Vessel upgrades & modifications 39.9 47.6 43.8 21.5 75.7 53.7 55.8 Terminal marine structures 27.5 44.0 41.6 22.5 31.0 26.6 38.0 Information technology 20.6 18.6 17.2 15.5 14.2 15.2 6.9 Terminal & building upgrades & equipment 7.2 11.1 24.5 15.1 24.3 27.9 11.7 Total (without new vessels) 95.2 121.3 127.1 74.6 145.0 123.4 112.4 New vessels 1.4 0.9 1.6 6.8 348.7 329.1 150.2 Total (including new vessels) 96.6 122.2 128.7 81.4 493.9 452.5 262.6
Our extensive design and analysis conducted to date included: validation of environmental conditions; hydrodynamic testing of the vessel; cable load analysis and dynamic interaction of the ferry and berths; and the determination of operational criteria, cable specification and safety factors. Regulatory approvals for the cable ferry have been obtained, including approval from the Department of Fisheries and Oceans under the Canadian Environmental Assessment Act and Transport Canada approval under the Navigable Waters Protection Act. We have now moved into the detailed design phase for the cable ferry and for the terminal infrastructure. We expect to conclude a procurement process for the construction of the vessel and terminal works by the coming summer. The new 50-car vessel is expected to be in service by the fall of 2014. The cable ferry is an innovative initiative and is part of our ongoing efforts to identify and pursue opportunities that have the potential to enhance our cost effectiveness in delivering safe, reliable and quality ferry service.
Fuel conversion
On October 29, 2012, we submitted a fuel strategies report to the Commissioner which included our plan for transition to alternate fuels. We have been studying the feasibility of using LNG and believe that a move to this fuel source would reduce costs and emissions. At this time, LNG is over 50% less expensive than the ultra low sulphur diesel we currently use. LNG, as well as the fuel we currently use, meets all current and proposed domestic and international emissions regulations. We believe that LNG is a viable option for future new vessels. We are also analyzing LNG as an option for existing vessels undergoing major retrofits and intend to pursue the option where it is economically and technically feasible. We have several existing vessels scheduled for mid-life upgrades beginning in fiscal 2015.
alternative service proviDers
In an effort to reduce costs on our regulated routes, from time to time we test the market to determine if another operator, under contract to us, could provide safe, reliable and high quality service that is more cost-effective. In addition, under section 69 of the Act the Commissioner has the authority to require us to provide a plan to seek alternative service providers.
In May 2012, we issued a Request for Proposal to third parties interested in providing, under contract to us, passenger and vehicle cable ferry service on our route between Buckley Bay and Denman Island. We concluded that we will operate the route ourselves as we can run it in a more cost-effective manner than an alternate service provider while maintaining a high level of safety, quality and reliability.
In fiscal 2010, the costs for the new major vessels were finalized and design costs for the new minor and intermediate sized vessels, including the cable ferry, began.
Average annual capital expenditures over the last seven years were $234.0 million in total, $114.1 million excluding new vessels.
We are in the planning stages of our second new build program focused on our minor and intermediate sized vessels. The typical life span of vessels is 40 to 45 years and our minor and intermediate sized vessels currently have an average age of 38 years. As the identified replacement dates approach, we will undertake a full review of these vessels to determine if any are candidates for life extension rather than replacement. Our expectation is that we will need to replace four to five of these vessels over the next 10 years.
The first new vessel will be a cable ferry as detailed below. When the cable ferry comes into service, it will allow us to retire the 49 year-old Tenaka. Our strategy for new vessels includes design optimization, interoperability, and standardization of vessels across the fleet, to the extent possible, to provide more flexibility to respond to changes in the market demand and traffic forecasts. We also plan to adopt liquefied natural gas (LNG) as a fuel source where feasible.
The Queen of Burnaby (48 years old) and the Queen of Nanaimo (49 years old) have been earmarked for replacement and several options are being considered. Our recommended option is to replace these two vessels with two 145 car capacity open-deck vessels and one 125 car capacity open deck vessel that would be available for additional sailings when the demand is high and temporary vessel replacement for several other vessels when they are undergoing maintenance. The options have been presented to the Commissioner for his review and approval.
Significant upgrades at our terminals that support our Major Routes are substantially complete and work is commencing on replacing marine structures, buildings and other improvements at our terminals that support our other routes.
cable Ferry
After four years of studying the feasibility of a cable ferry, on
November 23, 2012, we announced that we are proceeding with plans to design and build a cable ferry for service on one of our shortest routes between Buckley Bay on Vancouver Island and Denman Island.