What has not been widely
reported, or commented on, is the almost unbelievable amounts of money the
government plans to waste just to be able to claim that all of the spending
will done in Canada.
Defense Industry Daily is reporting that: “Canada isn’t the only country looking to reinvest
in supply ships. In 2002, Britain
began a Military Afloat Reach and Sustainability (MARS) program to replace 11
supply ships in the Royal Fleet Auxiliary. Their program also went through a
great deal of internal turbulence, including a program split in 2007. In early
2012, however, the Royal Navy placed its first MARS contract for 4
double-hulled oiler ships, which would also have the ability to transport and
transfer other supplies.
While the 20,240t Berlin
Class would certainly qualify for this role, Britain
ended up choosing the option Canada
didn’t: BMT’s Aegir design, albeit in a larger 37,000t ship. This makes for a
very interesting comparison, and Britain
added one more major difference: their ships would be built abroad, because
even the UK’s
shipbuilding facilities weren’t deemed ready or good value for money. Instead,
the builder would be Daewoo Shipbuilding and Marine Engineering in South Korea,
one of the world’s leading shipbuilders with a commercial and military history
of on-time, on-budget delivery. The 1st ship, RFA Tidespring, is expected to
enter service in 2016.
The cost differential is stunning.
Canada’s JSS
program is budgeting C$ 2.6 billion for 2 ships of 20,240t each. This means
that each ship costs $1.3 billion. We’ll assume that rough parity with the US
dollar continues throughout the project. We’ll also assume that the JSS project
doesn’t end up with major cost overruns, even though this is a significant risk
given Seaspan Vancouver’s lack of experience.
Britain’s 4 x 37,000t Tide Class MARS replenishment
ships cost GBP 602 million total, or about $950 million equivalent, which means
that each ship costs $237.5 million. Their builder has a long record of solid
performance, so this amount is fairly reliable.
The difference per ship = 5.47x, in order to build
ships with just 2/3 the individual tonnage, and much greater risk of cost
overruns or late arrival.
Simply put, Canada will spend twice as much money as the U.K. to get
half as many ships.
Writing in the Atlantic
Council’s blog, The Defense Industrialist, James Hasik reports that the cost of building
re-supplies vessels in Canada,
as opposed to other yards is unconscionably high.
According to his rough
figures; “The costs of these strategies
are easy to calculate, and perhaps painful to regard:
British
tankers, built in South
Korea: $4,700 per ton
US tankers,
built in the US:
$10,800 per ton
Canadian
tankers, built in Canada:
$69,500 per ton
Using these figures it would
appear that for the cost to build just one 20,240-ton Berlin-class
replenishment ship in Vancouver at an estimated
cost of C$1,450 million, we could build seven in South Korea.
Of course we don’t need, and
certainly don’t want to spend the operating and maintenance costs, of seven support
ships. So why don’t we just do what the Brits did. Canada
could spend $C763 million dollars (£452million) in Korea,
plus another $C253 million dollar (£150million) spent at home to fit out the
ships, and have four ships bigger then the Berlin class for a total of a little more
then C$1 billion dollars.
That would leave you C$1.6
billion dollars from the amount currently budgeted to use to retrain workers,
or build OPVs for the Navy, or pay the salaries of Parliamentarians and
Senators.
It’s fun to play the game of
“what could we do with an extra $1.6 billion dollars?” not as much fun to
contemplate the likelihood that we will ever see it. After all, who’s going to
complain? The mainstream media will concentrate on the giant numbers being
thrown about. Fantasy numbers of dollars to be spent and jobs to be
created. The opposition parties dare not
suggest that the ships not be built in Canada, no matter what the cost.
Even the left, as represented by the Rideau Institute, which never saw a
defence expenditure that they liked, will be hard pressed not to complain about
money “being wasted on foreign defence contractors”.
The Conservative government
likes to portray themselves as prudent stewards of the taxpayer’s money. This contract
shows them in a different light. It would appear that their greatest goal is
re-election, no matter what the cost to the nation. They want to be seen as
having a principled position in favour of reasonable Defence spending. Based on
this expenditure alone they stand revealed as incompetent managers of both our
money and our safety.
New warships to cost more
than $100-billion, Ottawa
estimates
New ships for navy, coast
guard, National Shipbuilding Procurement Strategy to cost $38.6 billion
Kelly McParland: Demanding
cost certainty for new Navy vessels is an exercise in fantasy
Canada’s C$ 2.9B “Joint Support Ship” Project, Take 3
England without a Shipyard? What the Scottish Threat Reveals
About the Cost of Domestic Shipbuilding, By James Hasik
Government to Spend £452m on
Four New Royal Fleet Auxiliary Tankers
