Government rejects icebreaker offer

The Conservative government has shot down an offer from Quebec’s Davie shipyard to save the government half a billion dollars and eight years on a new polar icebreaker (Terry Milewski, “Harper government rejects offer to save $500M on new icebreaker,” CBC News, 29 May 2014).

Public Works Minister Diane Finley told reporters last week that “it’s very hard to believe” that Davie could actually build the icebreaker for the budget originally set six years ago. “I don’t see how any reasonable person could suddenly believe they can do the same job for half the price,” she said.

In 2008, when the project to build the new ship, the John G. Diefenbaker, was announced, it was priced at $720 million. But with construction delays pushing the project back at least 10 years, that price tag has been raised radically to $1.3 billion.

Officially, no construction contract has been signed to build the Diefenbaker, but the job has been assigned to the Seaspan shipyard in North Vancouver.  Seaspan, however, needs to finish a $200-million upgrade and to complete two new navy supply ships before it’s able to start work on the Diefenbaker.

That means Canadians aren’t likely to see a new icebreaker cruising through the Arctic for a decade or more.

Alex Vicefield, the CEO of Inocea, the international shipping conglomerate that now owns Davie, says his shipyard is fully capable of building such a large ship in just 24 months—not 10 years.

Vicefield says Davie is still the biggest shipyard in Canada. Located on the south bank of the St. Lawrence across from Quebec City, the yard employs 1,000 people and boasts of its ability to deliver advanced commercial ships on budget for international customers.

Vicefield says his offer is both firm and realistic.

“We’ll guarantee the costs. We’re not asking for a cost-plus arrangement. We can guarantee the price,” said Vicefield.

But Finley is adamant that Davie’s offer comes too late, as the procurement decision was made in 2011, when the shipyard was in bankruptcy.

“Davie did not qualify. That procurement is done. It’s over. And there’s absolutely no reason to believe that those numbers would be credible. We already have a contract in place and we’re going to move ahead with that.”

When a reporter noted that there is, in fact, no construction contract with Seaspan, the minister added, ‘Well, we don’t have a contract, but we have made an award under that procurement based on the credibility, the viability, the reliability of the companies at the time.”

“They had a chance to compete. At the time, they weren’t successful.”

That was then, this is now, Vicefield claims, arguing the company should be assessed on its current capacity:

“We’re a competitive international shipbuilder today,” he said.

“We’re building these ships today. We’re building similar vessels. What we would do here is, we would add this vessel [the Canadian icebreaker] into our existing schedule, which maybe helps us to reduce some of the costs as well, compared to other shipyards where you really have to build the shipyard to build the ship. We have it going today.”

Photo credit: Andy Liang

Tags: Arctic sovereignty, Canadian Coast Guard, Canadian defence policy, National Shipbuilding Procurement Strategy, Polar Icebreaker