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Problems Surfacing For Canada's Shipbuilding Plan

May. 21, 2013 - 06:40PM   |  
By DAVID PUGLIESE   |   Comments
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VICTORIA, BRITISH COLUMBIA — Canada’s multibillion-dollar naval shipbuilding program is heading into stormy seas, critics say, as new questions emerge about costs and the capability of domestic shipyards.

The construction schedules for the Royal Canadian Navy’s proposed joint support ship and the Coast Guard’s planned Polar-class icebreaker will mean that the construction of one vessel will be delayed as the selected shipyard cannot build both at the same time.

The government acknowledged May 14 that it is seeking a solution for that issue and that delivery schedules for one of the ships will have to be changed.

In addition, a May 2 investigative report by the Canadian Broadcasting Corporation has raised questions about why Canada could be paying up to five times the price to build Arctic patrol ships similar to those constructed by Denmark and Norway.

All three ship projects are part of the Canadian government’s vaunted National Shipbuilding Procurement Strategy (NSPS), a rebuilding of the country’s naval capabilities expected to cost more than CAN $30 billion (US $29.6 billion).

The problems with the ships have prompted critics to question the Canadian government’s management of the NSPS. Opposition members of Parliament are suggesting the government is out of its depth on the NSPS and the strategy is in deep trouble.

Questions were also raised about the capabilities of the joint supply ships in a Feb. 28 report from Kevin Page, the government’s parliamentary budget officer. He warned that the actual cost of the fleet will be significantly higher than the $2.6 billion the government is budgeting. Page estimates the true cost of the ships to be a little more than $4 billion, and without extra funding to top up the budget, the ships’ capabilities will have to be cut.

“The problems with NSPS are starting to surface,” said Michael Byers, who has been consulted on Arctic issues by the federal government. “I think they are certainly running into delays and cost escalations.”

The joint supply ships and Polar icebreakers are supposed to be built at Seaspan Shipyards, Vancouver, B.C., but Byers said a lack of capacity will affect their schedules.

Canadian shipyards have not built a major warship class since the 1990s, nor have they undertaken a program as extensive as NSPS since World War II. Seaspan is hiring workers and upgrading facilities. But it is not expected to be able to do the simultaneous construction in time to deliver the ships when the government says it needs them.

The new icebreaker is expected to enter Arctic service in 2017, in time for the decommissioning of the Coast Guard’s largest and most capable icebreaker, the Louis S. St. Laurent.

The joint support ships, which the Navy considers vital to keeping warships supplied while at sea, are supposed to be delivered by the same yard by 2018. Two of those vessels will be built.

Seaspan has not yet cut steel on either project.

“A sequencing decision will require that the production and delivery schedule for one of these two projects be adjusted to accommodate the construction of the other,” said Lucie Brosseau, spokeswoman for the Department of Public Works and Government Services, the Canadian government department that handles procurement.

Brosseau said the office coordinating the NSPS is working with the Department of National Defence and Coast Guard on the issue. “Details around the impact of this decision on project schedules will be assessed as part of the decision-making process,” she added in an email.

She said the government will ensure that the Coast Guard and Navy are able to fulfill their mandates, but did not give details on how that would be done.

The Navy did not provide details on contingency plans to keep its fleet of supply ships operating despite the delay.

Brian Carter, president of Seaspan Shipyards, said the company is waiting for the government to decide on which of the projects it will proceed first.

“It’s a purely operational thing for the government, so we have no preference one way or another,” he said. “We’re ready to support whatever they send our way.”

He said whichever ship is designated first, the company would be ready to start cutting steel in mid-2016.

Ross Langley, vice chairman of Irving Shipbuilding, which is the designated shipyard under the NSPS to build the arctic/offshore patrol ships (A/OPS) and a replacement fleet for the Navy’s frigates, said critics who claim the procurement strategy is in trouble are jumping the gun. He noted the yard built the Canadian Navy’s Halifax-class frigates, which were more complicated and a much larger project than A/OPS.

“We built those effectively and on budget,” he said. “It’s early days” for the NSPS, Langley added.

He also said concerns about the cost of A/OPS compared with Arctic patrol ships built by Norway and Denmark for a cheaper price are unfounded.

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