Monday, June 26, 2006


Why did CP Rail stop bidding for BC Rail?

Another look back at Hansard debates: Leader of the Opposition questioning the new Minister of Transportation, four months after the police raids.

J. MacPhail: The Minister of Finance is on record in his estimates saying that he called the failed bidders after this process finished. He was on record telling me that he called Omnitrax, a failed bidder. Then he had dinner with them after, too, because Omnitrax wasn't satisfied with the private telephone call. They actually wanted to have a private dinner.

           The minister must have called or someone in government must have called CP Rail, as well, if the Minister of Finance said it was government's practice to call the failed bidders. It was a brand-new practice to me, but hey, what do I know?

           If the Minister of Finance's word about Omnitrax holds true — that the government contacted the failed bidders — surely someone must have talked to CP Rail. CP Rail only pulled out days before the bidding process concluded, and CP Rail let it be known that they were dissatisfied with the fairness of the bid. Who called CP Rail?

            Hon. K. Falcon: I believe Minister Collins [former Finance Minister Gary Collins] — and you would have to confirm independently with him — did call CPR, as I believe he did call all the bidders that had been unsuccessful. My understanding is that the purpose of those phone calls was, essentially, to extend appreciation for the efforts, time and money they had invested in the process and to let them know the government appreciated the fact they'd invested the time, money and resources.

            J. MacPhail: Yeah, I'm not quite sure…. I think that's probably a first. I don't think there has ever been another minister in history, depending on political stripe, that has done that — ever.

           We're assuming it's good business if all of the bidders were treated fairly. The minister says: "Oh, it's good business." We have no idea whether the bidders were treated fairly. What we do know is that Omnitrax was the only one that got a private dinner with the Minister of Finance after he made that phone call to them. He made the phone call, and then they wanted a private dinner with him, and he gave it to them. No staff, no bureaucrats — just Omnitrax and the Minister of Finance. There was also a bidding process going on for the rail spur out to Roberts Bank during that period of time as well.

           Is the minister suggesting that yes, CPR was called, but he doesn't know the nature of the conversation? Or is he saying I should ask or the media should ask the Minister of Finance whether he called CP Rail or not? We know he didn't have a private dinner with CP Rail the way he did with Omnitrax.

            Hon. K. Falcon: Yes, as I explained to the member, the Minister of Finance did make those phone calls. The phone calls were made in the spirit of thanking them for their involvement in the process.

            J. MacPhail: So what did CPR say to the Minister of Finance?

            Hon. K. Falcon: You'd have to ask the Minister of Finance. I haven't got the slightest clue.

            J. MacPhail: If the Minister of Finance said he made the calls to just reassure them that everything was fine, surely there must be some record. There must be some feedback given to show the fairness and the balance the calls took. We know that only Omnitrax got a private dinner with the Minister of Finance after that. They're the only ones. Pat Broe, who is the CEO…. I think Broe partnerships owns Omnitrax. We know they got a private dinner. We know CPR didn't get a private dinner. Is there anything in the analysis, post–bid process, that indicates what CPR said as to why they pulled out of the bidding process?

            Hon. K. Falcon: No, there isn't.

            J. MacPhail: The minister sort of said off the record or off-mike that it's good business practice to make these calls. How is it good business practice to call them after they've pulled out of a bidding process just days before the final announcement is made, and nobody in government knows why they pulled out? How's that good business practice? What is learned from that?

            Hon. K. Falcon: Two points. One is that Charles River Associates, as the member knows from reading the report, did interview all of the bidders in the process prior to releasing his final report. That was reflected in Charles River's final report.

           With regard to the Minister of Finance, I can tell you that the Minister of Finance is tireless in his efforts to promote British Columbia and those that are considering investing significant dollars into the province. I take my hat off to the Minister of Finance, because I think that what he is trying to do is extend his hand of appreciation to those that are taking the time, energy and commitment to try and see how they can invest in British Columbia and improve the province.

            J. MacPhail: Can the minister refer to the Charles River Associates final report and read into the record what it says about why CPR withdrew from the bid?

            Hon. K. Falcon: We'll dig up that information and provide it to the member at a later point.

            J. MacPhail: I don't know why we can't do it now. That's what estimates are for. I've read the final report, and I can't find anything about why CP Rail withdrew from the bid. It doesn't say a word about that. That's why I'm asking the minister these questions about why CP Rail pulled out of the process.

           The reason why these questions are so key is because…. We're going to get into the legislative raid, but let's remember that this government had to cancel the second part of the privatization of B.C. Rail. Selling the spur line to Roberts Bank — that sale actually had to be cancelled because of the police investigation.

           It's not like these are questions just out of political curiosity. I'm trying to figure out what the business acumen of this government is and what work they actually did to demonstrate impartiality, fairness and balance around the CN successful bid. The reason why I'm sure the minister is going to have trouble finding any quote in the Charles River Associates report giving information about why CP Rail pulled out is because there isn't anything there.

           Now, November 19, we have CP Rail and one of the partners in the Omnitrax bid complaining about fairness. November 25, the government announces that it has accepted CN's offer — big splashy announcement. I wasn't invited. I'm not quite sure why. It seems to be a trend of this government not to invite opposition members to an announcement. It was not at all the practice of the previous government to prevent opposition members from attending. They were always notified. This government never does that. Anyway, it was a big splashy announcement, and lo and behold, CN was the successful bidder.

           Then legislation is introduced, and I debate that legislation in the House with the previous Minister of Transportation. I'll be examining what the previous Minister of Transportation said during the debate of legislation allowing for the sale of B.C. Rail Properties Ltd. with the minister later on. That was November 25. Then the legislation was passed that week.

           December 1, 2003, the B.C. Attorney General is told by his staff that a case requires the appointment of a special prosecutor and may involve the search of the B.C. Legislature. December 27, 2003, the B.C. Solicitor General calls the Premier of B.C., who's on vacation in Hawaii, to tell the Premier to expect an important call in the next day or so. The Solicitor General says later that he did not give the Premier any details.

           December 28, 2003, the RCMP and the Victoria police department execute nine search warrants at seven locations across the province, including two offices in the B.C. Legislature. The Solicitor General again calls the Premier to brief him on those legislative police raids.

           December 29, 2003, Dave Basi, who was the ministerial assistant to the Minister of Finance, is fired from his job as ministerial assistant, and Bob Virk, who is the ministerial assistant to the former Minister of Transportation, is suspended with pay.

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