Item - 2024.GG14.8

The General Manager, Parks, Forestry and Recreation and Chief Procurement Officer recommend that:

1. This report be received for information.    

The City of Toronto provides year-round ferry services for residents, passengers and vehicles traveling to and from Toronto Island. Due to the aging ferry fleet, City Council directed Parks, Forestry and Recreation to advance the Ferry Fleet Replacement Strategy, beginning with the construction of two new, fully electric ferry vessels: a new passenger and vehicle vessel and new passenger vessel.

The delivery of the two new vessels will increase the City's ferry capacity by over 400 passengers per trip for the passenger and vehicle vessel and nearly 1,000 passengers per trip for the passenger vessel. Delivery of the new vessels will also enhance the passenger experience with contemporary ferry designs and amenities, reduce anticipated repair costs of the current fleet, and significantly reduce greenhouse gas emissions as the ferry fleet transitions from diesel to electric.

City Council initiated the Ferry Fleet Replacement Strategy with preliminary funding allocated in 2015. During the course of the design process, in 2022, City Council established the objective of constructing fully electric vessels (rather than hybrid diesel-electric vessels). The recommended design responds to this direction and input received through community engagement.

Delivery of the new vessels is targeted to occur in the fall of 2026 and spring of 2027.

The purpose of this report is to advise on the status of the Negotiated Request for Proposals for the construction, delivery, commissioning, and warranty of two new fully electric ferry vessels, and the intention of staff to continue negotiations with the preferred proponent. A supplemental report, with full details on the recommended contract award, delivery schedule and financial impact, will be submitted to General Government Committee for its meeting of July 2, 2024.

Consideration of this report at July 2024 City Council is essential to preserve the current planned delivery schedule for the new vessels.

There is currently no financial impact from the recommendation in this report.  Full discussion of financial implications will be addressed in the anticipated supplemental report.

The General Manager, Parks, Forestry and Recreation and Chief Procurement Officer recommend that:

1. City Council authorize the General Manager, Parks, Forestry and Recreation to negotiate and enter into an agreement, and any ancillary or related agreements as necessary, with Damen Shipbuilding 5 B.V (Damen Shipbuilding), being the top-ranked supplier meeting the requirements outlined in the Negotiated Request for Proposals (nRFP) Doc4053424337 for the provision of construction, delivery, commissioning and warranty of two new fully electric ferry vessels (RoPax and Pax Vessels), for a fixed period of four and a half years from the date of award, in accordance with the terms and conditions as are satisfactory to the General Manager, Parks, Forestry and Recreation and the Chief Procurement Officer, and all in a form satisfactory to the City Solicitor, subject to approval of additional funds for the Ferry Fleet Replacement Capital Project in Parks, Forestry and Recreation's 2024 Capital Budget and 2025-2033 Capital Plan.

The City of Toronto provides year-round ferry services for residents, passengers and vehicles traveling to and from Toronto Island. Due to the aging ferry fleet, City Council initiated the Ferry Fleet Replacement Strategy with preliminary funding allocated in 2015, and directed Parks, Forestry and Recreation (PFR) to advance the strategy beginning with the construction of two new vessels. During the design process, in 2022, City Council established the objective of constructing fully electric vessels (rather than hybrid diesel-electric vessels).

The purpose of this report is to advise on the results of the Negotiated Request for Proposals Doc4053424337 for the provision of construction, delivery, commissioning and warranty of two new fully electric ferry vessels, and to seek authority for the General Manager, Parks, Forestry and Recreation to negotiate and enter into an agreement, and any ancillary or related agreements, with Damen Shipbuilding 5 B.V (Damen Shipbuilding) for a fixed period of four and a half (4.5) years from the date of award.

This Negotiated Request for Proposals was developed strategically to source two electric propulsion ferry vessels - one RoPax Vessel (vehicle and passenger vessel) and one Pax Vessel (solely passenger vessel) - by PFR and Purchasing and Materials Management Division's Category Management and Strategic Sourcing team and identified Damen Shipbuilding, a shipbuilder with significant Canadian and international industry expertise.

Damen Shipyards Galati (Romania) will be the location for construction. Delivery of the vessels is targeted to occur in the Q4 2026 (RoPax) and Q2 2027 (Pax). The new vessels will increase the City's ferry capacity by over 400 passengers per trip for the RoPax (a 195% increase) and nearly 1,000 passengers per trip for the Pax (a 321% increase). The new vessels will significantly enhance passenger experience with contemporary ferry designs and amenities, reduce expected repair costs of the current fleet, and significantly reduce greenhouse gas emissions as the ferry fleet transitions from diesel to full electric propulsion.

Consideration of this report at July 2024 City Council is essential to preserve the current planned delivery schedule for the new vessels. The agreement is subject to City Council's approval of additional funds for the Ferry Fleet Replacement Capital Project in Parks, Forestry and Recreation's 2024 Capital Budget and 2025-2033 Capital Plan.

The total potential contract award amount including contingency allowance is $90,569,194 net of all applicable taxes and charges ($102,343,189 including Harmonized Sales Tax and all other charges $92,163,212 net of Harmonized Sales Tax Recoveries).

Funding in the amount of $81,820,480 is included in the 2024 Capital Budget and 2025-2033 Capital Plan for Parks, Forestry and Recreation for Ferry Fleet Replacement. Additional funds of $10,342,732, funded by Development Charges, will be added to the project through a budget adjustment that will be brought to City Council through the Capital Variance Report for the Four Months Ended April 30, 2024. Both the Capital Variance Report and this staff report will be before Council at the July 24-26, 2024 meeting. The amended 2024 Capital Budget and 2025-2033 Capital Plan for the Ferry Fleet Replacement project for Parks, Forestry and Recreation is summarized in Table 1 below.

Table 1: Financial Impact Summary (net of Harmonized Sales Tax Recoveries)

Any operational impacts of capital of the new ferry fleet will be included in future operating budget submissions for consideration.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as presented in the Financial Impact section.