Pacificats:  An Escalation of Commitment

In the mid-1990s, B.C. Ferries – the government company that operates the ferry system in British Columbia, Canada -- decided to design and build three catamaran-style ferries for the route between Vancouver and Nanaimo. The Premier of British Columbia – the project’s champion -- promised that these “PacifiCats” would travel faster than conventional ferries.  The entire project would cost no more than $210 million “right down to the toilet paper.”

Instead, costs ballooned to nearly $500 million as the project fell more than two years behind schedule. The first two PacifiCats were plagued by so many mechanical problems that each ferry was under repair half the time. A more devastating discovery was that the PacifiCats had a massive wake that caused ecological and property damage along the shoreline. This made them unsuitable for B.C. waters.

These problems were not unforeseen. During the project’s first year, a marine engineer warned that the PacifiCats were not economically feasible and could endanger the public. Soon after, a British shipping journal reported that the ferries would cost much more to build than the original estimates. By the fifth year, the B.C. Auditor-General slammed the project, saying that the B.C. Ferries’ board of directors endorsed the project under government pressure. The board apparently raised concerns about the PacifiCats both before and many times after their decision.

Almost six years after the PacifiCat project was announced, a new Premier of British Columbia cancelled the program and put the three ferries up for sale at less than one-quarter of their cost. The former Premier, who had supported the PacifiCats until he stepped down for other reasons, was one of the few people criticizing the decision to end the project.

Discussion Questions

1. Why is the Pacificat project an example of escalation of commitment?
2. Identify the cause(s) of escalation of commitment in this situation.
3. Recommend ways to minimize escalation of commitment in major projects such as the Pacificat project.

Sources: K. Fraser, “Ferry-Tale Alarms,” Vancouver Province, June 14, 2000; P. Willcocks, “Fast Ferries may Sell for Under $40 Million Each,” Vancouver Sun, May 31, 2000; K. Lunman, “B.C. Admits Failure, Puts Fast Ferries up for Sale,” Globe & Mail, March 14, 2000, p. A1; C. McInnes, “Victoria Sinks Fast Ferries,” Vancouver Sun, March 14, 2000; K. Lunman, “B.C. NDP Blasted in Report on Ferries,” Globe & Mail, October 29, 1999, p. A7.