Gov’t badly underestimated cost of ships, says watchdog
OTTAWA — The Harper government’s vaunted national shipbuilding plan was under fire Thursday after Parliament’s budget watchdog found it could cost as much as $4.13 billion to replace the navy’s ancient resupply ships, and not $2.6 billion as originally budgeted.
The government says it will continue to refine its cost estimates as the new resupply vessels move from the drawing board to the Vancouver shipyard where they will be built.
But parliamentary budget officer Kevin Page warned the military risks losing key resupply capabilities unless more money is added, prompting opposition parties to accuse the government of planning to buy “tugboats painted grey.”
The Harper government set aside $2.6 billion in 2010 to construct two new joint support ships, which are supposed to replace the navy’s 1960s-era Protecteur-class resupply ships.
The joint support ships are among the vessels to be built under the Harper government’s $35-billion shipbuilding strategy, which is supposed to revitalize the country’s navy and coast guard fleets over the next two decades while simultaneously turning the country into a world-class shipbuilder.
Yet in a report released Thursday, Page said the government will need to inject between $680 million and $1.53 billion more into the joint support ship project just to make sure the new vessels are able to do the same job as the old ones.
“It would be in the realm of the five per cent probability that they would get anything even near a replacement for the Protecteur for the $2.6 billion,” Page told reporters. “So we need to set aside more money.”
The first of the new joint support ships, which are being built in Vancouver, was supposed to have been delivered last year, but now won’t be in the water until at least 2018.
National Defence has called resupply ships “integral” to the navy’s ability to do its job.
Public Works Minister Rona Ambrose, who is overseeing the entire shipbuilding strategy, said the government has implemented “rigorous” oversight that will monitor and verify costs “for each step of every project as they move forward.”
“Let’s remember,” Ambrose added, “this is in the design phase, but we have all these measures in place to protect the taxpayer.”
The fact the joint support ship design has not been finalized is key as senior federal bureaucrats said earlier this week that they remain confident the government can still afford two vessels, while also admitting that there could be “trade-offs” as the new vessels are designed to stay within budget.
Page said if the government does not put more money into the project and instead scales back the new supply vessels, that should be cause for debate as the new resupply ships would almost certainly be less capable than the existing vessels.
“The question’s really going to be for parliamentarians: ‘Is that what we want?’ ” he said.
“What kind of requirements are we going to be left with these ships? How big will these ships be? How many people will be able to stand on these ships? What’s the refuelling capacity, sealift capacity, etc.?”
Page’s findings are an unwelcome development for the Harper government, which has been holding up the shipbuilding strategy as a success in the face of mounting problems with the F-35 stealth fighter, maritime helicopters, search and rescue aircraft and other military purchases.