DAVID PUGLIESE, OTTAWA CITIZEN
Taxpayers will have to spend $1.1 billion extra on new navy supply ships that are going to be built starting this summer, the Liberal government now acknowledges.
Previously the cost of building the two ships at Seaspan shipyards in Vancouver, BC had been pegged at $2.3 billion.
But the government ordered a review of that cost figure and in an email to Postmedia, Procurement Minister Carla Qualtrough's office now confirms the cost for the Joint Support Ships, or JSS, is set at $3.4 billion.
Pat Finn, the head of procurement at the Department of National Defence, said the new price tag came as the government decided to do an additional analysis of the project and include other items it had not previously included.
In some cases equipment for the ship has been purchased so there are better costs available on those items, Finn said in an interview Monday. Also taken into account was new infrastructure and the delays with the program, which, in turn, drove up the price as the cost of material increased over the years.
“The build period has changed quite dramatically,” Finn acknowledged.
At one point, the first ship was supposed to arrive in 2012. That has been changed a number of times with the government later hoping for a 2018 delivery and then a 2019 arrival for the first vessel.
The Department of National Defence is now hoping for the delivery of the first ship in 2022 or 2023. Construction will begin at Seaspan this summer of some initial portions of the vessels, Finn said.
The government hopes starting construction on the supply ships in the summer will head off any potential layoffs of skilled employees at Seaspan.
Finn said of the $3.4 billion figure, the actual cost of building the two ships accounts for a little more than 60 per cent.
Finn said the new costing model for the JSS is more akin to the one used by the parliamentary budget office. That office had an even higher estimate for JSS when it concluded in 2013 that the final tally for taxpayers would be $4.13 billion.
The Joint Support Ships are critical for the navy as they provide fuel and supplies for warships at sea.
But the Royal Canadian Navy retired its last two aging supply ships years ago. One was damaged beyond repair in a fire. The other was removed from service because of excessive corrosion. The Canadian military had been relying on the Spanish and Chilean navies to provide supply vessels for short periods of time to help fuel up Canadian warships at sea.
Because of the delays in the JSS program, the previous Conservative government entered into agreement with Davie Shipyards in Quebec to lease a commercial vessel that had been converted into a refueling and supply ship.
That ship, the MV Asterix, is at the heart of federal government's case against Vice Admiral Mark Norman. Norman has been accused by the RCMP of warning Davie in the fall of 2015 that Liberal cabinet ministers wanted to derail the Asterix project.
Word of the Liberal plan leaked out to the news media and the resulting embarrassment forced the Trudeau government to back down on its plans and the conversion of Asterix proceeded.
Norman was put under investigation and Prime Minister Justin Trudeau predicted on two occasions the officer would ultimately end up in court.
In March, the RCMP charged Norman with a single count of breach of trust. A date for the trial has not yet been set.
Norman denies the charge and has said he looks forward to clearing his name.
Asterix is considered a rare achievement in Canadian military procurement in that it was delivered on time and on budget. The supply ship is now at sea with Royal Canadian Navy and is headed to a major military exercise to begin later this month.
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By David Akin A Quebec shipyard hopeful of getting more federal work has condemned a storied Coast Guard ship as beyond repair, declining to bid on a lucrative contract to overhaul the 56-year-old CCGS Hudson on the grounds that it “presents a serious and real threat to the safety of life at sea.” In a letter delivered Tuesday to officials with Public Services and Procurement Canada, Davie CEO Jared Newcombe said his company, based in Lévis, Que., would not bid on the contract to upgrade the Hudson as Davie believes the vessel to be beyond repair. A copy of that letter was provided to Global News. The federal government was trying to squeeze another few years of service out of the Hudson which, having been commissioned in 1963, is the oldest ship in the Coast Guard's fleet. Bidding on the life-extension contract, expected to be worth about $20 million, ended this week. It is the latest headache to bedevil a federal shipbuilding process that has been rife with delays. Davie's remarkable letter — procurement experts cannot recall a bidder ever recommending scrapping a major vessel when offered a chance to upgrade it — underscores the difficulties successive federal governments have had in updating an aging Coast Guard and Royal Canadian Navy fleet. “The Coast Guard ships are in serious need of replacement now,” said David Perry, a defence procurement expert and senior analyst at the Ottawa-based think tank, the Canadian Global Affairs Institute. The average service of a Coast Guard ship is about 36 years. Canada's Maritime peers typically replace their Coast Guard vessels within 30 years of service. The Harper government announced in 2007 that the Hudson was to be replaced by 2012 and the contract to replace her was awarded to Vancouver's Seaspan shipyard. But that project is mired in delays and it is not clear when there will be a replacement. There is not yet a confirmed date for construction to start while the projected budget of $331 million to build the Hudson's replacement is under review. The Hudson did have a $4-million refit in Hamilton, Ont., in 2016, and has had more work done on it since it returned to its East Coast port in Dartmouth, N.S., in 2017. But Davie told the government that, in its view, the Hudson has now reached the end of the line. “The level of degradation to the hull, fuel tanks, onboard systems and other structural elements presents a serious and real threat to the safety of life at sea as well as the environment,” Newcombe wrote. Newcombe said his company had to consider its own liability should it have won the current life extension contract, “as well as ethical, repetitional and environmental considerations.” Full article: https://globalnews.ca/news/4884924/coast-guard-ship-cant-be-fixed-canada-shipbuilding-problem/