Thoughts and Opinions On Today's Important Issues

Tuesday, May 12, 2009

BREAKINGBLOGNEWS: Auditor General Says Federal Bridges Are Deficient

And someone truly believes that the Feds should have responsibility for a new crossing in Windsor/Detroit. You cannot do so after reading this.

Perhaps the Auditor General should have suggested that the Government people be taught how to operate a bridge by the Ambassador Bridge Company. They seem to know what they are doing.

Now when is she going to audit DRIC and how Transport Canada has handled the border file and the waste of money! Minister Baird should be ashamed he made the speech he did in Windsor. His staff let him down, again!

Note the highlighted sections. It will make you cringe to think of what they would do here. Sean O'Dell needs to read the truck traffic section too.

The Federal Bridge Corporation Limited

What we examined

Federal Bridge Corporation Limited (FBCL or the Corporation) is a Crown corporation responsible for three important bridges and other infrastructure in the Montréal area. It is also responsible for three international bridges in Ontario. These assets are operated by its three subsidiary corporations: Jacques Cartier and Champlain Bridges Incorporated, in Montréal; Seaway International Bridge Corporation, Ltd. in Cornwall; and St. Mary’s River Bridge Company in Sault Ste. Marie, and by two US bridge operators.

Federal Bridge Corporation Limited is responsible for ensuring that the bridges and structures in its care and control are safe and efficient for users. FBCL and its subsidiaries employ more than 150 people. The Corporation reports to Parliament through the Minister of Transport, Infrastructure and Communities.

We examined whether Federal Bridge Corporation Limited and its subsidiaries have systems and practices in place to provide the Corporation with reasonable assurance that assets are safeguarded and controlled, resources are managed economically and efficiently, and operations are carried out effectively. Our detailed examination work in both the parent corporation and the subsidiaries focused on the areas of corporate governance, bridge management, corporate risk management, strategic planning, performance measurement and reporting, consultations with First Nations, contracting, and environmental management.

Why it’s important

Federal Bridge Corporation Limited and its subsidiaries own and manage some of the most important and strategic fixed-link crossings in Canada. Each year, about 134 million vehicles and about $67 billion worth of merchandise cross its bridges, making them among the busiest in North America. These structures play a vital role in connecting Canada’s transportation and economic network with the world.

Recent tragic events in North America involving aging bridge structures have focused public attention on bridge safety. Federal Bridge Corporation Limited and its subsidiaries face the significant challenges of strains on its own aging structures, the introduction of new safety and security requirements for bridges and international crossings, and the impact of declining commercial traffic volumes on bridge revenues.

What we found

We identified two significant deficiencies in the systems and practices we examined.

Unresolved funding requirements and a threat to financial sustainability.

We found a significant deficiency in the Corporation’s ability to maintain and repair existing bridges and facilities, given the status of current funding. Significant capital investments are needed at several bridges in the Montréal area and at international bridges. FBCL estimates costs to maintain and repair existing bridges and facilities at $615 million over the next five years. FBCL estimates that it will lack about $371million in revenues to cover these costs and other operating expenses over the next five years. Because FBCL and its subsidiaries do not have borrowing authority, federal funding will be needed for the repairs. If the repair programs do not proceed in a timely manner, the ability to safeguard the bridges and maintain current levels of service could be compromised and could increase the safety risk. At the same time, the Corporation foresees a threat to its financial sustainability as a result of decreased truck traffic and toll revenues at the international bridges. FBCL needs to work with the government to resolve these funding requirements and find additional revenue sources in order to remain financially self-sustaining in the long term.

Insufficient oversight by the parent Board.

We found a significant deficiency in the area of corporate governance, in that the parent corporation’s Board has not exercised its oversight role with respect to the affairs of FBCL and its subsidiaries. The Board of FBCL has not obtained from management of both the parent and the subsidiaries all the information it needs on a timely and regular basis to carry out effective oversight. The small size of the parent corporation’s Board—only four members—makes it difficult to have the appropriate mix of skills and experience needed to properly oversee the wide-ranging affairs of FBCL and its subsidiaries. In addition, FBCL was without a permanent chief executive officer for more than a year.

In other systems and practices we examined, we found no significant deficiencies but noted another area that needs improvement.

While key elements of a bridge management system are in place, and inspection practices are industry-accepted, Federal Bridge Corporation Limited needs to develop a corporate-wide long-term maintenance plan for dealing proactively with the aging of bridges and other facilities across the Corporation. It also needs to take a broader approach to risk management that considers all significant risks to all the structures operated by its subsidiaries and bridge operators.

Federal Bridge Corporation Limited and its Board have responded. The Corporation and the Board agree with our recommendations. Their responses follow each recommendation in the report.