Ships: The next great boondoggle

Claims that the government’s “National Shipbuilding Procurement Strategy” will be completed at anything near its proposed schedule and price tag are a political fantasy that even our ever-credulous Defence Minister must find difficult to believe. But the pretence that the massive project to build new Navy and Coast Guard vessels will be a model of procurement excellence goes on. The Auditor General, who recently introduced a little reality to discussion of the planned F-35 procurement, is now turning his sights on the shipbuilding project (Lee Berthiaume, “Auditor general turns attention to feds’ $35-billion shipbuilding plan,” Postmedia News, 14 December 2012):

Months after his scathing F-35 report shook the Harper government’s plans to buy the stealth fighter, Auditor General Michael Ferguson has turned his attention to another military procurement project: the Harper government’s $35-billion shipbuilding plan.

Ferguson’s report on the National Shipbuilding Procurement Strategy is due in fall 2013 and — depending on what he finds — could be far more explosive than the F-35….

The National Shipbuilding Procurement Strategy has been regarded as a godsend for the Royal Canadian Navy and the Coast Guard, which operate fleets of destroyers, icebreakers, frigates and other vessels that are nearing the end of their lifespans and must be replaced.

The strategy is seen also as a huge winner for Irving Shipyards in Halifax, Seaspan Marine in Vancouver and their respective communities after a panel of federal bureaucrats announced in October that these companies had been selected as the main production centres for $33 billion in work. (The other $2 billion will go to a number of other shipyards across the country on smaller projects.)

And amid problems with the F-35 stealth fighter program and other military purchases, the Conservative government has held up the shipbuilding strategy as an important success for military procurement and a means to leverage tax dollars into massive economic spinoffs.

But there have been repeated indications that the strategy is in danger of running aground — which would have military, economic and political ramifications far greater than those associated with the F-35.

Delivery of the first ships to be produced under the strategy — seven armed Arctic vessels valued at $3.1 billion — was supposed to begin in 2015, but has already been delayed three years to 2018.

Those Arctic ships and replacements for Canada’s existing destroyer and frigate fleets are to be produced by Irving Shipbuilding in Halifax for a total of $25 billion.

Work on the frigate and destroyer replacements is also reportedly proceeding at a snail’s pace because of uncertainty over what the navy wants to build into the new ships.

This is critical because not only are the destroyers already due to retire before replacements come online, but any delay reduces the government’s purchasing power because of ever-increasing material costs and inflation, possibly resulting in fewer ships or capabilities.

Similarly, efforts to replace the Royal Canadian Navy’s 50-year-old resupply ships have repeatedly been bogged down as National Defence has been unable to decide on what it wants the ships to actually do.

The replacements are being produced by Seaspan Marine in Vancouver and were supposed to be in the water by 2012.

But design and money concerns have delayed delivery of the first new, $2.6-billion joint support ship until at least spring 2018.

The chances of the shipbuilding “strategy” being completed on time and within budget are negligible. Perhaps another scathing report from the Auditor General will make the Conservative government face up to that reality.

Photo credit: DND

Tags: Auditor-General, Canadian military spending, Coast Guard, Military procurement, National Shipbuilding Procurement Strategy, Royal Canadian Navy