Washington Gov. Bob Ferguson chose the sole out-of-state shipbuilder to construct the state’s new generation of electric ferries, opting for the lower-cost bid while likely inviting criticism from labor and environmental groups.
Eastern Shipbuilding Group from Panama City, Fla., will build three hybrid-electric ferries for the state system for $714.5 million — below the state’s own estimate and far below the only other bid, from Nichols Brothers Boat Builders, in Freeland, on Whidbey Island.
“After careful consideration and conversations with legislative leaders, I believe Eastern is the best option to build these critically important vessels at a fair cost to our taxpayers,” Ferguson said in a statement.
WSF’s new ferries are part of a nearly $4 billion project to completely electrify the fleet by 2040. That includes retrofitting six diesel ferries to hybrid electric, building 16 new hybrid-electric vessels and adding charging stations to 16 terminals.
In a statement, Joey D’Isernia, CEO of Eastern, said his company was “honored” to chosen for “this transformational project in the great State of Washington.”
“For over four decades, our skilled team has built high-performing ferries — many of which remain in service today — including the Long Island and Staten Island Ferries,” D’Isernia said. “We look forward to delivering best-in-class vessels that will serve the residents and visitors of the Puget Sound region for generations to come.”
Eastern’s bid is only part of the cost to build new boats. Considering the cost of owner-furnished equipment, construction management, crew training and risk contingencies, the first ferry will cost approximately $405 million.
Each boat after the first will cost less, according to the Washington State Ferries because “contingency risk decreases with lessons learned from each previous construction.” With that in mind, the state said the second will cost $360 million, and the third $325 million.
Ferguson’s choice of Eastern is sure to draw criticism. For years, the state required its boats to be built in Washington. But after a falling out with its longtime contractor, Vigor, the Legislature loosened a state rule requiring the ferry fleet to be made in-state, leading to a whole slew of concerns from lawmakers and advocacy communities, mainly about not requiring out-of-state builders to meet Washington’s relatively stringent environmental rules and providing a 13% bid credit for in-state contractors that do have to meet those rules.
Yet even with consideration of the in-state credit, Eastern’s lower bid was clearly more attractive to Ferguson. Eastern’s bid estimated the first boat would cost $251.3 million, and put its total bid for three boats at $714.5 million. Nichols Brothers estimated a first boat would cost $338.6 million, and its three-boat bid is more than $1 billion.
The state had previously estimated that boat one would cost $256.8 million.
Gavin Higgins, CEO of Nichols, said he was “shocked” and “disappointed,” and said Ferguson’s decision marked the end of ferry building in Washington state.
“This is state money going to support another state with weaker labor and environmental rules,” he said. “Ferries will never be built in Washington again. It’s a loss of a huge legacy.”
Higgins noted that he knew his bid wasn’t a slam dunk and that the bidding process was a “dogfight.” But he said he thought Ferguson would split the bid and have each shipbuilder construct a boat each, for quicker delivery of two boats.
In the end, he said he was focused on the missed chance for training a new generation of trades people.
“I wish the state the best. But what I’m really disappointed about is the lost opportunity that this would’ve brought to the state,” Higgins said. “I don’t know where people think they learn this work. They learn by doing it.”
As a modified design of Washington State Ferries’ Olympic class boat, the new ferries will each have space for 1,500 passengers and 164 vehicles. Below deck, water-cooled batteries will fuel the hybrid-electric propulsion system, both built by the Swedish-Swiss electric equipment manufacturer ABB.
Each time a vessel comes into the slip, it will connect and charge for 20 minutes, the amount of time a ferry typically sits at the terminal while passengers and vehicles unload and load.
