Davie offers second supply ship at a discount
A Quebec company is offering the Liberal government a second supply ship at a reduced price as it warns about further delays on a similar vessel being built for the Royal Canadian Navy by a firm on the West Coast.
Davie Shipyards delivered its first ship, Asterix, to the government on time and on budget in a deal worth $659 million. It is now offering a second ship at $500 million to entice the Liberals to move ahead with such a purchase.
But industry representatives privately say Davie faces an uphill battle as Asterix is at the heart of the trial of Vice Admiral Mark Norman and any government move to buy a sister ship would signal the actions of that naval officer in supporting the original deal was right.
Naresh Raghubeer, a senior advisor to Davie, said the Asterix sister ship — Obelix — can be ready for missions with the navy within 24 months. “We’ve proven already we can do it,” he added.
Davie was selected by the previous Conservative government for a sole-source deal to convert Asterix, a commercial vessel, into a naval supply ship. That was done after the military’s two existing supply vessels were taken out of service because of damage and age.
When the Liberals formed a new government in the fall of 2015 they tried to delay the Asterix project but backed down after Davie warned it would have to shut down its yard.
Asterix has been operating for the last nine months, refuelling and resupplying Canadian and allied warships.
Norman, who had been head of the navy, was accused of leaking information to Davie about Liberal plans to delay Asterix as well as advocating for the Davie design. He is charged with one count of breach of trust but has said he did nothing wrong as he was following government directives.
Conservative leader Andrew Scheer questioned the Liberal government Dec. 12 in the Commons why it was not moving ahead with acquiring Obelix, pointing out the navy needed a second ship.
But Prime Minister Justin Trudeau accused Scheer of playing “petty politics.”
“The armed forces did an assessment,” Trudeau said. “They don’t need the Obelix.”
Asked about the assessment, the Royal Canadian Navy referred Postmedia to a November 2014 internal document which outlined the requirements of an interim supply ship. The document was produced before a deal was reached on Asterix. The navy’s statement noted that the Joint Support Ship being built at Seaspan Shipyards in Vancouver “remains a critical component for achieving success in both international and domestic” Canadian military missions.
That joint supply ship was supposed to be delivered by Seaspan in 2017. That schedule slipped and the 2019 and 2020 delivery dates were proposed. The latest delivery date for the first of two ships is now 2022-2023 but with the caveat attached “with risk”, meaning that it could fall further behind schedule, government officials confirmed to Postmedia.
The cost of the Asterix project included the conversion of the ship, the lease of the vessel from Davie over a five-year period, and the company’s provision of a 35-member civilian crew to run the vessel. The Royal Canadian Navy provides as many as 50 personnel to do the actual at-sea refuelling and resupply of its warships.
A similar arrangement could be made for Obelix but the cost would be lower since the engineering for the conversion process has already been worked out, Davie officials pointed out.
Raghubeer said Davie could fill the gap in supply ships while Seaspan continues to build the two vessels the government originally requested from that yard.
The Davie yard represents 50 per cent of Canada’s shipbuilding capability. Currently the firm has 200 employees, down from the 1,400 working in 2017 when Asterix was delivered.
Both the Commons defence committee and the Senate defence committee recommended acquiring a second supply ship from Davie.
Davie’s rival, Irving Shipbuilding, has voiced opposition to the Quebec company receiving any additional federal shipbuilding contracts.
THE ARMED FORCES DID AN ASSESSMENT. THEY DON’T NEED THE OBELIX.