a Versatile plan: move NV ship repair facility aiter Polar 8 IF THE federal government had given Versatile Pacific Shipyards Inc. (VPSI the $500-million Polar Class 8 icebreaker contract, Versatile would have stopped all ship- building work at its North Vancouver yard once the vessel was built and then moved its ship repair division to the Duke Point area of Nanaimo, documents filed this week with the B.C. Supreme Court show. The documents were part of a standstill order issued to Versatile under the Companies’ Creditors Arrangement Act that gives VPS] temporary protection from its creditors. Versatile now has until July 15 to come up with a business plan that would be acceptable to all of its creditors. One of the court documents fil- ed was a Feb. 17, 1991 letter from VPSI chief executive officer Peter ‘Quinn to Cliff Mackay, assistant ‘deputy minister of Industry, ‘Science and Technology Canada. In the letter, Quinn criticized ithe federal government for waiting :so long to come up with a ship- : EE REE 44 1 must conclude that your officials believe that Versatile and its associates are scoundrels, that they have money hidden away somewhere ! and that somehow by driving Versatile into bankruptcy this money will mysteriously appear.59 — VPSI chief executive officer Peter Quinn 3 2 ? . 3 ba t Ndabatded wet 2yard restructuring policy once Ot- =tawa cancelled the Polar 8 con- Stract in February 1990. + According to the letter, VPSI Sand the federal government had Jagreed as early as 1989 to termi- ‘nate all shipbuilding work at 3 VPSI’s North Vancouver yard. 3 ‘**The (Polar 8) contract’? wrote Quinn, ‘was to provide for renewed working capital of $20 z million, for the closing of our North Vancouver shipbuilding ca- *pacity (which we started im- = mediately and which has caused us Zendiess grief), for special module éconstruction in Victoria (prepara- ztions for which have also caused zus grief) and for a restructuring “move to Duke Point when the + Polar 8 was completed.” : Quinn refused to comment in a Feb. 2, 1990 News story on reports that VPSI was pianning to _move its operations from North 3 Vancouver to Duke Point. 4 But in his fetter to Mackay, sQuiun wrote: ‘Your officials have iknowa from the start that we planned to move our ship repair ‘operation from North Vancouver *to Duke Point. No one believes -that large ship repair with the floating dry dock is viable in * North Vancouver or Victoria.”” Quinn added in his letter to Mackay that North Vancouver Ci- -ty, in its Central Waterfront Redevelopment Broadsheet, ‘‘had “accepted the likely uses for the By Surj Rattan News Reporter North Vancouver yard site, mak- ing it much easier to release funds for the stage-three investments in Duke Point.”” In the broadsheet, the city in- dicated a preference for mixed urban uses for the Versatile prop- erty. But in a July 13 News story, Quinn denied VPSI would be submitting a residential develop- ment proposal to the city for part of its Lower Lonsdale site. In his letter, Quinn told Mackay that Ottawa had already agreed to give VPSI $18 million in this fiscal year for restructuring its opera- tions and that Mackay’s depart- ment had agreed to set aside $22.5 million and ‘‘the amount we have discussed only until recently was 2 total of $28.5 million.”” “A Jogical analysis of your let- ter is that you can no longer fund us. Where has it (money) all gone? “I must conclude that your of- ficials believe that Versatile and its associates are scoundrels, that they have money hidden away somewhere and that somehow by driving Versatile into bankruptcy this money will mysteriously ap- pear.”” Quinn added that VPSI needs $15 million to survive and that Ottawa has only offered it $750,000 ‘‘with the knowledge that we will have to spend $200,000 more on lawyers to get it.’” He added that VPSI has ‘‘died bit by bit’’ waiting for the federal government to come up with a shipyard restructuring policy. Quinn also criticized Mackay for refusing to give VPSI ‘‘com- pensation’’ for ending ship- building at Versatile’s North Van- couver yard because it had not signed an agreement first. In the court documents filed, Versatile stated that it owes unsecured creditors $8,752,000. Secured creditors include: «the Hongkong Bank of Canada, which loaned VPSI $7.5 saillion; * Versatile’s parent company, Shieldings Inc., which is the holder of $5-million demand debenture, containing a fixed and floating charge against all of VPSI’s assets, except the floating dry dock; ¢ the Bank of Nova Scotia, which has a $20-million demand deben- ture containing a fixed charge against VPSI’s Esquimalt lands; eand the provincial and federal governments. Index @ High Profiles .......... 32 WHigh Tech............ 16 M@ Cocktails & Caviar ..... 314 4 W@ Lifestyles.............. 34 MComics ............... 39 WM Spiritually Speaking ..... 37 M@Fashion...............2% @PTravel................ 41 Weather Monday and Tuesday, cloudy with showers. Highs of 11°C and lows of 3°C. Secona Class Registration Number 3885 Sunday. March 17, 1991 - North Shore News - 3 NEWS photo Paul McGrath AS PART of a training exercise Burrard Clean Operations used helicopters and booms in a simu- lated oii spill. The objective was to improve knowledge of techniques if such an event occurs. Bowen passenger ferry service approved A VICTORIA company has won provincial government approval to operate a high-speed passenger ferry service between Vancouver, Bowen Island and Gibsons. The proposal received by Island Development Group Ltd. was one of five submitted to the provincial government. Transportation and Highways Minister Rita Johnston said Island Development will be allowed use of the Vancouver SeaBus terminal and added that Victoria has no plans to operate a similar service on the route for at least five years, “We're happy with the pro- posal, The operator plans to have the service running by the end of May and we look forward to this welcome addition to the marine transportation system in B.C.,”’ said Johnston. She added that the new service will offer travel options to com- muters and that the potential benefit to the Howe Sound area is ‘“*considerable.”” Island Development president Stuart Vinnels said he plans to have one vessel in service by May and another by September. The first vessel is expected to carry more than 200 passengers and travel at a speed of over 30 knots. Vinnels, a Victoria dentist, has been involved with the transporta- tion industry for the past year, having operated bus companies on Vancouver Isiand. He also ran a jetfoil service between Victoria and Seattle in the mid-1980s, be- fore the business folded. He said he has been working on the Vancouver-to-Bowen-Island By Suri Rattan News Reporter og,” eh B4 we HON. RITA JOHNSTON... pro- vincial government has no plans for the route for at least five years. and Gibsons service for about two years. “tc will be a quicker service. This will be a direct service (to Vancouver) using catamarans,”’ Vinnels told the News. He added that the route's initial boats will be brought in, but that his company will have other fer- ries built when it decides to offer ferry service from Vancouver to Victoria and Sydney, “The whole idea of the thing is to be cheaper and quicker. The people on Gibsons will be able to go to Vancouver to see a movie at night and return hume quickly,’’ said Vinnels. ‘‘It’s very hard to make a go of it with the high fuel prices, but we’re confident we can make a go of it or else we would not have done it.’”’ The company will prepare a schedule that would have two vessels providing 12 round trips a day to and from Gibsons, stop- ping at Bowen island and then travelling on to the Vancouver SeaBus terminal. The trip is expected to take less than one hour each way. But some Bowen Island residents have questioned the need for such a service. They argue that the service could result in more parking problems and that the present ferry and bus service is more convenient. The cost of the service to com- muters has not been revealed. But a consultant’s report in- dicated modifications, costing about $48,000, would first have to be made to the Vancouver SeaBus terminal and new terminal facili- ties would have to be built at Bowen Island and Gibsons, which could cost as much as $585,000. The report added that it would cost a private operator about $11,300 a day to run the ferry service. That cost, according to the report, would be met by daily revenues from the Bowen Island and Gibsons service, which could amount to as much as $14,000 a day, leaving a gross operating revenue of up to $! million a year. «eR. oe .