Local shipbuilders face another tough fight with international players as BC Ferries prepares to purchase more vessels to help replace its aging fleet.

In a recent speech to the Vancouver Board of Trade and at a session with reporters afterward, BC Ferries president David Hahn said B.C. firms are not assured of receiving contracts that will be awarded in coming months to build small and medium-sized vessels.

BC Ferries is looking to replace the mid-sized Queen of Tsawwassen and three smaller northern route vessels.

"I think my statement's been the same from the beginning, which is: I think (local shipbuilders) are fully qualified, I think they've got the infrastructure to do it, they have to decide what their price is," Hahn said.

David Hahn puts the onus on B.C. shipyards to make feasible bids.

His comments come after BC Ferries awarded a $355-million contract to a German firm in September to build three Super C-class ferries.

The decision angered local shipbuilders, unions and provincial and federal politicians alike - even some in the Liberal provincial government, which is the sole shareholder of BC Ferries, a former Crown corporation that became an independent company in 2003.

Over the next 15 years, BC Ferries plans to refit 22 vessels - all small to medium-sized ferries - at a cost of $2 billion.

Hahn, who has repeatedly come under fire over the past year for his cost-cutting measures, indicated that he won't play favourites - either way - when it comes to choosing a local or overseas firm. He insisted that the bidding will be a fair and open process.

"I wouldn't announce, if I was going to do a price negotiation, that I was only going to do it in B.C. - or I might as well add $10 million to the cost of the ferries," Hahn said.

But George MacPherson, president of the B.C. General Shipworkers Federation, said Hahn has no business making such a comment. He said Hahn hasn't spent enough time meeting and talking with local workers.

"We believe that we can be competitive with any company in the world when it comes to building ferries for BC Ferries," said MacPherson.

MacPherson and local shipbuilders contend they were never given an opportunity to bid on the Super C vessels project.

Hahn countered that three Canadian shipyards were invited to bid, along with 11 international players, but only one Canadian firm, North Vancouver-based Washington Marine, actually bid and was eliminated early in the selection process.

Citing "expert evaluations," the BC Ferries boss contended that Washington Marine lacked infrastructure, technology and experience necessary to construct Super-C class vessels.

The last time BC Ferries contracted for Super C-class vessels, in 1994, North Vancouver-based Versatile Shipyard, formerly known as Burrard Yarrows, built two - but the company has since gone out of business.

According to BC Ferries, the new Super C-class vessels will operate on the Horseshoe Bay-Departure Bay and Swartz Bay-Tsawwassen routes. The specifications are for 160-metre vessels that can accommodate 370 vehicles and 1,650 passengers.

For comparison, the existing C-class vessels that operate on the Horseshoe Bay-Nanaimo route are 139.5 metres and can accommodate 330 vehicles and 1,466 passengers.

Hahn has said the small to medium-sized ferries, which make up most of the 22 boats to be refitted, are "the sort of work where B.C. shipyards have demonstrated expertise, and projects where our shipyards should be very competitive."

That comment, and a pledge to continue to provide B.C. firms with $100 million in annual maintenance and refit work, were viewed as conciliatory. But Hahn took a tougher stance while addressing the Vancouver Board of Trade and reporters afterward.

He placed the onus on local shipbuilders to prove that they can make bids that are financially feasible.

"Their obligation is to sit down with the shipyard workers' union, or whoever they have to, to determine what their best price is," said Hahn. "It's all in their corner."

Meanwhile, Hahn said BC Ferries will seriously look at privatizing selected routes outside the company's core operating area.

"If you're looking for a pattern here, there's a big capital investment that needs to be made," said Hahn. "And if somebody wants to step up, put the money up, get a return, do it for less and do it better than BC Ferries, then we're going to encourage them to come try."

The runs under consideration for privatization include Mill Bay-Brentwood Bay on Vancouver Island and Comox-Texada Island plus three northern coastal trips.

Hahn said specific conditions on each route explain why they are being considered for privatization, but the need to replace aging ships makes this a logical time to explore outsourcing. All aspects of operating vessels on the water, including crews and ships, could be privatized, said Hahn.

The routes in question also attract less passenger traffic than main runs.

Over the past year, Hahn, an American who is considered to be a privatization specialist, has often come under fire for his fiscal streamlining efforts. Around this time last year, he was at the helm as BC Ferries went through a strike that eventually saw the province invoke a seven-year contract that will see the company through the 2010 Winter Olympics.

He added it's "a big assumption" that some of BC Ferries' 4,700 employees will be "let go" as a result of the privatization of the routes, but also admitted that some employees could lose their jobs.

The company is not overstaffed, he said, but employees are underworked.

"You can't have a lot of employees that only get 200 hours worth of work a year - they can't live," said Hahn. "There are some employees that are on our rolls that haven't worked in three years. I don't know why they're still on our rolls.

"It's really just bringing a better sense of order. We want to give more people full-time regular jobs and have less people out there only getting 200 hours a year. It's kind of insane. The union agrees with it, but we have to restructure the way the workforce works so that they have meaningful employment."

Hahn said restructuring is required because BC Ferries faces competition from local and overseas companies as well as others not yet anticipated.

However, B.C. Federation of Labour president Jim Sinclair said it's impossible to get around the cost of building the new ferries and echoed MacPherson's comment that local shipbuilders and workers just want a fair opportunity to bid.

He said privatization and contracting out spell a "lose-lose situation" for British Columbians. By retaining the routes, he said, BC Ferries will be able to hold the line on fare increases, provide jobs and spur economic activity.

"Fares are going to go up and privatization will put them up faster," said Sinclair. "(Hahn) doesn't come from here and doesn't understand us and doesn't understand how much those ferries mean to British Columbians," said Sinclair.

(Monte Stewart can be reached at monte@businessedge.ca)