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December 1, 2017 | Local, Naval

Chantier Davie won’t take ‘no’ for an answer

By Kevin Dougherty. Published on Dec 1, 2017 10:46am

QUEBEC – Chantier Davie in Lévis, across the St. Lawrence from Quebec City, will be forced to lay off 800 shipyard workers before Christmas without a new contract to build a second supply vessel for the Canadian navy.

“We're not taking no for an answer on that,” Davie CEO Alex Vicefield said in a telephone interview on Thursday, after Defence Minister Harjit Singh Sajjan told Le Journal de Québec last week through his press attaché that the government does not plan to buy a second supply ship.

In an email response Thursday, Sajjan's press attaché Bryne Furlong reiterated that, “Navy and Coast Guard supply requirements have been extensively studied and are subject to long-term planning, which does not include a second supply vessel‎.”

The layoffs have begun, now that the Davie workforce has completed — on time and on budget — conversion of the German-built container ship Asterix into a supply ship to deliver fuel, water, food and supplies to the ships of the Royal Canadian Navy.

Davie's plan now is the $600 million conversion of the Obelix, a sister ship to the Asterix, into the navy's second supply ship. Vicefield said Ottawa's plan calls for paying $2 billion each for two new supply vessels, the first of which will only be available 10 years from now.

“Why do we need to build these ships for $2 billion each?” Vicefield asked, noting the Asterix and Obelix cost $600 million each and are superior vessels.

“I'm not a political activist but we believe in the project and we delivered,” Vicefield said.

In 2011, the Harper government unveiled its National Shipbuilding Procurement Program, awarding $38-billion in contracts to build ships for the Navy and Coast Guard to Irving Shipbuilding Inc. of Halifax and Seaspan Shipbuilding of Vancouver.

Davie, emerging from bankruptcy at the time, is Canada's largest shipyard and was excluded.

Cost estimates have risen since then, Vicefield noted, with the cost ballooning to over $100 billion. And in the six years since the plan was announced, the two winning shipyards have delivered no ships.

Officially, Seaspan is to launch its first replacement supply ship in 2021.

But Vicefield noted that Andy Smith, the official responsible for shipbuilding in the federal department of fisheries and oceans, told a Commons committee Nov. 7 that Seaspan has a backlog of three ships to build before work on the first supply ship can begin in 2023, for delivery in 2027.

Vicefield said that in spite of granting the lion's share of shipbuilding contracts to Halifax, the Conservatives where shut out in Atlantic Canada in the 2015 election, and Steven Blaney, the Conservative MP representing Lévis, was re-elected even though Davie was excluded from the National Shipbuilding Procurement Strategy.

“The key point here is that shipbuilding contracts do not win votes,” Vicefield said. “But major procurement scandals bring down governments.

“If I was in government, I would be worried about a major procurement scandal, where you are spending five, six times the cost to buy a ship than any other country in the world pays and nothing is being delivered.”

The Asterix is also a hospital ship and can deliver humanitarian aid in the event of major natural disasters, such as a tsunami or a devastating hurricane.

Davie stepped into the breach in 2014, when the navy's two existing supply ships were scrapped and plans by Seaspan to build two replacement supply ships were a distant prospect.

The Harper government granted Davie a contract to convert the Asterix into a supply ship for about $600 million as a private-public partnership, with Davie managing the project from stem to stern, its financing, as well as providing its civilian crew and leasing the ship to the federal government for five years.

When Justin Trudeau led his Liberals to power in 2015, Irving Shipbuilding leaned on Liberal ministers from the Maritimes to have the contract cancelled.

But the work was underway and Ottawa did not block the Asterix project.

The Halifax-based and crewed Asterix will supply Canadian navy ships off the east coast, while off the west coast Canadian naval vessels will be supplied by Chilean and Spanish navy supply ships.

“Why would you do that when you can put the money back into Canada and ensure the jobs of 800 people here for another two years?” Vicefield said. “It makes no sense.”

Vicefield regards the Harper government's plans, renamed by the Liberal government as the National Shipbuilding Strategy, as “mind-boggling” and “a bit of a joke.”

And he believes Canada can have three shipyards, including Davie, to build and maintain naval and Coast Guard vessels.

“There are about 50 large ships that need replacing,” he said, noting the average age of the Coast Guard fleet is 40 years. “So there is enough work for sure for three shipyards for the next 30 years.”

“We haven't been pushing against the National Shipbuilding Strategy,” Vicefield said. “I think it is going to fall on its own.”

Irving, which is now building ships in Romania, and Seaspan, which has ordered two ferries to be built in Turkey, are defending the plan, and so far have political support.

“They see the writing on the wall,” Vicefield said. “They want to destroy the competition. They see that now they have the upper hand.

“But we're not going to let that happen,” he insists.

“We're convinced the new government, the Liberals, will actually see sense.

“But it is taking time for them to get their feet under the desk.”

https://ipolitics.ca/article/chantier-davie-wont-take-no-answer/

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