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March 21, 2022

PUBLIC ACCOUNTS COMMITTEE

The

Committee met at 10:50 a.m. in the Assembly Chamber.

CHAIR (Wakeham):

Thank you everyone, welcome.

Thank

you for your appearance at the hearing today. The Standing Committee on Public

Accounts is dedicated to improving public administration in partnership with the

Auditor General. The Committee examines the administration of government policy,

not the merits of it. The Committee strives to achieve consensus in its

decisions, whenever possible, and Members take a non-partisan approach to their

work on this Committee.

For

some housekeeping remarks, I remind participants that this is a public meeting

and their testimony will be part of the public record. Live audio will be

streamed on the House of Assembly website at assembly.nl.ca and an archive will

be available following the meeting.

Hansard will also be available on the House of Assembly website once it is

finalized.

Witnesses appearing before a Standing Committee of the House of Assembly are

entitled to the same rights granted to Members of the House of Assembly

respecting parliamentary privilege. Witnesses may speak freely and what you say

in this parliamentary proceeding may not be used against you in civil

proceedings.

terms of the hearing procedure, the Chair will ask the Clerk to administer the

oaths or affirmations to witnesses. Witnesses will be invited to make an opening

statement about two to three minutes, if they wish to do so. Committee Members

will pose questions to witnesses in turn for 10-minute periods.

I will

now ask the Clerk to proceed to administer your oath or affirmation and we will

begin. A copy of the wording for the oath/affirmation will be provided.

Swearing of Witnesses

Mr.

Brent Meade.

CHAIR:

Thank you, Brent, and thanks

for coming.

In your

opening remarks that you make to us, if you would perhaps provide the Committee

with some insight as to what your role might have been at the department in

relation to the procurement of these two vessels –

B. MEADE:

Yes.

CHAIR:

– at the time as part of

your opening remarks. I appreciate that.

Thank

you.

B. MEADE:

I will do that. Thank you,

Mr. Chair.

Good

morning, Members.

I was

the deputy minister of Transportation and Works from July 2013 to January 2015.

I had served as the deputy minister in the Government of Newfoundland and

Labrador for six years prior to that in other departments. When I came to

Transportation and Works, I came from the Department of Innovation, Business and

Rural Development.

I can

give some further context in a moment, but I would like to give some further

context to the department of transportation and works. The department of

transportation and works, the breath, the depth, the scope, the scale of that

department is enormous in the context of many other departments in this

government. I don't think that's changed since I left six years ago. Many, many

competing priorities face that department and many of them are quite significant

in complexity, financial complexity, logistical complexity, public service

complexity and political complexity.

The

capacity of the department, as with many departments in government, is often

strained and stretched. That would have been exacerbated in the period in

question, as we would have gone through things like program renewal, budget cuts

and budget constraint. In trying to deliver on a very complex and large mandate

of the capacity of this department, in my experience, was extremely stretched

and thin.

The

third element that I think I should contextualize is stakeholder management.

I've been in government for 22 years. I never saw a department that had such

tangly – if I should put it that way – stakeholder relations in all areas of the

department. You only have to talk about roadwork and potholes to talk about how

people can get fired up.

In the

context of marine services, elected officials on all levels, ferry users,

commercial users, the media, were really relentless in applying pressure to the

department and seeking remediation or addressing particular matters. Stakeholder

management was significant in taking the time and the resources of the

department, including the senior executive of the department.

I think

Marine Services Division or branch was probably the one that was most challenged

by this, in my experience in that department. They had many competing

priorities. I know the Auditor General reviewed this particular program at this

particular time but, at the same time that we were trying to build these two

ferries, we were also trying to deal with the Labrador marine services contract,

which as we know only has come to fruition in recent times. But that was a very

hot file at the time as well, the Labrador marine one, which is, as you know, a

substantially complex file with substantial financial considerations in it.

But

there would be other things. The ongoing management to Fogo and Bell Island

absorbed enormous amounts of time and pressure of this Marine Services branch.

To put it in context, Newfoundland and Labrador's ferry system and the Marine

Services branch was responsible for the second-largest ferry system in the

country. Second only to BC. Eighteen ferries were in the fleet at the time, I

believe, that I was in the department. So I think it speaks to again, if you go

back to the capacity and you go back to the structure, you go back to

stakeholder management, that it's very, very challenging work to undertake on a

day-to-day basis in that department.

Now,

that said, exceptional people were doing it. And I believe that the very best in

that department were trying to do the best they could with the resources that

they had. My role in this particular project was at the initial stages. I

would've been involved in the contract negotiation, including the sections

around the Industrial Benefits Agreement.

would've left when the MV Veteran was

about 30 per cent complete, I believe, and the

Legionnaire was just starting to be

built. I think the steel might've just been cut before I left. I say that based

on my recollection of a file that's probably eight years old for me now. But I

do know that these builds were approximately 14 months in length, and knowing

the time that these were completed, that is my recollection of where I would've

been on that.

So in

the context of the Auditor General's report, the Auditor General has broken down

the report into four sections. I would suggest to the Public Accounts Committee

that I would have had some role to play in the first two sections of that

report.

I am a

public servant at heart. Many of you probably know that I'm now a private

citizen and working in the private sector, but I'm a public servant at heart.

Those who know me well know that and know that the public service was my calling

and where I truly belonged; I still do belong. So I had no hesitation coming

here today. Even though I will be honest and frank with you in saying that my

experience with Public Accounts over the years has not always been the most

joyous.

But I

understand and I appreciated your opening comments, Mr. Chair, that you are here

in a non-partisan way to look at how we can improve the public administration of

Newfoundland and Labrador. It is with that spirit and intent that I'm here to

share with you my thoughts, to hopefully bring some clarity so that we can learn

from these experiences and truly provide a better public service to

Newfoundlanders and Labradorians.

Thank

you.

CHAIR:

Thank you, Brent.

You're

absolutely right. I mean, why we're here is to follow up on the recommendations

of the AG and to improve the process. It's not about blame. It's about

improvement, and thank you so much for those remarks.

I will

now turn it over to Scott to start off the questioning that he might have.

Again, we'll do it in 10-minute intervals.

S. REID:

Thank you very much for

coming here. I appreciate your opening comments. It sort of sets the way we – it

coincides with the way, I think, we, on the Committee, approached this exercise

as well. So I hope it's a positive exercise for you this time around.

I guess

there are four main questions that I jotted down as I was reading this report.

I'll just give you the questions. They're pretty broad and it'll give you an

opportunity to maybe comment on some of these things as you see fit.

So, I

guess, the first one is: What went wrong? There seems to be evidence that there

were a number of problems here in this report. What went wrong? Why did it go

wrong? You've touched on some of those things. How do we prevent these things

from happening again, in particular, our ferry fleet is aging, if we may pursue

the purchase of further ferries and things like that?

But

then in a broader way, you mentioned that you spent a lot of time in government,

and I know that from dealing with you in past, I'm wondering about the broader

implications of the findings of this report, specifically in terms of duty to

document and, I guess, service excellence and culture within a public service. I

don't know if you have any comments on any of those things.

B. MEADE:

Thank you, hon. Member.

There

are some big questions there.

What

went wrong? So I can only speak to – well, first of all, I don't think

everything went wrong. I do think that there are a lot of things that went right

in this procurement and this process. I think some of that's actually

highlighted by the Auditor General in the report. Well, maybe buried, it's

there. There are some good things that were carried out.

I mean,

I think, fundamentally, the way I would frame maybe this response to what went

wrong and why did it go wrong and how do we stop it from happening again, maybe

I can answer the three of those questions in one fell swoop. Because I do

believe that the Auditor General is identifying some of those systemic

challenges that departments have in managing complex projects.

I do

find it interesting that we continue to identify these – in this case, it was a

draft project management manual or program that was there and the AG frequently

comes up with these findings of draftings that are in the system. It always

bewilders me how they were draft. Why were these never formally adopted?

Elements of them, at some point, do get adopted and adhered to.

that's the first thing that I think we need to learn from this, is that the

project management capacity and tools need to be well defined and adopted. It

appears, in this case, there was a very good tool developed and elements of it

were adopted and used. I think it would come back to capacity in some respects,

as to why it may not have been fully used.

If I

was to turn back the clock and to say to you as a Committee: How would I do

something different? It would be when we went in with the just over $100 million

request to purchase these two ferries. We should have included a project

management team budget with that. We should have insisted that in order for us

to procure these vessels, to properly oversee their construction, to properly

operationalize them, you must add X per cent on top of this budget.

Now I

cannot give you what that figure is, because we would need to figure that out,

but, for argument sake, let's assume it's $5 million, five per cent or even 10

per cent, $10 million. What should have been presented at that time to Cabinet

was: In order for this department to take on the construction, the oversight and

the operations of such a complex ferries – because these were big ferries we

were building here, these were the biggest ferries we had ever built – we also

required dedicated resources in order to manage that in the department.

That, I

think, would have addressed many of the concerns in this report because we would

have addressed – back to my earlier comments in my opening remarks – the

capacity issues, substantially, in that regard. I think that is a big lesson.

How can we, as departments and government, when we are taking on these large

procurements, these large construction projects, how do we structure ourselves

in that?

Now, I

do think that the department of transportation and works has further evolved

since that time, since I was there around this. That is the second thing that I

think would need to be addressed: the whole issue of risk management. The AG

speaks to risk management and risk profile in here. I would put it in the

context of how you would transfer risk.

One of

the things that were obvious to me when I joined the department was that there

wasn't a lot of competency or capacity around P3, public-private partnership. At

that time, actually, that was one of the priorities that I took on, was try to

build that competency and capacity in the department.

The

reason was, aside from it being an emerging best practice in public procurement

and in the construction of public assets and to deliver public services, it was

also important for us to understand P3 from a risk profiling and risk management

perspective. How can you transfer risk from us, as government, to those who are

building things for us and what does that look like? I would suggest to you that

is the second element of how we could stop it from happening again, is to do

better risk profiling and risk management and to look at it in the context of

how you can transfer that risk.

Now I

can't speak specific because I was not there specific to the operational

mechanical issues. That's in

section three or four, an area where I was not in

the department at that time. So I am not specifically suggesting to you that

would have addressed that in the context of this project, but I think, overall,

if there is a learning here, it is that.

I do

know that transportation and works – I'm sorry, I can't recall its proper name

now because names changes so often, Transportation and Infrastructure I believe

it is now – has taken on P3 in a big way, so I can only assume that that

competency and capacity has been built in the department and is well managed. I

think that's the core element of it.

Your

last question is an interesting one: The broader implication around duty to

document. This is what I would suggest to you happened in Transportation and

Works, happened in my time there, in Transportation and Infrastructure, and

happens in a lot of departments, back to the capacity, back to stakeholder

management, back to just the intensity of the work. I would use the analogy:

you're walking in; you're getting on a treadmill. You get in there in the

morning, you get on that treadmill and you go and you go and you go. You don't

have time to stop and record your heartrate. You don't have time to stop and

record how fast you're going or how far you've travelled because you're just on

a treadmill and you're going.

Now, I

realize that's not an excuse. I realize that does not justify the failure to

document. But this has been a substantial debate and public discourse from the

Muskrat Fall inquiry, to others around the duty to document. What I would

suggest to you is that the information management and duty to document processes

in government are still evolving.

experience when I was there was that information management and duty to document

was very inconsistent across departments and across the system.

The

culture, the capacity and the resources that were available to departments in

information management and document control was substantially inconsistent

across departments. So I think that is an evolution in time, in term of trying

to build that competency, trying to work with the public service to understand

the duty to document, when and how; how to manage that information.

I was

not surprised when I read the report to see that the AG would have struggled on

certain elements of this review to find information, because the reality of it

is, those individuals were on the treadmill. So a lot of the actions they would

have taken on a day-to-day basis in the management of this project would not

have been documented, no.

I think

the

summary for me would be: Project management capacity and tools need to

continue to be strengthened. I think they have been to many respects in this

particular department. I think risk management and profiling needs to occur. I

think transfer of risk needs to occur with the private sector when they're

involved in the building or maintenance and provision of services. I think

continuing to build a public service that understands the need to document and

record, not only so they lead to better decisions in time but they lead to

better understanding of how decisions were made when we do go back to reflect on

or look at them, as we did in this case.

CHAIR:

Thank you, Mr. Meade.

Mr.

Brown.

J. BROWN:

Thank you, Mr. Meade.

One

question I had here is about the on-site supervisor that was sent to Romania. He

was deemed underqualified for the position even after an ad went out to look for

such an individual. They were later selected. Why was the department in such a

desperate state to find somebody to go to Romania as our representative over

there?

B. MEADE:

So hon. Member, the reality

of it is, the department – and this on-site supervision, of course, there was a

substantial amount of discussion in the AG's report about this. The department

knew that on-site supervision was the best practice. That's why they would have

issued the RFP that is noted in there. That would have came in – did not meet

it. They would have known that having someone on the ground in Romania was

important to providing insight into how the build was proceeding and also to act

in the interest of the owner, the department and government.

recollection of that is that we issued the RFP. It came in. I can't recall the

exact amount that the RFP was for, but I remember it was very high. It was a

combination of cost and some elements of them not meeting the criteria. My

recollection is cost was actually the most substantial obstacle to us

proceeding.

comes back to my point earlier; if we had the time back we should have insisted

that in order for us to proceed there was a certain amount of resources that

were required for us to manage the project.

But my

recollection is that it was a big price tag so we didn't proceed with the RFP.

But we did know that we had to find someone that could act on our behalf on the

ground. Damen did indicate that they did have some individuals that they could

recommend. One of them was the individual that is mentioned in the report that

was eventually hired. My recollection is that the individual had a sense of

experience in working with the British navy, if I recall.

The

technical review of his qualifications and all of that would have been done by

the Marine branch and my understanding is they were very comfortable with the

individual acting on our interests and having the appropriate experience and

expertise to do that.

that's how we proceeded then, as we would have entered into a contract for him

to undertake that work, that on-site supervision.

J. BROWN:

Thank you.

Another

part about it is we had five slots available to us at the Damen yard, we only

sent one person there about 40 per cent of the time. Is there any reason why we

didn't fill all the five potential slots that were given to us by Damen?

B. MEADE:

Again, I think it came down to capacity. Some of this would now be in a time

frame outside my service, but initially it would've been a capacity issue and a

cost issue.

That's

why, again, I reiterate, if I could turn back the time it would be to say if we

were going to go and build these ferries, we need X amount of resources to

properly provide on-site supervision, oversight project management.

J. BROWN:

Another thing, too, that

came up with this is the reports that were sent from the on-site supervisor,

many of the reports were just photos of progress with no actual written

documentation of what was actually going on. Why did the department feel that

was acceptable?

B. MEADE:

I wouldn't have been privy to that level of detail to be totally honest with

you. As a deputy minister, the ongoing project management of the ferries at that

time would've been done in the Marine Services branch. So the day-to-day

interaction with the on-site supervisor would be really a question better served

to direct toward someone in the Marine Services branch.

I can

only assume that they would've been comfortable with whatever level of

information they were getting, but again, I'm sorry, I'm really not able to

answer that question.

J. BROWN:

No worries.

Were

you aware of the letters from the shipyard to the government about the marine

support centre that Damen proposed to set-up in the province that just kind of

disappeared into the ether?

B. MEADE:

So I would've been part – this is under the Industrial Benefits Agreement?

J. BROWN:

Yeah.

B. MEADE:

So the first thing I would say to you about Industrial Benefits Agreements is

when I joined Transportation and Works, Industrial Benefits Agreements were not

normally part of any procurement. I brought my experience from Innovation,

Business and Rural Development to the department to say that we should be using

procurement as a tool for economic development. So where we can, we should try

to negotiate, we should try to partner with suppliers of public services, in

this case, the building of ferries, by entering into conversations around what

kind of industrial benefits they could bring to Newfoundland and Labrador.

So the

first thing I would suggest to you is – and this is not noted in the AG's

report, this would've been novel at the time that we were doing this. We did it

with the ferries, but we also did it with Bombardier when we procured new water

bombers. I would have brought that to the table, I would've engaged Alastair

O'Rielly, who was a deputy minister of Innovation, Business and Rural

Development who followed me in that position. We would have worked together, in

this case, with Damen to say: What is it you could do to work with Newfoundland

and Labrador to – particularly our focus was on building the supply chain. We

knew we had companies here that were positioned to support the building of

vessels.

worked with Damen and they came up with two or three things that they felt they

could deliver on. I do acknowledge in the AG's report that the clarity of role

and responsibility was that Transportation and Work's responsibility to be lead

on that; should it have been Innovation, Business and Rural Development?

At the

time, Innovation, Business and Rural Development would have been seen as the

lead department on anything around Industrial Benefits Agreements. Now, we were

the lead contractor, yes, but the understanding would have been that Innovation,

Business and Rural Development should have been the department that would have

facilitated the ongoing relationship with Damen in relationship to the delivery

on those commitments.

After

reading the report, I acknowledge that clarity probably needs to come around

that. That is another certain less o n that we need to have clear roles and

accountability around Industrial Benefits Agreements and build understanding

around what those are. So I would have left at a time when all of that would

have still be in flux. I know when I left there were still very active

conversations with Damen. I recall supplier chain days that were held. I

remember working with IBRD. They had a full day down at the Delta at one point,

I believe, where we would have had various companies from the supply chain

community; Newfoundland and Labrador met with Damen to talk about their services

and products.

Some of

those, as I understand it, were integrated into the building of these ships. So

I think there was certainly some positive. How some of those things – the Marine

Services support centre, or the Centre of Excellence, I believe that was

referred to, there may be a number of factors why that never transpired after

but I wouldn't be able to speak to that, because, again, I would have left at a

point when some of that was still in flux.

J. BROWN:

Do you think that if – with

your expertise with this file and that – do you think that the support centre

would have been helpful in the current situation we are in with the downtime of

the ferries?

B. MEADE:

May have been, I can't speak

to that. I don't have a technical background to speak to that as to whether it

would be, but I would simply say this, any time you have – if you have capacity

and expertise in Newfoundland and Labrador that can address any of those issues

related to the operations or repairs and maintenance of vessels, is a good

thing.

J. BROWN:

Thank you, Mr. Meade.

L. STOYLES:

Thank you for coming today.

You

talked about the HR part of the project and you talked about maybe not having

enough money, but when the contract was awarded and it was determined that it

was going to Romania, wasn't all that built into the cost for us to have a

project manager? Wasn't that cost already built into that? Because in reading

the report and knowing we could have more people on site and a project manager

on site and, of course, we see the first project manager didn't stay and we end

up having to get somebody else. Wasn't that all built into the fund?

B. MEADE:

No, I think that is the point I made earlier; it was not, from what I recollect.

My recollection is that as the Marine Services Division brought the procurement

of these vessels forward and we did not – again, if I could turn back time –

create a structure or a budget that could have been presented to Cabinet at that

time along with the procurement of the vessels, the cost of the vessels

themselves. We did not present a project management budget, no.

But, at

that time, we need to remember, I believe it was several months earlier that the

Marine Services Division actually laid off six people through program renewal.

So this was not an environment where there was tremendous opportunity to build

capacity or, I say, even a climate where this would have been welcomed to be

brought forward. That said, again, I think we should have been adamant that in

order to deliver on this project, you require these levels of resources. So as

in many things that happen, people figure out how they're going to do it with

the resources they have.

L. STOYLES:

So we had lots of people

here in this province working. I'm wondering how often did the department and

officials meet in the department. Did they have regular meetings? You mentioned

going to the Delta at one particular time to discuss the project, but because

the project was so big and so important to the ferry system here in the province

and the cost of it was so large, how often did you meet to discuss it? When you

realized that there were problems getting somebody on the ground, it didn't seem

like you reacted fast enough on that. I am just wondering if you can talk about

that a bit.

B. MEADE:

Some of this, again, would be outside my period. I mean, for the period of time

I was there, the project management process was up and running. So at the deputy

minister level, I would only have been involved at certain milestones.

So I

was involved in the kickoff meeting, for example, for this project. That kickoff

meeting had a couple of very important elements to it. One was the design check,

which is noted in the Auditor General's report as being completed and completed

satisfactorily. So that would have been a big part of the kickoff meeting.

would have talked about some of the larger milestones and decision points that

would need to be made as we progress towards the project. Again, this would be

for me, as a deputy, I would have been involved at something where it would have

been at a much higher level of project management, but I do know that the good

folks in the Marine Services Division lived this project day in, day out in

trying to manage it the best they could.

Again,

we did issue an RFP for on-site supervision. We did not fulfill that RFP. We

then did hire someone to be on the ground for us. Subsequent to that, it appears

the report then suggests, as it moves through the build, it was deemed that that

was inadequate, but, again, that's outside my time. So I would respectfully

submit that's probably a question to ask others as that came along.

At the

time I left, we did have an on-site supervisor. There would have been active

project management happening in the department. I mean, we would have had a

director of fleet development that would have been living this day in, day out.

L. STOYLES:

So what advice, now, moving

forward, if we were to do this again, what advice would you give to say this

went wrong or that went wrong? I know you've indicated a couple of things

already. I'm just wondering is there anything specific that was definitely

missed. We can see some of the stuff that was definitely missed from reading the

report. I'm just wondering, from a staff perspective, what you would see that –

if you were to be part of a project like this again what would you recommend to

the department?

B. MEADE:

Create a dedicated team; a

dedicated team to this project only. That's what I would suggest you would do.

L. STOYLES:

But wouldn't that have all

been part of the project in the beginning when – you talk about creating a

dedicated team, wouldn't that have been initially part of the full process?

Like, to me, it don't seem like – if we're going to do something, we're going to

start a project, wouldn't that be part of the full report before the project was

deemed to be viable?

B. MEADE:

I guess what I'm suggesting to you is I'm agreeing with you that if we were to

turn back time, that is the way we should've structured this. But there are

many, many examples, and many examples in Transportation and Works where the

staff take on multiple projects at the same time and try to manage all those

balls in the air at the same time.

This is

a systemic issue, and I guess that's the point I'm making, that if there's a one

fundamental lesson that I think we can learn is that when we are taking on

significant projects, infrastructure, procurement projects that government has

to also recognize that that requires dedicated resources and they should be

budgeted for. And in this case, clearly, it was, as Transportation and Works

would've done on many fronts, would've tried to manage these projects within its

existing staffing. At a time that, again, there was a lot of budget constraint

and downsizing occurring.

So you

have these pressures happening. You've got pressure of trying to manage a

department and dealing with things like program renewal and budget constraint,

at the same time, the public pressure of trying to renew a fleet – in this case

of Marine Services, renew this fleet – but also begin pretty extensive planning

in the Labrador fleet and the Labrador marine service.

I guess

the reality of it is when you have that many competing priorities, and back to

my context of all of those things of stakeholder management and the capacity of

the department, something's got to give – something's got to give – and what

gives, sometimes, in this case is projects are not managed with the level of

focus that may be required.

L. STOYLES:

Was there ever a time when

you were in charge, say, that you felt that it was – I don't know if emergency

is right, but concerns that things weren't getting done on time or –?

B. MEADE:

No, I can say unequivocally that I always had full confidence in the team in

Marine Services. First of all, I have full confidence that we negotiated a good

contract; I have full confidence in that. Two, I had full confidence that from

what I was involved in, the initial stages of project management and

development, that the proper framework was in place, the proper processes were

in place and we had a team, albeit they were pulled 10 ways to Sunday on many

other priorities, they were able to do the best they could with the resources

they had to manage the project.

I never

did see anything where it would require me, for example, to write a briefing

note or to go to a minister or others to say this is going south and it's going

south fast. I did not see any of those indicators in my time there. So I did not

see any red flags other than the ongoing challenge, again, of trying to manage

multiple projects with the staffing you have. I did not see any red flags in

particular that would've led me to raise alarms at that time, no.

L. STOYLES:

So in the report it talked

about at the end – you were long gone after that, but in the beginning was there

any discussion in Bell Island making sure that the wharf was going to be ready?

Were any of those discussions ever in place before you left?

B. MEADE:

Yes. I would've been there for those conversations. I would've been there for

the conversations around the shore preparation and construction for

infrastructure necessary to take both the

MV Veteran and the Legionnaire .

So I would've been aware that that work was ongoing. The Bell Island work came

later because the Legionnaire was a

vessel that would've had particular requirements, and that's why the study was

done before we signed a contract on the

Legionnaire – this is my recollection.

We had

a study done – and this is mentioned in the AG's report – to make sure that the

Legionnaire could actually work on

that run, and what would the shore-based requirements and what shore

infrastructure would've been needed for that. That was done and it was deemed

that it could be done. It would require some alterations to the shore

infrastructure, but it could be done and the vessel could operate there. So all

of that would've been done at that time, yes, before I left.

CHAIR:

Thank you.

Sherry.

S. GAMBIN-WALSH:

Mr. Meade, you've already

answered some of these questions. You've alluded to the fact that the atmosphere

in the department was like a treadmill, thank you for that.

So I'm

just going to ask you this question in reflection: Do you feel you, as the

deputy minister, had adequate staffing resources in the department at that

particular time to manage this project?

B. MEADE:

So at the time, hon. Member, I would say to you that at any given point in that

department we knew we were strained. The department was always short on

engineers. In any branch of that department, I would suggest to you, it was

under-resourced.

S. GAMBIN-WALSH:

Okay.

B. MEADE:

I mean, the competing demands in that department, and I said this in my opening

remarks, were just enormous. The priorities – at the time, we were building

schools; we had substantial roadwork that was under way; we were trying to move

government to doing multi-year roadwork planning at the time, I recall, and we

were trying to pursue that. And in the Marine Services Division, as I mentioned,

you had the ongoing management of Bell Island and Fogo in particular, but also

all 18 ferries, in addition to trying to develop a business plan and approach

around the Labrador marine service.

So the

short answer would be no, we would not have had enough staff.

S. GAMBIN-WALSH:

Okay.

B. MEADE:

And I think this is a case of capacity and resourcing in many respects. That's

why, again, I would suggest to you that as government moves through this, it

almost needs to take a project-team approach to this stuff. You cannot expect

the existing staff of departments to keep adding things on the corner of their

desk; that's the way I would put it. And that's what happens in these

departments, things just keep getting added to corners of the desk so all of a

sudden you're not doing anything justice.

There's

a story I like to share sometimes around how you have to make a tough decision

sometimes on stuff. I remember when I was appointed the assistant deputy

minister of Tourism, Culture and Recreation and the very first day that I was

appointed to the position I was advised that I had to go over and work with the

minister and the deputy at the time because we weren't going to open The Rooms.

The decision was made we weren't going to open The Rooms.

thought that was the most courageous decision that could be made. And the reason

why we did not open The Rooms is because at that time government felt they

weren't ready, that the resources weren't there, the capacity wasn't there to

open The Rooms. So we made the tough decision to defer the opening of The Rooms.

Sometimes when you bring these decisions to a head around capacity, around the

resources you have, you can make some tough decisions. And that was an example

of where they made one that year. They delayed the opening of The Rooms for a

year until we could be in a better position to do that institution justice.

Again,

I think, in hindsight, as a deputy in my tenure there, I feel I contributed a

lot to that department in the context of trying to build an understanding around

P3, industrial benefits and the whole transfer of risk and the role of the

private sector. I did a lot of work on safety in that department. You may be

aware that we had two fatalities in three years in that department during my

time there. One occurred before I went there and one occurred while I was there,

so safety became a big priority in my tenure there.

But if

I could turn back the time, it would be that if I could have instilled a

stronger discipline and approach to how we manage projects and resource them, if

we could've built that understanding, that would've been, I think, a significant

contribution and accomplishment. But that's the reality of the way government

runs, folks. This is not the only department people run on a treadmill. There

are a lot of departments where people are running on a treadmill and there are a

lot of departments where capacity and resources are a real issue on a day-to-day

basis, and we just keep trying to do the best we can; good people, exceptional

people trying to do the best they can with the resources they have.

S. GAMBIN-WALSH:

Thank you for that.

There

was a draft Marine Project Management Manual dated March 2009. It wasn't

considered as an established set of procedures. What policies and procedures did

the staff in the department use to guide them?

B. MEADE:

They would have used that to

some degree. As I understand, in the AG's report it was used. I cannot recall

the document itself to be totally honest with you, but I do know we had a team

that knew project management well. The ADM and the director of fleet management

were both strong project managers. They came with a background in project

management. I'm assuming that you may, at some point during these hearings,

speak to one or both of those individuals.

They

would have come with a project management background and would have followed

their own experience and expertise. Any of the normal policies and procedures

that would have been involved in the procurement, the contractual negotiation

and then the project planning around this, would have been adhered to. I'm not

aware, in this AG's report, of anything not being followed or contrary.

Madam

Member, I don't know if there's a specific policy and procedures you're

referring to or not, but I would think that, again, they would have used the

best of their knowledge and experience in applying their project management

skills to this project.

S. GAMBIN-WALSH:

Okay, thank you.

The AG

found that the department did not complete an overall project cost estimate.

There was a one-page document that listed cost estimates from shipbuilders in

Newfoundland, Canada and other parts of the world. Can you recall how the

department would have estimated the cost of this project and what it was

potentially going to be?

B. MEADE:

So there would have been a

call, there would been an RFP issued, of which there would have been multiple

bidders or proposals. My recollection is there was a process then put in place

to review those. My recollection is that it came down largely to two shipyards

that, obviously, in their proposals, they would have had costing included in

those.

When I

read the AG's report and saw how they were given a document, they were obviously

given, in some way, the

summary of submissions is what I would probably call it.

The costing of those submissions is what was provided to the AG. As I recall,

there were site visits to those shortlisted shipyards. There was ongoing

dialogue around their approach, their methodology, their experience and costs,

et cetera.

All of

that would have been put together and articulated in a submission to Cabinet to

make a recommendation on what shipyard we should go with to build these ferries.

That is the typical process. All of that would have occurred in this case. I do

know that there was a high level of confidence in Damen Shipyards at the time.

They did have a very strong track record in the building of ferries. These

ferries were built on

schedule and on budget. That is what I recall.

All of

that would have been part of a submission, all of that cost estimating and all

that. I'll repeat it one more time: If we had our time back, we probably should

have included how we could have managed this from a project management

perspective and built the resources around that.

S. GAMBIN-WALSH:

Okay.

During

your time there, can you recall anything about the human resource requirements

of the vessel, the crew staffing levels and how staff were going to be trained,

or conversations around how they were going to be trained for this new vessel?

Because this was a new design with new technology?

B. MEADE:

Yeah.

So not

in any level of detail, because that would have been an operational issue that

would have been made some point down the road. My recollection is I would have

been part of some early conversations about the fact that we would have needed

some training. I was part of some early conversations around how the builder and

ourselves would work together on that. But I was not there, and I would not have

been there, because that would have occurred further into the build, I would

suggest to you, of how those plans would have been put together.

S. GAMBIN-WALSH:

Okay.

Thank

you very much.

CHAIR:

Thank you, Brent.

It is

over to me. I just wanted to pick up on one comment you made. You said you had

full confidence in this being a good contract. I would agree that the Auditor

General tended to agree with you, because in Criteria 2 she did suggest that,

“The Department executed a contract with the selected contractor, the terms of

which effectively mitigated the risks to the province to an appropriate level.”

So that was good to see.

You

left the department in 2015, correct?

B. MEADE:

In January 2015, yes.

CHAIR:

Okay.

Prior

to your departure we had – someone on the Committee already mentioned about the

shipbuilder and their commitment letter relating to the service centre, local

partnerships and the Arctic research centre. Was that file still active when you

left?

B. MEADE:

Yes, it was. The two

elements that I remember very distinctly, that were very active conversations,

were around the Centre of Excellence that was going to be located at Memorial

University, because there were some very early conversations around other

private sector players who were going to come to that table. Damen wasn't the

only player that was going to be involved in that, there were other companies

that were starting to have the same conversation of how they wanted to be part

of a Centre of Excellence at Memorial University.

I would

have been involved in some early discussions around that. As I mentioned

earlier, I was aware and involved to a degree in how we could try to strengthen

the relationship between Damen and the supply chain. I knew there were

particular companies that were being identified and connections were being made

with Damen. They had a supplier day. I recall that. So those are things I recall

that would have been active on the industrial benefits side during my time

there.

CHAIR:

It did suggest that this

actual commitment letter did come in during your time with the department, and

then you had those conversations with the Department of Innovation and others,

is that correct?

B. MEADE:

Yes.

CHAIR:

Yeah, good.

wanted to go back and talk briefly about the studies that were done in relation

to the wharves. The Auditor General, page 9, talked about an infrastructure

study that was completed for a new vessel on the Fogo Island run in March of

2010. Then approximately 3½ years before the contract was signed in November

2013, she goes on to say: “A feasibility study, which had similar elements to

the infrastructure study noted above, had been completed for the Bell Island

route in November 2013” – again, as you had alluded to, I think – prior to “the

signing of the amended contract to procure the

MV Legionnaire ….”

Maybe you could tell me a little bit about how that process happened and

what you looked at in terms of that study before you actually signed the

contract for the MV Legionnaire ?

B. MEADE:

My recollection is that the

Fogo Island run review was well in hand. They had a good handle on what a vessel

like the MV Veteran would need on the

Fogo Island run. That's my understanding.

It's

because there had been infrastructure studies completed and done. It was Bell

Island that became kind of the late-breaking need to examine, because at the

time, there were ongoing conversations around the kind of vessel that could go

on Bell Island – the size of it, et cetera. When the decision was made that we

would look at building a second sister ship, that required us to answer the

question, can the Legionnaire

actually run on the Bell Island run; is it suited for that in terms of its

operability, but also in terms of shore infrastructure. That's why the

feasibility study for the Bell Island run would've been done much later.

I don't

know if that answers your question.

CHAIR:

Yeah, and it does, because

what I'm alluding to – so the feasibility study gets done, then the vessel gets

ordered. When did that RFP to make the necessary changes to the Bell Island

infrastructure actually get issued?

B. MEADE:

I don't have exact recollection on that, but I will say this to you, that this

is where there is another learning. The learning is that this is where other

elements, other branches of the department would've been involved in. The Marine

Services branch is normally not involved. I don't know if that's changed over

time, but when I was there, they ran the ferries. Anything related to shore

infrastructure was put under the Works side. So it was under the same

individuals who were doing the roads and doing that type of work who were also

responsible for wharf infrastructure. So there was a different branch of the

department then that would've had to work with the Marine Services branch to

make that happen.

CHAIR:

Right.

I'm

trying to understand when the contract was actually awarded to start the work.

B. MEADE:

I have no recollection of that, I'm sorry.

CHAIR:

Okay. I'll follow up with

some of the other people that we have coming in.

One of

the things you talked about was a project management team. The Auditor General

alluded to a project management team that had been set up by the department

early on in the process and talks about that project team had only met five

times between May 2009 and November 2009. Were those members of the team still

in place when you were the deputy? Were they the same individuals?

B. MEADE:

I don't know, because I don't know the individuals that the AG would be

identifying specifically. I would suggest to you that most of them would've

been. They would've been individuals that would've had permanent roles in the

department. So I would think the individuals are individuals like the ADM

responsible for Marine Services, the director of fleet development, maybe the

director of fleet operations.

honestly can't recall the org structure right now, but I do know that there

would've been two to three directors in the Marine Services branch. But again,

it comes back to, Chair, the fact that they would've been involved in project

management of this, yes, but it would've been one of many other things that they

would've been doing.

CHAIR:

So the lead person reporting

to the deputy minister would've been the ADM responsible for Marine Services.

B. MEADE:

Yes. And then to the ADM, there would have been a director of fleet development

that would have been the primary contact on this project.

CHAIR:

That's who it would have

been, okay.

B. MEADE:

Yes. I believe that was his title: director of fleet development. I believe it

was.

CHAIR:

Okay.

There's

been a lot of talk, of course, about the document management process and this

seems to be something that has been evolving. It is still a challenge in

government. I mean, the Health Accord has pointed out about document management

in the health system. So, as we go farther into today's discussions, we'll get

an update on where the department is now. In terms of the draft document that

was prepared, it appears it's never been formally adopted but in your time was

that something that you guys relied on, that the department relied on, that

particular draft document? When you started to look at how you would go out and

look at managing this type of project, would that have been something you would

have used?

B. MEADE:

In reading the AG's report, she's indicating that there was a draft project

management methodology and planning process that would have been articulated in

the department. It is my understanding that the project team – again, those

individuals who had various roles in the department would have multiple

responsibilities and things to manage – would have used that as their guiding

document in managing the project. That, coupled with the project management

experience of those in the leadership positions.

I think

it is incorrect to say that project management did not occur here. Project

management occurred on this. Did it occur at the level of sophistication, at the

level of detail, the level of documentation that we would all aspire to? Perhaps

not. But project management occurred here. There were individuals that were

involved in this that know project management, knew how to deliver on it.

But

again, they would have been very, very challenged by resources and capacity

within the department. And that's why, again, I say if I could turn back the

clock, I think we need to look at more dedicated, project-specific project

management teams when we deal with these kinds of things.

CHAIR:

On behalf of the Committee,

I certainly want to thank you for coming here today. I don't know if you would

have anything in closing you would like to add or if any other member has

anything further to say. But I want to thank you for coming here and sharing

your knowledge with us on this particular file. Again, thanks.

B. MEADE:

Thank you very much and I

hope I was able to province some clarity. I know that, again, some of your

questions I was not the deputy minter of the department at that time, so I would

assume that you may direct those questions elsewhere. But I hope I was able to

bring some clarity, Mr. Chair, and some insight and thoughts on how we could

learn from this experience and many others that continue to happen as we try to

govern here in Newfoundland and Labrador.

Thank

you.

CHAIR:

Thank you, again.

The

Committee will now recess for an hour and then we'll be back here at 1 o'clock.

Thank

you.

Recess

CHAIR:

Again, Tracy, thank you for

coming here today.

remind everyone again that this is a public meeting and the testimony will be

part of the public record. Live audio is being streamed on the House of Assembly

website at assembly.nl.ca. and an archive will be available following the

Hansard .

Witnesses appearing before a Standing Committee of the House of Assembly are

entitled to the same rights granted to Members of the House of Assembly

respecting parliamentary privilege. Witnesses may speak freely and what you say

in this parliamentary proceeding may not be used against you in civil

proceedings.

We'll

ask the Clerk shortly to administer the oath or affirmation to you. I would

encourage you to make an opening statement and, Tracy, in your opening remarks,

maybe you can tell us exactly what your role might have been in your position at

the time that you were there with this particular

MV Veteran ,

MV Legionnaire piece.

Anyway,

the Committee Members basically will follow the same type of format as we follow

in Estimates. Each Committee Member will ask for a 10-minute interval and that

will pretty well take us to the top of the hour.

I will

now as the Clerk to proceed with the administration of the oath or affirmation.

Swearing of Witnesses

Ms.

Tracy King.

CHAIR:

Over to you.

T. KING:

Thank you, MHA Wakeham.

My name

is Tracy King. I was the deputy minister of Transportation and Works from

February of 2017 until September of 2019. My time, really, as it relates to this

audit is about Criteria 4 in the main and what happened once the vessels were in

service.

I'm

currently the deputy minister of Fisheries, Forestry and Agriculture, and I've

been a public servant for just over 20 years now. That's all I have to say. You

can ask away and I'll do my best to answer all the questions that you might

have.

CHAIR:

Thank you, again.

I'll

start again with my colleague Scott.

S. REID:

Thank you very much.

Thanks

for attending; we appreciate your participation.

I'm

going to sort of start with similar questions that I asked the previous witness,

the deputy minister, I think, immediately before you.

T. KING:

Twice before me.

S. REID:

Twice before you, okay.

Some of

the things that are identified in the report as issues relate to duty to

document and also things that relate to the training and the preparation for the

crews to service the vessels once they were delivered. So I guess duty to

document – I'm sort of interested in these issues because part of the idea is we

are looking at issues and are they part of wider problems within the public

service or does it pertain to this particular circumstance.

I guess

I am wondering in terms of when you took over the role, did you have problems

finding information about this project. Did the lack of documentation impact

your ability to make decisions or understand the situation? Also, from your

perspective during the time you were there, were there constraints or things

that would have interfered with your ability to document the issues as they

arose?

terms of the training, I'm sort of wondering – it seems there was a culture

within the department, maybe, of not being innovative and not being open to

learning new things. That's what it seems to me from reading this report. Maybe

the training wasn't planned enough.

So I am

just wondering if you would give us some comments or response to those issues

that were raised in the report.

T. KING:

Surely. Thanks very much.

I think

Mr. Meade laid out a lot of this really well this morning. I think the duty to

document – so I'm the deputy minister of my second, very large operational

department now and I would say issues of documentation persist. Although I would

say that issues are much less than they probably were at this period of time. It

has been, I think, a focus for some time. I think we've seen it in reviews of

the ATIPP Act. It has come up around issues in documentation, it is a common

thing that we have heard and I think the government and the public service have

strived to be better.

I think

about when I came to Transportation and Works, they had just finished, under the

leadership of the previous deputy, a significant project around increased

electronic documentation and increased electronic document management, and that

was a new and expanding system that had just been revamped shortly before I got

there and continued to be a priority after my arrival.

I would

also say the department was actually reorganized on the day that I came to the

department. It was a large reorganization in government that day. One of the

pieces in the reorganization of Transportation and Works was to move more of the

infrastructure files together, and I think it did two things.

One, it

put the people that could procure and knew about procurement together in one

group and separated their responsibility from the day-to-day management of

issues to letting them focus more on infrastructure projects and on government's

priorities for infrastructure. So I think that was helpful because suddenly, for

people who are building buildings and building things as their job, the

documentation of that, I think, is better and I think through the progressive

time as the department has moved through a period where we did more P3 projects,

all of that came together to improve over time.

Do I

think there are still issues? I'm not in the department anymore but based on

where I am and what I know, yes, you can always continue to do better on our

duty to document. I think we're continuously learning and as we see more on how

the duty to document actually rolls out practically, I think we'll get better

because it's an art to learn what to document, what to keep and what is

transitory and how you manage all of that.

thought Mr. Meade's comments this morning about being in TW and being a bit on a

treadmill and you're not always conscious of, you know, are you monitoring your

heart rate, are you keeping all the things you could keep, are you doing that, I

thought that was very valid. TW is a very operational department and there are a

lot of issues management going on every day, and the deputy and the staff are

pulled in a thousand directions. And so you may not have the resource, the

capacity or the time to document as much as you could.

found, for me, unlike for all of you, it's why documentation is so important –

when I went to the department, well, I had the people at my fingertips that were

dealing with all of this stuff on a day-to-day basis so I didn't feel like not

having the documentation hindered me because I had access to the people with the

knowledge.

But it

makes that kind of knowledge transfer very important and we're certainly seeing

some of that in the Auditor General's report in issues around getting some of

the documentation. So I think those would be my comments on the duty to

document.

When it

comes to training, I don't know – the initial training for both vessels was

largely done by the time I came to the department. But I would not have said

that I thought that there wasn't a desire or an interest in training. I mean,

the marine environment and Marine Services is heavily regulated. There are a lot

of Transport Canada requirements. The Classification Society and insurance

companies have a lot of requirements. So I wouldn't have said there was an

aversion to training. I would have said sometimes that the demands of continuing

to offer the marine service, while ensuring everyone could get to do all the

training that they needed to or wanted to do, was a constant pressure, because

recruitment and retention in Marine Services was no small feat. I think Mr.

Meade would have talked about that a bit this morning as well.

That

was a constant thing that we were going through was churn of people. So ensuring

that everyone had the time to get all of their training, to meet all of their

certificates and stay current with everything in Transport Canada, I wouldn't

have said there was any kind of aversion to that, more that it was trying to

carve out the time and the capacity to ensure that we're meeting all of the

requirements. Because, I think, certainly the safety management system in place

at Marine Services, there's a high degree of importance on public safety and our

employee safety. Room for improvement? Surely. Surely, always.

When it

comes to innovation, I know you talked about innovation; these new vessels had

controls and maneuverability like nothing else in the fleet. So it was a big

change in the department to move to these new vessels and to really ensure all

the new crew that were coming on were well prepared.

Do I

think we could have done more? I think this report demonstrates that there was

room to do more, room to provide more training over time and more consistent

training, and to ensure that as new crew members came to the vessel there was

more time for them to do the training, but there was a big pressure in

continuing to be able to deliver the service at the same time.

S. REID:

On page 29 of the report

it's documented in some of the comments that the shipbuilder that was doing the

training, some of the comments there that: “Some of the observations included:

‘have no interest whatsoever,' ‘just sitting gabbing on the bridge wing,' ‘hints

of going to familiarize themselves have been ignored,'” – this is the one that's

sort of concerning – “‘no way these guys are going to manage these vessels

currently.'”

That's

what the people conducting the training are saying. That would be sort of

concerning to me, if they were saying that. So I'm just wondering how that was

dealt with within the department. I'm not sure if that was while you were deputy

or not.

T. KING:

No, it wasn't. I think this

was pre my arrival in the department. Frankly, I didn't know about these

comments until I saw them in the report when it was published. Obviously, they

were around in the department, but it never kind of made its way to my office

that they were there.

But

it's not what you want to hear about any of the training or anything that's

being delivered to your staff, especially when you know that these are new

vessels with new technologies that we wouldn't have had the benefit to use in

the fleet before.

S. REID:

Yeah, and I think it

probably resulted in some of the issues that we had later – costly issues that

we had later.

T. KING:

Well, I think one of the things – certainly, safety is one of the top priorities

in the department and has increased, I think, in its priority over time. You

always talk about training when you're doing your root-cause analysis on any

occupational health and safety issue. One of the things you're looking at is: Do

staff have the training that they need to be able to perform their duties?

So I

think it's something certainly that I know in the discussions we would have

around the table on staff performance, when some of these issues arose – and

you'll see in some of the HR reports in here that did happen while I was the

deputy, that was certainly some of the conversation is: Do they have the

training? What do we need to do to improve the service delivery on the vessels?

CHAIR:

Thank you, Scott.

Jordan.

J. BROWN:

Thank you, Deputy Minister

King, for coming here today. I appreciate it.

In your

time in the department, was there any indication that the lack of training with

the staff was an actual issue with operations of these vessels? Where did you

find that they were – I'll say – gypped of their training because they

negotiated down the time of the training?

T. KING:

I certainly didn't feel that way, and it may not have come to my office because

that was operational and the Veteran ,

in particular, had been in service for a number of years by the time I got

there.

didn't feel that way, it's clear, though, I think, when you look at the thruster

issues that there were issues there: Was it training? I think it had to be a

part of it; I think it had to be a part. But whether or not that was because –

because I don't know about that employee and whether they took

part in that

training or not, because some employees need more support and different types of

training. So I can't point my finger and say it was because of that training,

but, yes, there were some employees who had training needs, yes.

J. BROWN:

And then we go back to that

part of it. Now, like I say, we had substantial issues with, obviously, operator

error. Did any of the captains or any one of those guys come and contact

yourself or anyone in the department of your time to say that there was some

issue with operations that seemed to be training based?

T. KING:

I think where I recall that

coming up was through some of the HR investigations that happened, particularly

around the thruster issue number three and the engine failure, which were the

two issues on the Veteran that I was

there for. But I think through the Auditor General's own report, we can see on

the Legionnaire ,

we didn't have the same type of issues, so I don't know because there was

similar crew. They had similar training over time and staff changed over time.

I'm not sure I can point the finger in that direction.

J. BROWN:

Yeah.

T. KING:

But in HR reports and in OHS

investigations, training is always one of the things that you look at to see

what do you need to do more of or differently.

J. BROWN:

Perfect.

Going

back now, during your time as deputy minister – we talked about the industrial

kind of plan or the letter that Damen sent to government, worked out with

government – was there any discussions about that support and service centre

with your department or with yourself, at that time when you came into the

office? I know it was much later, but was it still talked about even at that

point?

T. KING:

Not that I know. It might

have been happening at some other place in the department but not that I was

ever made aware.

J. BROWN:

I guess around your time it

was more post-deliver kind of (inaudible).

T. KING:

Yeah.

J. BROWN:

All that other stuff, I

guess, was put to bed at that point.

T. KING:

That's right.

J. BROWN:

Was Damen ever brought back

in after, in your time, to look over or discuss what was going on with any of

the vessels?

T. KING:

In the early days – and I

think the report points out even in the thruster failures in the

Veteran –

the shipbuilder was a part of those discussions throughout. So, yes, they

would have been earlier. I don't remember it as much by the end of my time at

the department, but in the early days – I wouldn't have been a participant in

those discussions but I remember that there were discussions with Damen.

J. BROWN:

Okay.

HR did

point out some stuff obviously in reports and stuff with the training and

everything like that. Was there any conversation about bringing Damen back in to

probably retrain some staff, or to expand on any of this training, if it's

starting to crop up in the HR reports?

T. KING:

I don't remember discussing

specifically Damen coming. Again, that might have happened at a different level

in the organization. We certainly talked about the need for training, but by

this time it was really going to be one-on-one type training for individual

employees rather than the kind of group training that I think is talked about

here, because there were – I think as the report notes and we found over time –

individual issues. I'm not sure we would have looked at whole crew-wide

training.

J. BROWN:

Okay.

Also,

you talked about that it was one-on-one or (inaudible). Do you think that the

department, at your time and with your experience and your time being there,

that training needs to be more of a priority with any new asset or anything like

that? Because it seems like there were a few slippages and stuff throughout

there, before your time obviously, that they negotiated to reduce the time of

training. But do you think that training needs to be more of a key asset when it

comes to receiving a new asset?

T. KING:

Yeah, I'll speak a bit more generally because you're right, I wasn't there and

at some point someone made a decision about fewer days and more crew members. I

can't go back in time for that. But certainly, when you bring a new asset on and

you when you know that you're responsible to run it and understand the systems

that go along with it, I think that is a very important part of any project

management plan that we would see going forward, for sure.

J. BROWN:

Was there any discussion

about safety concerns when it came to – like you said, you were there for

obviously the third thruster failing and then the engine failing. Were there any

discussions about the safety impacts that this had on the crew or on the vessel

or anything like that? Because these are very significant damages.

T. KING:

Yeah, they were. The vessels were significant assets; some of the damage caused

here was significant as well in dollar value and in time lost in the service, I

think for sure. When it came to vessel safety, the captain is the master of the

vessel and needs to decide if the vessel is safe to sail and under what

conditions. I could never presume to speculate on that; it is the captain's call

on what is safe.

J. BROWN:

Yeah, absolutely.

No,

more of an occupational health and safety aspect. We were talking about some

training; we're talking about some human error here. But, at the same time, just

wondering, from your perspective, was there a big gap between operations and

qualification in training? Do you feel that there was some kind of a knowledge

gap there that could have been pointed out earlier?

T. KING:

Sure. There are a couple of things that I would like to say about that because I

think, MHA Brown, you make some good points there.

By the

time I came to the department, of course, the safety management system in Marine

was in place and was running and was audited. From a public safety or an

occupational health and safety perspective, I didn't feel we were carrying a

huge amount of risk there. While, yes, training gaps, but I would also say that

I wouldn't limit that just to the newer vessels. This was new technology; these

were new assets. But I think training and development is an ongoing, continuous

issue and if asked do I think that throughout the system it's sufficient in all

areas, I would say probably no.

think, certainly Mr. Meade would've touched on this morning, in TW, you feel

like you're pulled in a thousand different directions all the time and you only

have so much resource and capacity and you put them to the best use you can. And

we always knew because – or I always knew or I always felt that because Marine

is so regulated, you knew that people had the qualifications that they needed to

do their jobs. So that was always something that we would know, that I always

took comfort in knowing, is that this was a highly regulated environment and

people had what they were required to have to do their work.

J. BROWN:

Thank you, Deputy Minister

King.

I'm

good.

L. STOYLES:

Thank you, Ms. King, for

attending the hearings today.

I guess

you came in after the vessels were basically done and coming on board. Did you

feel you had the knowledge and the support then to bring everybody together to

the table to – we talked about the HR part of it and, in the beginning, we

didn't have enough people on the ground in Romania. I heard today for the first

time that it was a money issue. My understanding, when the vessels were built

and the contract was issued that all that was part of it, and we could've had up

to five people there and we only had one person and there were times we had

nobody there. That was before your time. Once it all came and the vessels

arrived, and I know especially the Bell Island ferry, there wasn't anything

ready for them and it ended up staying for over a year before it could actually

be brought to Newfoundland. I'm just wondering what is your view on that.

T. KING:

(Inaudible) a couple of things, and, again, I think Mr. Meade did a really great

job laying some of that out this morning. In the end, I think these vessels were

delivered on time and on budget. Certainly when it came to the

Legionnaire , I think the decision to

leave the Legionnaire in Romania

until such time as the issues that were going on with the

Veteran could be sorted and fixed on

the Legionnaire as well, I think that

was a really prudent decision. Because it meant when the

Legionnaire finally did come into

service, I think the data here shows that once it actually started, it didn't

have an extraordinary amount of time out of service.

The

Veteran had an ongoing issue. There

were a bunch of issues, but the biggest one of course was the thrusters, and you

could see that a lot of people were spending a lot of time trying to figure out

what was going on. I think Mr. Meade's comments this morning about had there

been a specific project management team, could that have led to some different

outcomes. I mean, we won't know for sure, but it's likely that better project

planning strengthens your procurement and the ultimate outcome.

I think

on the operational side, again, had that kind of budget been done at the

beginning and that kind of project team, the operational issues would have been

more thoroughly planned as well, as part of that. And that's an area, I think,

that we've seen within the public service that we've had to get better at over

time. Because when you're building something, you're not always thinking about

the operational impact of that and it comes at some point later when you think

about we might need these extra resources after an asset is under way.

So we

need to always ensure we're giving the best advice that we can about not only

the construction aspect, but how that might impact the operation as well. That's

everything from the number of staff to the types of training. So I would agree

with Mr. Meade's comments from this morning about the difference that that kind

of team could have made.

L. STOYLES:

I guess you weren't prepared

for the amount of times the vessels were out of service and the breakdowns. I

guess nobody was prepared or expected that to happen, especially when you're

looking at new vessels. The public outcry, I guess, I'm just wondering if you

could speak to that a bit.

T. KING:

Yeah, sure, I can.

think, in Marine, we were looking at aging vessels across the whole service. So,

unfortunately, vessels being out of service and rebalancing that and trying to

deal with what happens when every vessel goes in for refit or when someone gets

ice damage or when the ramps aren't working – sometimes in Marine, depending on

what's going on, on a day to day, that's just a constant conversation and a

constant thing you're thinking about is what happens when the vessels go out of

service.

fact, when I came to the department that February, the

Legionnaire was actually on the Fogo

run. So while the Legionnaire didn't

come into service on Bell Island until July 31 of 2017, it had been used on Fogo

to fill a couple of couple of the gaps there, to help that balancing that's

going on within Marine.

I think

there was a general view that in the first few years of a new vessel operation,

you could expect that there would be some quirks. Like if you get a new model

year of a car, sometimes there are bugs and things that need to be worked out.

So I think people would have anticipated – or I felt like based on when I got

there, that people anticipated that there would be some issues. To be clear,

certainly not to the magnitude of some of the issues that we would have seen

with the Veteran , but to expect that

we might have had some bugs and things to work out as the vessels came into

service.

I think

people were aware of that but, again, the kind of outage that we saw,

particularly with the Veteran; it was

another vessel to manage as it came out of service. The team – Mr. Meade spoke

to it this morning – in Marine are really dedicated marine professionals. They

understand which of our vessels can move to what ports and have the right ramps

and all of those things. It was a constant discussion around the department

about vessel outages and those types of discussions.

L. STOYLES:

Were there any major changes

in the staff, like the captains of the vessels when the new vessels came? I'm

just wondering if that was an impact on some of the problems.

T. KING:

The crew was decided by the

time I got there – or to my recollection both crews were decided by the time I

got there. But I would say that movement around Marine Services and recruitment

and retention, they're highly qualified and skilled individuals that are

captains, chief engineers and things on vessels. There are lots of opportunities

for them, so I think recruitment and retention was hard.

Many of

you, I think, have noted reports in some years where when the sunshine list

comes out the number of marine employees that are on it. It's because they have

to really double back on shifts to ensure that vessels are all adequately

staffed. I would say that staffing in marine is a regular discussion.

L. STOYLES:

Moving forward – and I'm

thinking that the whole purpose of doing these hearings is to be able to improve

– if we were ever to go this route again, to send out an RFP to build new

vessels, what recommendation would you give, something that would be (inaudible)

or something, what went wrong. What recommendation would you give to the

Committee?

T. KING:

I think to that point, MHA

Stoyles – I hate to just keep coming back to what Brent would have said this

morning, but I think his point around a project management team because that

would have explored the operational impacts before the vessel came in to

service. So if you had had that type of team, I think that would have had a

positive impact later on, because that team would have not only been focused on

the construction, but they also would have known what was needed operationally.

I think I would agree with him on that.

L. STOYLES:

Initially, that was the

plan, to have a project manager to head up the project, plus have several other

people on the ground in Romania. None of that happened. So as deputy minister of

the department, that's why I was asking the question. As deputy minister of the

department, making sure a project manager was on site and knew what the project

was going to be about and understood the whole concept of it – that was,

basically, where I was going.

T. KING:

I think that is critical and I hope you will see that project management has

changed over time. I think one of the things in the reorganization of the

department and putting the infrastructure professionals together in one branch,

whether you build roads or whether you build buildings, that kind of team, I

think, supports that idea as well, because you're letting people focus on the

new asset instead of also trying to run an ongoing service. I think that type of

improvement would be important.

Brent noted this morning, the project management team designed at the beginning

was for people who had other responsibilities within the department. I think he

had suggested, and I would generally agree, that people that were focused solely

here on this procurement could have been helpful.

L. STOYLES:

Thank you.

S. GAMBIN-WALSH:

Thank you, Deputy Minister

King, for your time.

Recognizing that you're in the department from 2017 to 2020 and recognizing that

some of my colleagues may have asked some of these questions in a similar

format, I'm just going to reword them and ask them in a different format.

What

can you recall – or can you actually recall – anything about the shipbuilder's

commitments of additional business development initiatives that they would

explore with the assistance of the former Department of Industry, Business and

Rural Development?

T. KING:

I don't have recollection about that at all.

S. GAMBIN-WALSH:

Okay. Thank you.

Recognizing that the department did not have representation at about 58 per cent

of the inspections leading up to December 2015, what types of problems can you

recall these vessels having when you were the deputy minister. Can you recall

any evidence as to what caused these problems?

T. KING:

I don't know. I can't necessarily link having someone on site with some of the

issues that followed. But what I can say, certainly, is there were issues that

followed; I think the thruster issues are well laid out here. In the end, I

think two of the biggest issues that I was there for, the third thruster issue

and the engine failure, were linked to human error, but there were other issues

with the ramps and other things that were adjusted over time.

I think

those were the two biggest things and they both went back to human error. That

speaks to some of MHA Brown's questions about opportunity for further training

and development through the process.

S. GAMBIN-WALSH:

Okay, so that kind of goes

to my next comment or question. These two vessels are pretty complex new builds.

There's a lot of new equipment. I've been told that there are touchscreen

operations in these and liquid-cooled switchboards and it somewhat leads to,

sometimes, obstacles with training.

Again,

do you feel that we were probably ready for this type of complex equipment? Do

you feel that we have been ready as it pertains to training? I hear you talking

about trying to deliver the service and train at the same time. So in other

professions, often you will take out a block of time and train the staff, but

you can't do this because we have to be consistently delivering the service. Do

you see any solutions?

T. KING:

In an ideal world, there would be more staff. That would be ideal. Those are

hard to find, even if you had the positions and the resources. But I think

that's one of the things that can make it easier, obviously, to build time in

for training.

To your

question about do I think the vessels were the right ones from a technological

standpoint? These vessels are going to last us, please goodness, a very long

time in good service and provide longstanding service. So you're going to have

people graduating from the Marine Institute and other institutions that are

ready for this kind of technology and would expect to find that kind of

technology on a new vessel if they were coming on board.

I don't

think this was cutting edge in we were early adopters on technology, I think we

were right in line with where the technology in the industry was. These are

large vessels serving large communities, so different than some of our other

services. But I think it does mean it was really important, as much as we could,

to take advantage of the training offerings, whether that be some in Romania and

some here. I remember captains being up at the Marine Institute before the

Legionnaire came into service

practicing at different wind levels.

I think

it was important because we do have that here. We are very fortunate to have the

facilities at the Marine Institute that can help us do those kinds of things. We

should just take advantage of that as much as we can.

S. GAMBIN-WALSH:

Thank you very much.

T. KING:

Thank you.

CHAIR:

Over to me.

Hello

again.

There

are a couple of things I want to follow up on as well. The first being, again,

that idea of a commitment letter about the service centre local partnership

Arctic research centre. Your former colleague, when he was here, Mr. Meade,

talked about the fact that that was a very active file, still, when he left in

2015. You didn't come until 2017, so there's a gap there, but you've stated, I

think, that when you got there in 2017 there was no more talk of this particular

Arctic research centre or service centre. Is that correct?

T. KING:

That's to the best of my

recollection. Yeah, and I wouldn't have thought it was my mandate. I should also

– I think the AG report points out that a lead would have been at the industry

department, but I don't remember any conversations. I've been trying to, since I

read this report, think about it, but I don't remember any.

CHAIR:

That's good, because

tomorrow morning we'll speak with the deputy that was there prior to your

arrival. They may be able to add some clarification to where the file actually

went.

The

decision by the department, I guess, to negotiate with the shipbuilder to cut

the training time in half from the shipbuilder's initial proposal to accommodate

double the number of crew members trained, was that on your time as a deputy or

was that before?

T. KING:

Not to my knowledge. I

believe that was before I got there.

CHAIR:

Okay.

Because

that obviously leads me to other questions around the links between the human

errors that have occurred and the training deficiencies, which are clearly

highlighted in this Auditor General's report. Again, I'll defer that until the

morning, on that particular one.

There

are lots of comments in here, of course, and we all know about it. You were

there during the amount of downtime for the

MV Veteran and

MV Legionnaire ; combined

out-of-service periods, according to the AG's report, totalling 607 days;

“Equipment failures and vessel damages resulted in unplanned costs to the

Department totalling $4.2 million.” There are several examples noted here, yet

when I read through the report, most of what those extra costs and those

downtimes seem to be alluding to are issues with the training and issues with

human causes as opposed to design flaws.

So I

would ask you if the significant downtime for these two ferries, in that period

of time, was due, not to design flaws but rather to issues with human flaws or

training, whatever you want to call it. Because clearly the Auditor General

seems to point that out.

T. KING:

Thanks, MHA Wakeham.

Just a

couple of points on the amount of time out of service. I think the Auditor

General counts the – I know she counts the time out of service that the

Legionnaire was at dockside at

Lewisporte. That had nothing to do with the vessel and any of its operations. So

I think when you back out those days from what's listed as out of service for

the Legionnaire , you find that the

Legionnaire was out of service, I

think, closer to 15 per cent of the time rather than the large amount of time

that this points to.

So I

just want to point to that, that we really did learn a lot of lessons from the

Veteran . It was before me, but we

learned a lot of lessons from the Veteran

that certainly moved over to the

Legionnaire and it wasn't out of service with the same magnitude of time.

I don't

know about design issues, I can't comment, I wasn't there, and I don't know if

you looked at – Mr. Meade talked this morning about ensuring that the

Legionnaire could use the wharf

infrastructure, what would be required and looking at that kind of fit for

purpose, which would've happened in the very early days. I can't speak to any of

that.

I think

the Auditor General's report does point to some human error and training

deficiencies in some folks, but I don't think – just to be clear – that it was –

you can't point and see that the training was totally ineffective or that these

vessels couldn't operate. There are some specific issues that were caused by

human error that required adjustment, but I don't feel like I can say that I

felt when I went to the department or the time that I was there that I didn't

feel like these crews were equipped or safe to manage these vessels.

CHAIR:

No, and that wasn't my

point. My point was about the fact that the vessels, as you alluded to earlier,

were delivered on time, on budget. Earlier, Mr. Meade talked about having full

confidence in the commitment, in the process. So when we look at, though, the

amount of downtime, whether it's 30 days or 50 days, at the end of the day, the

downtime here seems to be related, not to the design of the vessel but rather to

the operation part of the vessel. Is that a fair statement?

T. KING:

Maybe. I think the thruster issues, especially thruster issue one and two – and

I wasn't there for them, I was there for thruster issue three and the engine

failure, which was human error – more training is always better. I would

certainly say that the more time you can devote to training, the better for you

and your team. So I don't know that I have enough information to answer your

question.

CHAIR:

No, that's fair. Again,

tomorrow we'll have an opportunity to speak to the deputy minister who was there

prior to you. Because there are significant issues here on that whole training

piece and we're just trying to understand.

Because

I think my colleague alluded to it earlier, at the end of the day, as we advance

in this hearing and speak to current DMs, we'll want to be reassured that this

type of training and the challenges with training, that everybody has made

improvements to it. So as we continue to purchase or to do projects, we

certainly have some of this covered off. That becomes part of the challenge

here, ensuring that piece of work that gets done – there are questions here that

obviously happened before your time so it is not fair for me to ask you when you

weren't there.

there any general comment that you would like to make on the whole process? In

terms of, as my colleague alluded to, your time there, it would appear that the

staff, I give them full credit, I think they work hard – I know they work hard

in that department. I always say everybody comes to work to do a good job;

sometimes we don't give them the tools to do it. I think that is critically

important, so if there is anything you would add that would help us as a

Committee.

T. KING:

Thank you, MHA Wakeham.

I would

say that I found this time period, while I was at the department – I loved my

time there, it was a time of real – there was a lot of change going on. We were

really moving into P3 procurement, that ball had been rolling for a bit of time

by the time I got there. We were bringing in new ways from our P3 learnings; we

were starting specific steering Committees on individual infrastructure projects

of a higher-dollar value. There was so much change happening and we didn't

really talk about the risk transfer and risk management here but it really

became – I noticed a huge change from the time I went to the department, about

how much and how we talked about risk, to the end.

I would

just say that Marine Services is a challenging, complex environment. You're in

the water; you have staff all over the province. It is a hard thing every day to

ensure that everyone has everything they need to operate the vessels. You always

want to try and move the bar further ahead than when you got there. I think that

is what everybody was trying to do throughout.

Given

the competition, I think, for people with these highly valued skills, I mean,

we're very fortunate to have these captains and these crews with high-skill

levels and high certificates doing this work. You really wish you could do more

all the time to support them and to ensure that they have every possible

opportunity you can give them. I think that's incumbent on any deputy, on any

executive, to try and make sure your staff have the skills and the training they

need to do their work every day. I think everybody does their best to do that.

there room to learn and do better? Sure. I think in Marine it's just very – it's

complex to try and manage, continuing to operate the service, ensuring you have

enough staff to do that and ensure they're getting every opportunity that you

can use.

I think

that's what I would say. I think the department has really grown over time, as

every department should, and this is one area, certainly, where, as or if new

vessels are procured, people can really learn, I think, from the comments this

morning of Mr. Meade about the importance of putting that project team in place

very early in the procurement process.

CHAIR:

Thank you so much.

Thank

you for your time. Thank you for coming and good luck the rest of the way in

your new role.

T. KING:

Not so new anymore.

Thanks

so much for the opportunity to come.

Recess

CHAIR:

Okay, good day again. We're

now joined by Mr. Weldon Moores – hello, Weldon – who was the ADM, assistant

deputy minister, with Transportation from 2011-2013.

And

just for some housekeeping remarks, I remind participants that this is a public

meeting and their testimony will be part of the public record. We have a live

audio being streamed on the House of Assembly website, and

Hansard will also be available on the

House of Assembly website once it's finalized.

Witnesses appearing before a Standing Committee of the House of Assembly are

entitled to the same rights granted to Members of the House of Assembly

respecting parliamentary privilege. Witnesses may speak freely and what you say

in any parliamentary proceeding may not be used against you in civil

proceedings.

I will

ask the Clerk to administer an oath or an affirmation. Also, I would ask you if

you would make an opening statement and, when you do, if you would briefly tell

us a little bit about your background on this particular file that would help us

through our questions.

Swearing of Witnesses

Mr.

Weldon Moores.

CHAIR:

Okay. Would you like to have

an opening comment, or you could maybe just give us a brief of what you were

involved in when it comes to the purchase of these two vessels?

W. MOORES:

Okay. I didn't have a lot to do with it, really. I was the acting ADM in Marine,

because I was also the ADM in Strategic and Corporate Services. When the clerk

asked me to fill in, I guess it was initially going to be for a relatively short

period, expected to be four to six months, and it obviously dragged on a bit

longer.

Much of

the involvement on the new vessels, because where it was an acting role, was

done by the deputy and I was more involved with the operations of the existing

fleet.

CHAIR:

We'll start with some

questions from Scott at the end.

S. REID:

So I've been asking some sort of standard questions related to duty to document

and the training related to the people (inaudible) the vessels, but I think in

terms of the time you were in the department, you are one of the earliest that

we're going to be talking to.

W. MOORES:

That's right.

S. REID:

I want to take the

opportunity to ask a few different types of questions. I guess I'm interested in

the whole start of the idea that we were going get new ferries. It started off

initially one and then we moved to having two vessels. So I'm just sort of

wondering, what was the rationale and what was the situation as the government

started to think about getting those vessels? What was the thought process or

the things that the department was considering as they moved into those initial

steps of that?

W. MOORES:

I guess it's fair to say the

age of the department fleet played a large role. I believe it was – I can't

remember the name of the previous vessel, but the vessel was quite old that was

running to Fogo. So Fogo definitely needed a new vessel. Once the ferries get so

old, the maintenance cost it becomes – it's just like a car. After so long, it

breaks down, breaks down frequently and needs to be replaced.

Volume-wise, the Bell Island and Fogo Island ferries are the highest volume of

the Island ferry service, not including Labrador. Labrador is a different

situation. Even the other vessels were getting up in age. Now, some vessels are

operated on a contract and the private sector replaces them from time to time.

We own so many vessels. We do some by contract.

S. REID:

So it started off with just one vessel for the Fogo run.

W. MOORES:

No, I wouldn't say that because at one time, we even looked at purchasing five

smaller vessels for our existing fleet and that never came to pass.

S. REID:

Oh, okay.

you're looking at various options at the beginning. The department and

government, I guess, chose to go with – the first one would be the Fogo run.

Then a decision was made later to add the one for Bell Island or –

W. MOORES:

I wasn't involved in that so

I can't speak to – obviously, it was made later, but I had no involvement with

it.

S. REID:

Okay, so you weren't there

at that time.

terms of the management while in this planning process for these vessels and the

early stages, how often did the committee meet and how often did they meet with

the deputy minister? In the document, there's some sort of talk that the

committee or the project team didn't meet that often.

W. MOORES:

I wasn't part of the project

team, so I can't speak to that. However, from time to time, I would – I mean,

obviously being a member of the executive, it would come up in executive

meetings, so I knew what was going on from a general sense.

S. REID:

Yeah, okay.

So in

terms of the preparation of the contracts and the execution of the projects,

were you involved in any of that process?

W. MOORES:

No. I mean, I know initially

we looked at having them built in Marystown –

S. REID:

Yeah.

W. MOORES:

– and just could not get a sensible price from the people in Marystown, so the

decision was made to go wide.

S. REID:

Yeah.

I'm

just wondering, is there any sort of recommendations or advice you would have

for the department going forward in terms of things that you've seen or

experienced while you were there? Is there anything, in terms of future

operations and the way they manage these types of projects, is there any advice

that you would offer people –?

W. MOORES:

I wasn't close enough to –

if you're talking specifically the vessel purchase. I mean, I read the AG's

report and I have no problem with anything that was said there.

S. REID:

Yeah, okay.

Outside

the contracting and that, anything in the overall report that you would like to

comment on?

W. MOORES:

I think the staffing of vessels is one thing that people may not necessarily

understand. There are minimum crew sizes that are mandated by Transport Canada.

The only way you can get lower costs in the ferries is to have smaller vessels.

If you have smaller vessels, you can't necessarily meet the demand. That will

work in some of the other routes. I know we downsized the vessel, for instance,

going to Petite Forte, based on – you have to take into account the population

you are serving and the number of trips.

Excepting Labrador, Fogo and Bell Island, there is extremely low usage on the

ferries. It is not uncommon for a vessel to go with one or two vehicles,

passengers, whatever. It is very difficult to operate it on a cost-efficiency

basis. I know we had consultants look at it. I can't remember the year, but I

guess it was first when the Williams government came in. They said, well, you

should do it on cost recovery. They were a little astounded to find out that

basically for every dollar that is spent on the ferries, the revenue that comes

in is about nine cents.

S. REID:

You mentioned that the

province was thinking about getting five new ferries at one point. You mentioned

some of the other options, like contracting out and things like that. I am just

wondering, based on your experience and what you have seen, and given this

report about the problems that exist sometimes when you try to buy new ferries

and the possibilities of doing it in the province seem to be difficult, I'm just

wondering do you think privatization is a better option than the government

purchasing and owning the new ferries?

W. MOORES:

I'm not sure if

privatization can work. If you look – government is not inefficient in the way

it operates, it's more the environment it has to operate in. If it's costing a

dollar to run a ferry and you're getting nine cents back, I don't see how the

private sector can make a go of it in that manner –

S. REID:

Okay.

W. MOORES:

– if you're talking privatization across the board.

S. REID:

When I say privatization, I'm sort of thinking of contracting it out the way

some services are done.

W. MOORES:

Well, I think you have to have a hybrid, as we have now, because there are also

collective agreement considerations.

S. REID:

Yeah.

W. MOORES:

You can't just suddenly contract out, for instance, the Bell Island ferry

without consideration of NAPE's rights there as well.

S. REID:

Okay. Thank you very much.

CHAIR:

Jordan.

J. BROWN:

Thank you, Mr. Moores.

I know

you said that your time in there was – you were in there to fill in for what you

thought was a short period but turned into a long period. In your time, the

department went and spoke with Marystown about building a new ferry and the cost

was quite high. When did the department go overseas to look for a builder?

W. MOORES:

I've been retired nine years, so I can't remember the dates exactly.

J. BROWN:

No, the year.

W. MOORES:

I don't recall, really. I'd have to, basically, refer to the AG's report.

J. BROWN:

Okay.

Do you

remember if Damen came to us or did we go to Damen to put in a bid?

W. MOORES:

I don't know. I thought it was the result of a public call.

J. BROWN:

Okay, so they came to us

when they saw the public call.

In your

time there, do you remember any parts of when the contract was being drawn up?

Was that being done during any period of your rime there?

W. MOORES:

It may have been. I wasn't involved.

J. BROWN:

He wasn't involved.

Do you

know if anyone in the department or anyone at your time there was aware that

there would be an import tariff if they did go abroad?

W. MOORES:

I can't speak to it.

J. BROWN:

Can't speak to it. No worries.

I'll

pass to my colleague there.

L. STOYLES:

Thank you, Mr. Moores.

Thank

you for your time and thank you very much for coming today.

I was

thinking you were going to have a little bit more information for us. This

obviously must have been a very exciting time for the department and for the

province. We're getting two new ferries – getting one new ferry and then shortly

after that, the announcement of a second ferry. There must have been in the

department a lot of discussion and, as you say, you weren't directly involved in

a lot of discussions with the vessels.

Some of

the questions I had for you are like in the very beginning, what kind of

discussion – so were there any discussions with you and some of the staff on

planning, once the vessels came, getting ready for when they arrived after they

were built? Was there any talk about that in the beginning stages or would you

know that?

W. MOORES:

Again, from being in the executive meetings I know that there were discussions

that any new vessel that we got would likely mean that the dock in Fogo had to

be reconstructed. So that would've been done through the ADM on the

Transportation side, the same ADM that would look after roads. They would take

care of the wharf construction because it would be done either through the

bridge office or it would be tendered at that side of the department.

L. STOYLES:

So you weren't involved in

any discussions with the deputy minister or the staff or with anybody to talk

about preparing for the vessels once we received them. The biggest plan was

getting ready, getting the contract out and knowing that they were going to be

done and getting the criteria in place for that.

One of

the things that was interesting that you mentioned, that nine cents on every

dollar was all you could recoup. I served on city council for 25 years and I

know you don't make money on swimming pools and a lot of recreation facilities,

arenas and stuff like that, because it always costs the city or town money not

really to build them, but to operate them at the end of the day.

So you

really didn't have a whole lot of input into the department when it came to the

ferries?

W. MOORES:

Not the new vessels. I mean,

where I was in the acting role, it was more keeping the existing ones going. At

that time, government was looking to cut costs as much as it could. You

couldn't, say, across the board, take a percentage and take it off because our

staffing was mandated through Transport Canada. So if the department was going

to take, say, a 5 per cent cut, Marine couldn't necessarily be part of that

because we were at the minimum staffing volumes already for much of our crew

sizes.

L. STOYLES:

So was there anything

involved with the vessels – when you were in the department, did you actually

sit on any of the committees or have any input at all with the staff going to

Romania?

W. MOORES:

No.

L. STOYLES:

Because from reading the

reports, the project manager, when they hired somebody, we had some issues and

that, you didn't sit at the table with any of those discussions or anything

related to the –?

W. MOORES:

No, I didn't.

L. STOYLES:

You didn't, okay.

I don't

have any further questions.

S. GAMBIN-WALSH:

I just have one question,

actually.

Thank

you for your time.

So, Mr.

Moores, it was nine years ago at that time?

W. MOORES:

Yes.

S. GAMBIN-WALSH:

Can you recall from being

involved with the executive meetings any discussion that was had around how the

department was going to estimate the cost of these vessels?

W. MOORES:

I did sit in on some

meetings when the people from Marystown gave us estimates of what the vessel

would cost.

S. GAMBIN-WALSH:

Okay.

W. MOORES:

And I know if you referenced

it to the previous two vessels that were built in Marystown, the price of one

vessel was going to be more than the cost of the two previous ones.

S. GAMBIN-WALSH:

Okay.

W. MOORES:

So that was one place an

order of magnitude was available. And I seem to recall that the deputy had asked

the director on the Marine side to check with some consultants who did ferry

designs to give order of magnitude costs for vessels of that size. It wasn't a

shock on the price of the vessels. Any time you go to tender for something – if

you do it on roads, Transportation uses its own in-house staff to estimate the

costs and they come in really good.

Prior

to being ADM of Strategic and Corporate Services and also acting ADM in Marine,

I was ADM of Works, so I was on the building side. In that case, we generally

used consultants to come up with an estimated cost and that, combined with our

own staff, because we had experience doing the project management on buildings,

gives us a cost estimate.

I know

– that's going back 15-16 years ago – the costs of buildings, the consultants

couldn't come up with an accurate figure. We were getting a lot of surprises in

that area. We did some work through our in-house policy division and found that

our building costs were rising similar to what Alberta's had about five years

previous. So whenever we got a consultant's report in, we tempered it with some

of our own knowledge and still the costs of buildings were really hard to

estimate.

S. GAMBIN-WALSH:

Okay.

Thank

you very much. That is all for me.

W. MOORES:

Okay.

CHAIR:

Just a few questions from

me.

So you

were there from 2011-2013. When did you take on the acting role in Marine

Services? Was it at that time?

W. MOORES:

Yeah, I was already ADM of Strategic and Corporate Services and the person who

was the ADM of Marine, for some reason which I don't know, was told his services

were no longer required and the Clerk called me over and said we'd like you to

fill in on an acting basis as ADM of Marine until we refill the position.

CHAIR:

So were you still acting

when you left?

W. MOORES:

No, they hired a new ADM of Marine in January.

CHAIR:

Of 2013?

W. MOORES:

Yes, and I retired February 22, 2013.

CHAIR:

Okay.

W. MOORES:

So I had three weeks of freedom.

CHAIR:

Right.

The RFP

to go out for two ferries was actually issued in January, I think, of 2013. But

you have mentioned that prior to that the department had sought at least a price

inquiry from the Marystown Shipyard to build those ferries. Is that correct?

W. MOORES:

Yeah, I think government's position was, initially, that they would be built at

Marystown. I know from being in on executive meetings that basically we went to

Marystown and just couldn't get a reasonable price. The department keeps

changing names, but industry, trade and whatever were involved, too, because

there's an economic benefit that had to be looked at.

You may

have been able to get a vessel cheaper on the free market than Marystown, and

there is a certain premium government would be willing to pay to go to

Marystown, if it was to benefit the province as a whole. They were out of the

ballpark. They just couldn't come in with a – I think the problem is the people

who were operating Marystown at that time weren't really vessel builders. They

were offshore supply, offshore contractors and they didn't necessarily want to

build the ferry. If you're asked for a price and you don't want to do it – well

I'll do it, but you'll pay. And I think that was the position we were in.

CHAIR:

Suffice to say that the

price that you were being quoted for Marystown build was sufficiently larger

than what you wound up going to RFP for.

W. MOORES:

It was larger than we were willing to pay.

CHAIR:

Yeah. Okay.

You

mentioned that as the acting ADM you were not directly involved in the process –

in the RFP process – with these vessels. Who would have been responsible at that

time? Was it the deputy minister?

W. MOORES:

The deputy and there was a group of people on the Marine side as well.

CHAIR:

Okay. So the deputy minister

was who?

W. MOORES:

Jamie Chippett at that time.

CHAIR:

Okay.

W. MOORES:

And the director was Tom

Prim.

CHAIR:

Tom Prim. Okay.

So they

would have been the ones that were more actively involved in moving the RFP

forward, so to speak.

W. MOORES:

Yes.

CHAIR:

You would have been there as

part of the executive team, so to speak.

W. MOORES:

No.

CHAIR:

Okay.

So that

clarifies it a little bit. It gives us an idea that you did consider an option,

Marystown, but it turned out to be just extremely high and that the RFP was

issued in January, as you said, and you retired shortly after that.

W. MOORES:

Yes.

CHAIR:

Thank you very much for

coming here today. I hope retirement is treating you well.

W. MOORES:

So far.

CHAIR:

Thank you so much for coming

in. I really appreciate it.

W. MOORES:

Okay. It doesn't feel like –

CHAIR:

Oh, do you have anything

else to add? I should say that. We give everybody an opportunity, if there's

anything you would like to add to help us, as a Committee, with our

deliberations and some of the recommendations you would have as somebody who's

worked in the industry.

W. MOORES:

I guess the one thing is

vessels aren't like buying a new car. They don't exist on a lot somewhere. In

the past, government has bought used ferries; some have worked out well, some

have not worked out well. You need a lot of information going into the purchase

of a new vessel, whether it's a new or used vessel. They're not easy to come by.

CHAIR:

Well, thanks again for being

here. I appreciate it.

W. MOORES:

Okay, thank you.

Recess

CHAIR:

(Inaudible) 2013 to 2016.

Welcome, Mr. Harvey.

Can you

hear me okay?

M. HARVEY:

Loud and clear, thank you.

CHAIR:

Perfect.

remind all of our participants that this is a public meeting and their testimony

will be part of the public record. Live audio is being streamed on the House of

Assembly website at assembly.nl.ca and an archive will be available following

the meeting.

All

witnesses appearing before a Standing Committee of the House of Assembly are

entitled to the same rights granted to Members of the House of Assembly

respecting parliamentary privilege. Witnesses may speak freely. What you say in

this parliamentary proceeding may not be used against you in civil proceedings.

Mr.

Harvey I understand that you may have the affirmation in front of you?

M. HARVEY:

I had it. I thought I was

going to repeat it.

CHAIR:

I can have Kim read it out

and you can just affirm to it.

M. HARVEY:

Okay.

CHAIR:

Okay, perfect.

Swearing of Witnesses

Mr. Max

Harvey.

CHAIR:

Okay, wonderful.

Mr.

Harvey, we've been asking people if they'd like to make some opening remarks. In

your opening remarks, if you could provide us with some ideas around what

exactly you were involved in during your time there, in relation to the

acquisition of the two ferries we're talking about, that would be fantastic.

M. HARVEY:

Thank you.

First

of all, let me thank the Committee for the opportunity to speak before you. I

will say as a start that the technical issues experienced by the vessels were a

major problem. It disrupted services, there were unexpected costs and in some

ways, it was disappointing. But I will also say that they are very fine ships,

built by a world-class shipbuilder. Despite the growing pains, the setbacks and

a tough introduction, they will serve this province for a long time.

There

were lots of lessons learned. One of the biggest lessons that I learned through

this, in my three years as ADM, was of the fantastic and courageous work of

Transportation and the marine teams and crews. I stand by that and I'm very

proud to have been part of that team. That's why I'm here today.

joined TW late January 2013. I think the position was vacant for 10 months prior

to me being there. It was filled, I think, by Mr. Moores at the time. I was

asked by the deputy minister at the time to come have a chat with him, I had a

chat; there was an interview process and a selection. That's how I got to be the

ADM. I think I was selected for my leadership. Obviously, I had spent 30 years

in the navy as a senior officer. I had been doing project management across the

nation for the navy. I was a senior elections official for Elections Canada for

the whole territory, community leader, director and president of a bunch of

groups.

I also

had a lot of marine knowledge. I've served on ships of all classes, submarines.

I have command qualification to be a captain, a commanding officer of any of the

surface vessels in the Canadian Navy. I was a senior department head for the

building of 12 Maritime Coastal Defence Vessels. That was over a billion

dollars. That was in the mid- to late '90s, a billion-dollar project; 12 ships

that were built over a three- or four-year span.

I also

like to think that I brought a lot of character because I am very

people-oriented. I am very collaborative; I'm consultative on that. I think

perhaps one of the most important things that motivated me to be part of Marine

and part of TW was that I understood ferry issues. I'm from Newfoundland. I

lived on Bell Island. I knew what it was like to spend four hours in a lineup

and loud children crying and people missing funerals and birthday parties, and

not knowing what was going on. I lived it, I heard it, I felt it and I thought

that would bring a lot more to the mandate.

During

my time there, for context, I served for two governments, four premiers, five

ministers and I think three deputy ministers. I also worked with seven MHAs that

had ferries on the route, and dozens of high-profile stakeholders, as you can

imagine: the mayors, the ferry committees, the users, the public and the

Open Line .

In October 2016, three years and nine months later, I was replaced. I was no

longer serving at the pleasure, and with a number of other ADMs from across the

government, I was replaced. There was no turnover; there was no opportunity or

request that I do a turnover. The new ADM was in place the next week or so.

I will

also add that I was the acting or interim ADM of Transportation, the roads

section. I filled in on the retirement of one of the other ADMS and I was there,

I thought a short time – I was there 10 months – before that position was

filled.

We had

lots of issues on the ADM roads side. Salt was a huge – and procurement and cost

of salt; airstrips in Fogo. I helped introduce, lead the five-year plan for

early tenders. The Labrador tunnel was a project that we were leading, the

Trans-Labrador Highway: all those asphalt issues and complaints. That was in

addition to my Marine Services role that I had, which I hope to give some

context later.

timeline goes, I arrived just after the RFP was issued. I was replaced before

the first year of service of the Veteran ,

so it had been in service about 10 months. I think it was in the first three or

four months that they had the two – first couple of months of operation that

they had the thruster issues. I was relieved just after the

Legionnaire arrived. That was about

10 months before the Legionnaire

entered service on the Bell Island run, pending the delayed wharf upgrade.

terms of the Project Management Body of Knowledge, the PMBOK, and the Marine

Project Management Manual, on the PMBOK, I was in stage three of five when I

arrived and for the MPMM, I was in stage four of six. They're just basic stages.

A lot of water had passed under the bridge when I had gotten there.

I would like, as part of my

opening statement, to make a comment about the Auditor General's report. I

certainly do not intend to nitpick or challenge or go down the rabbit holes on

some of the points, because some of the points were very valid and some of the

points were very important. I would say there are a number of points that were

questionable and worthy of challenge – and good challenge – and some things that

whether from lack of information or lack of follow-up, to my view, my

perspective, were wrong. But I'm here in the interest of public administration.

To that end, I hope to give frank insight

and perspective of

what was going on to make some of these things happen.

I'll

just close by saying I have four areas that I hope I get an opportunity to speak

to, and that is the TW mandate and how we fit in the project TW family, the

Marine Services context, which is really the treadmill, and I can give a lot of

talk about that and how that related to the new ships. I'd like to also talk and

I'm sure I will get an opportunity about project management.

I would

also like to talk about root causes. While the Auditor General's report said you

needed better project management, and oh, by the way, if there are mechanical

issues, you really need to get to them earlier and, yeah, more collaboration

with IRBs, I would like to offer, what I consider, systemic or root cause

observations about where we got to where we were. I would echo what was said

before; some pretty incredible work was done.

The

report did not cover some of that incredible work, it did not cover some of the

challenges and it really didn't talk a lot about some of the way ahead and some

of those root causes that could really make a material and substantive

difference going forward.

In that

context, I accept the report. As I said, I take some exception. I read in the

paper it was bungled, and that was the kind of the tone of the report. I would

just like to at least give my perspective on some of those activiti