March 27, 2000
(Works, Services and Transportation)

I am extremely pleased to inform Members of the House of Assembly that on March 24, Justice Keith Mercer ruled that the Department of Works, Services and Transportation did not exercise any bias in the award of the Straits ferry contract to Labrador Marine Incorporated.

The judge has recognized that it is in the interest of the public to have the M/V Apollo ready for the Strait of Belle Isle service on the originally scheduled start date, which is May 1, 2000. Because of the judge�s decision, government can now meet its commitment to the people of the Labrador Straits area who have asked for an improved and expanded service.

Justice Mercer recognized the tender submitted by the plaintiff was rejected on more than one ground. He ruled that government acted in good faith in considering requests from bidders to issue addenda to the tender invitation. He stated that all bidders were given a fair opportunity to bid on the tender as revised and he therefore rejected the argument that there was a breach of duty of fairness in this regard on the part of the department.

Justice Mercer concluded that: "the requests for changes to the specifications were considered by government for its stated reason of ensuring receipt of tenders and that government�s decision to issue the addenda was taken with regard only to relevant factors respecting the provision of an enhanced ferry service for the forthcoming season."

The plaintiff in the recent proceedings alleged that the department acted unfairly in not granting them an extension to the tender deadline. Justice Mercer determined: "Government was motivated to deny the request for an extension by its concern to meet the stated objective of having a new service operational by May 1, 2000."

The judgement stated: "...I conclude that all potential bidders had a fair opportunity to bid on the Invitation to Tender, as revised by the addenda issued on December 10, 1999." The judge also said: "Accordingly I reject the contention of Puddister Shipping that the duty of procedural fairness was breached by either issuance of the addenda or denial of the request for an extension to the closing date."

At the time of the tender closing, the department believed from the documents provided by Labrador Marine Inc. and from the expertise of professionals in my department that the Apollo would be able to dock safely at the Blanc Sablon wharf. We subsequently issued a letter of conditional acceptance to Labrador Marine Inc. While the judge indicated that the decision to issue the letter of acceptance was unreasonable given the vessel length specification and the facts before the department at that time (January 20, 2000), I would like to stress that this was a letter of conditional acceptance. The department did not sign a contract with Labrador Marine Inc., but instead issued this letter of acceptance based on eight conditions. These conditions must be met before the final contract is awarded. It is to be noted that the vessel does indeed meet the length specifications. Mr. Justice Mercer stated: "...there may now be a reasonable basis for concluding that it [the Apollo] is capable of meeting the specification."

A couple of weeks ago, the Leader of the Opposition stood in the House of Assembly and made accusations that the Apollo had serious problems, such as asbestos. The owners of the Apollo had to publicly refute the member�s comments, but not before the damage had already been done. Not only is it wrong for others to make accusations without having done their homework, it is completely irresponsible.

The Opposition, in its desire to have my department�s decision quashed, has offended many individuals and groups in the Straits area and their actions prove they have blatant disregard for the needs of people and businesses in this area.

As I have mentioned in the House before, officials from my department and I spent a significant amount of time scrutinizing these tender documents and followed due diligence as required. We know we made the right decision, the judge knows we made the right decision, the people of the Straits who need this service know we made the right decision.

2000 03 27                                         2:00 p.m.