that Ottawa is paying another $8 million for the drydock, having already paid $40 million for it a decade ago. If the $8 million had not been forthcoming, however, Versatile Pacific Shipyards proposed to sell it offshore, leaving the port of Vancouver without a facility for repairing big ships.
Better to spend the money to get the drydock out of hock than to see an important asset, primarily owned by Canadian taxpayers, end up in another country.
The end of the government's days as a drydock owner are in sight, however. The deal calls for Seaspan and Allied Shipbuilders to acquire ownership of the drydock over the next 10 years, and they have to cover any operating losses.
So Ottawa moved to protect an investment while putting the burdens of ownership on the two-company consortium.
This is not what the local shipyards had in mind. They had pictured the government continuing to own the drydock while making it available to local yards for repair work.
But when the dust settled late last week, Ottawa was fast fading from the picture, the two private companies had put up $1.8 million and were looking at ownership.
The reason they weren't anxious to own it is that the drydock's commercial viability is questionable. Versatile president Peter Quinn says the dock is expensive to operate and faces tough foreign competition.
That a difficult selling job lies ahead is indicated by the $4.3 million in the deal for extraordinary start-up and marketing costs.
The province of B.C. put up $6 million to make the deal work, for which it has received preferred shares in the consortium. This, according to a press release, will allow the government to receive "a fair share of the profits without exposing the government to further liabilities."
That will be a share of nothing if the consortium is no sharper than Versatile at drumming up business.
*
On becoming premier, Rita Johnston denounced hand-outs to business. Last week she said she wouldn't be making gifts of money to try to win votes. Yet here is her government, providing $6 million to the Vancouver-based marine industry.
She hasn't been making any hay out of the drydock deal because of the total absence of job figures. No one can say how many people will be kept employed at the facility, or at suppliers.
A superferry announcement would make a big splash, however, as building one of these giants requires 1,600 person-years of work. The first of two superferries - 470 cars, 2,000 passengers - is under construction at various yards, at a cost of $120 million.
It's hard to see how Johnston, leading a campaign in desperate need of good news, can resist announcing the second superferry soon to try to boost the Socreds' chances.
*
Sometimes the oddest things turn out to be good news. That's the case with the new stumpage figures released by the forests ministry.
Forest companies have been hit with an average increase of 15 per cent in the price they have to pay the government for timber. Despite the recession in the industry, most of the companies will grin and bear it.
Given the battle being waged with their American competitors over so-called "subsidized" Canadian lumber, the B.C. industry was looking for an increase, as required by the stumpage formula, and not for a break on its timber costs.

Copyright Vancouver Sun 1991

Descriptors: