(a) The list price of the vessel, the Stena Challenger, was $60 million CDN, firm and final. However, it appears that Marine Atlantic, MAI, was able to negotiate a $2 million reduction on this price, for a final cost of $58 million. The vessel is also subject to a 25% foreign vessel import duty and 15% harmonized sales tax, HST, on the purchase price, for an additional combined cost of approximately $25 million.
(b) MAI followed an open and trasparent process in selecting its vessel. Early in the fall, MAI carried out some initial market research on the availability of vessels. Subsequent to receiving formal direction to negotiate on the purchase of a vessel and to maximize market coverage, MAI proceeded with an invitation to tender, ITT, to secure firm offers from brokers.
In their vessel search, MAI went to the market and researched over 40 vessels that were suggested by shipbrokers. Analysis was done on the suitability, cost and capacity of the vessels. A short list of six vessels that appeared to be reasonable candidates for the gulf service was developed. In November of 1999, a technical team was sent to Europe to inspect the six vessels.
In december 1999, with a desire to proceed with a transparent selection process, MAI issued an ITT to maximize market coverage and to secure firm offers. Using previously developed criteria, an assessment team composed of MAI personnel and a naval architect from Public Works and Government Services Canada, PWGSC, formed a short list of three candidate vessels; a night ferry, a day ferry and a Ro-Pax, from the 27 vessels offered by brokers through the ITT. Of the three vessels, one was subsequently removed due to its advancing age, high price and lack of adequate head room for commercial traffic. The two remaining vessels, owned by the same company, were deemed to meet price, condition and capacity requirements. Of these two, the Stena Challenger was chosen by MAI as best meeting their fleet requirements.
(c) Twenty-one brokers from around the globe submitted a list of vessels in response to MAI's ITT. To avoid the issue of multiple brokers claiming the same vessel, MAI requested that the brokers provide a letter of acknowledgement from the seller, identifying them as the preferred broker on any particular vessel. The Stena Challenger, was submitted by Brax Shipping AB of Gothenburg, Sweden, along with the appropriate letter of acknowledgement from Stena Lines.
(d) The Stena Challenger is nine years old. Constructed in 1991, it will be the youngest vessel in MAI's fleet.
(e) The Stena Challenger was built in Norway by the Fosen Mek Versteder Shipyard.
(f) The Challenger had undergone a refit prior to being purchased by MAI and will require only minor modifications. This work will likely be carried out just prior to the vessel being put into service on the gulf in 2001 after the current lease contract has expired. No decision has been made yet as to which facility will be used to carry out the upgrade.
(g) Having recently undergone a refit, MAI anticipates that very little upgrading will be required to the Challenger and would involve such things as the installation of additional seating, Canadian approved safety equipment and new signage. Most of the work is minor in nature and it is expected that is should be completed within a month to six weeks of receiving the vessel.
(h) MAI estimates that it will cost $2 million to bring this vessel up to Canadian standards, however, registration and vessel survey and inspection fees are included in this amount. Actual modifications and upgrade expenses are estimated to cost in the range of $1.3 million.
(i) No, the vessel has only been registered under the name the Stena Challenger.