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Canadian Naval Plans Lure Global Shipbuilders

Jun. 14, 2014 - 03:45AM   |  
By DAVID PUGLIESE   |   Comments
Bidding To Support: An artist rendering of the definition design for the Canadian Joint Support Ship. At least one team plans to compete for in-service support contracts for the JSS program.
Bidding To Support: An artist rendering of the definition design for the Canadian Joint Support Ship. At least one team plans to compete for in-service support contracts for the JSS program. (Canadian Armed Forces)
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VICTORIA, BRITISH COLUMBIA — International shipbuilders and maritime equipment firms are expanding their presence in Canada to take advantage of an expected boom in naval contracts over the next 20 years.

Canada is re-equipping its Navy and Coast Guard under its National Shipbuilding Procurement Strategy (NSPS). That strategy, expected to spend between CAN $30 billion to $50 billion (US $29 billion to $48 billion) by 2035, will see construction of 28 major warships and 116 smaller vessels.

Two domestic yards, Irving Shipbuilding of Halifax, Nova Scotia, and the Vancouver Shipyards/Seaspan Marine of Vancouver, British Columbia, were selected by the Canadian government in 2011 to build the vessels.

But industry representatives, both domestic and international, are eying the billions of dollars worth of contracts expected to come from providing ship equipment, design and long-term maintenance and in-service support.

“We see a lot of potential opportunity in the NSPS,” said Gordon Fleming, Babcock Canada’s chief operating officer.

Babcock Canada, a subsidiary of Babcock International in England, has teamed with the Quebec-based Davie Shipyards, owned by Inocea of Monaco, to bid on upcoming Canadian Coast Guard contracts.

The partners also plan to compete for in-service support contracts for two NSPS programs; the Joint Support Ships and the Arctic/Offshore Patrol Ships.

The combined value of those two contracts will potentially be $5 billion, according to Ian Mack, the Department of National Defence’s director general of major project delivery. He expects a request for proposals to be released to industry in the spring of 2015 and a contract award in 2017.

Fleming said the companies would also be interested in the in-service support contracts for the proposed Canadian Surface Combatant fleet, but that contract is at least a decade away.

French shipbuilder DCNS also has pursued the program and is proposing the FREMM multipurpose frigate as a design.

In November, DCNS Chairman and CEO Patrick Boissier visited Canada to meet with domestic companies and highlight his firm’s desire to expand into Canada.

In April, DCNS incorporated a wholly owned Canadian subsidiary to develop naval engineering and industrial partnerships in the country. DCNS Technologies Canada Inc., with headquarters in Ottawa, will lead the design of the Canadian version of the FREMM, company officials said.

In September 2012, the potential of NSPS work prompted Atlas Elektronik, jointly owned by EADS and ThyssenKrupp, to set up a Canadian subsidiary. That firm, Atlas Elektronik Canada Ltd, is now operating from Victoria, BC, and Ottawa.

Some of the foreign-based maritime firms are already receiving work from NSPS.

The German Navy’s Berlin-class design was selected in June 2013 for the Royal Canadian Navy’s new fleet of Joint Support Ships. That design is from ThyssenKrupp Marine Systems, which is working through its Ottawa-based subsidiary.

The Coast Guard icebreaker, to be built by Seaspan, is being designed by STX Canada Marine, with assistance from Aker Arctic Technology based in Finland.

Irving Shipbuilding, which has the contract to build combat ships under NSPS, is working closely with General Dynamics Bath Iron Works of Maine. Odense Maritime Technology in Denmark has been brought in for design work of the Arctic/Offshore Patrol Ships.

L-3 Communication Systems-East, based in Camden, New Jersey, was selected in March by Lockheed Martin Canada to support design of the integrated communications subsystems for the Arctic/Offshore Patrol Ships.

Lockheed Martin is overseeing the integration of systems on board the ships. Under an initial contract, L-3 CS-East will design the interior and exterior communications subsystems for the new vessels, company officials said.

But not all attempts by foreign-owned companies to make inroads into NSPS have been successful.

In early June, Alex Vicefield, chief executive officer of Inocea, the consortium which owns Davie Shipyards, embarked on a public relations campaign to convince the Canadian government to allow the yard to take over construction of a Polar-class icebreaker for the Coast Guard. Construction, planned for Seaspan in Vancouver, has been delayed and there are concerns costs will rise.

Vicefield said the company’s yard can start work immediately and have it built within two years. He guaranteed the price would remain at the original estimate of $720 million.

Vicefield said the yard is currently building similar large vessels for other nations and companies.

But Public Works Minister Diane Finley, in charge of government procurement, has rejected the offer. She noted that at the time of the NSPS selection of shipyards in 2011, Davie, then under different ownership and in dire financial straits, did not qualify. Inocea has since turned the yard around.

“That procurement is done,” Finley said of the Polar-class icebreaker. “We have made an award under that procurement based on the credibility, the viability, the reliability of the companies at the time.”

Seaspan has not yet begun building the icebreaker. It will first work on the Joint Support Ships, before moving to the icebreaker. The Polar-class vessel is not expected to be ready until 2022. ■


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