New Canadian Shipbuilding Strategy

[Uzlu]

Ontario shipyard withdraws complaint alleging federal favouritism toward Davie

OTTAWA — An Ontario shipyard has dropped a request for an investigation into whether the federal government tried to rig its plan to add a third yard to its multibillion-dollar shipbuilding strategy in favour of Quebec rival Chantier Davie.

The move by Hamilton-based Heddle Marine comes only a few weeks after the government invoked a controversial national-security exception that prevents such investigations by the Canadian International Trade Tribunal.

The tribunal’s role is to ensure the government follows proper procurement rules, including adhering to Canada’s obligations under international trade law and free-trade agreements.

In an interview, Heddle Marine president Shaun Padulo said his company decided to drop its complaint after lawyers determined there was no point in continuing after the exception was invoked.

The tribunal was still formulating an official response to the government’s use of the exception, which the Liberal government quietly expanded over the summer without any consultation with industry or experts.

“What we were advised is that based on the law, that national-security exception, there’s nothing that we could really do to fight it,” Padulo told The Canadian Press.

“They said that this would not be a fight that we could win and it would not accomplish anything to protest the national-security exception. So our best bet is to wait to see what the government’s next steps are.”

The federal government launched its high-stakes search for a third yard to join Halifax’s Irving Shipbuilding and Seaspan Marine in Vancouver in Canada’s so-called national shipbuilding strategy in August.

The winning yard could be awarded billions of dollars in work associated with building at least six new icebreakers for the Canadian Coast Guard and stands to gain much more in future work as well.

Heddle alleged in its complaint that many of the requirements the government said shipyards must meet to qualify for consideration were not legitimate or reasonable — and would disqualify virtually every yard but Davie, which is across the St. Lawrence River from Quebec City.

The federal procurement department subsequently amended some of the requirements, but Heddle asked the tribunal to press ahead with its probe.

It was at that point that the government invoked the national-security exception. In June, the government had rewritten regulations so it could invoke the exception without having to give a justification.

That change came without warning or consultation with industry — and despite previous concerns from the tribunal about an excessive use of such exemptions as well as requests the government limit their use.

While the government did not lay out to the tribunal why the exception was invoked in this case, Fisheries and Oceans Canada spokeswoman Ashley Jackson said it was to ensure the protection of Canada’s “national-security interests.”

“The ships will be used for a wide variety of security-related work such as supporting law-enforcement activities, national and international fisheries patrols, Arctic sovereignty, and maritime-domain awareness,” Jackson said.

“In the past, the coast guard has applied the national-security exception to the projects acquiring the polar icebreaker, medium icebreakers and helicopters.”

Heddle’s complaint aside, the changes to the exception should be a concern to all Canadians given how much the government spends on goods and services each year, said Christopher McLeod, the head of commercial litigation at Mann Lawyers in Ottawa.

“Having an open, fair and transparent system for the government to procure those goods and services is fundamentally important,” said McLeod, who successfully challenged the exception in a previous case in 2016.

That challenge prompted the trade tribunal to begin more closely scrutinizing the government’s reasons for invoking the exception — until the new rules came in saying the government doesn’t have to give any.

“The regulations introduced this summer are a giant step backwards when it comes to fairness, openness and transparency,” McLeod said.

“It’s not like the federal government is simply ignoring a loophole that allows unfairness, they have actually gone back and re-opened a loophole that the (trade tribunal) has previously tried to close.”

https://www.reddeeradvocate.com/business/ontario-shipyard-withdraws-complaint-alleging-federal-favouritism-toward-davie/

 

[Oldgateboatdriver]

Just following up on my post of August 27: It's now been a month since CCGS HUDSON should have come out of the hands of St.John's Shipyard, according to the contract schedule.

Anybody seen her or heard anything about the refit being done and over with?

 

[Colin Parkinson]

AIS reports here moored in St Johns Harbour

https://www.marinetraffic.com/en/ais/home/shipid:382941/zoom:14

 

[Uzlu]

https://www.cgai.ca/a_third_nss_shipyard

 

[Kirkhill]

Thanks Uzlu  - really interesting read.

Ian Mack (Rear-Admiral Retired) served for a decade (2007-2017) as the Director-General in the Department of National Defence responsible for the conception, shaping and support of the launch and subsequent implementation of the National Shipbuilding Strategy, and for guiding the DND project managers for the Arctic Offshore Patrol Ships, the Joint Support Ships and the Canadian Surface Combatants. He also had responsibility for four vehicle projects for the Canadian Army until 2015

From past observations, it is my assessment our coast guard has been faced with tremendous challenges in determining needs and priorities. I liken this to having an ancient house and being unable to determine whether the roof, the flooring, the basement and foundation cracks, the questionable antique appliances or the creaking front steps need priority attention for the one handyman you have in town and who is new to the business. Where you focus your effort is likely to change, and if many things fail catastrophically, the one handyman will be overwhelmed trying to deliver all the required repairs ASAP. Therefore, the capacity of the two NSPS shipyards was adequate if the timelines to fleet renewal were extended, but the need to replace many types of vessels at the same time has rendered the initial assumptions of capacity inadequate.

To some extent and as mentioned in writing elsewhere, such concerns were considered personally when designing NSPS, based on what turned out to be a mistaken assumption that the two NSPS shipyards could choose to have ships’ hulls built in multiple shipyards in Canada (or abroad) and assembled in the NSPS shipyards. This consideration came into play with the realization that, in those early days, there were two ships competing for VSY attention in one period – the Joint Support Ships for the Royal Canadian Navy and the CCG’s Polar Icebreaker. My assumption turned out to be false – VSY did not develop its new facilities and capacity to cater to such an approach. As a result, a significant analysis and decision-making process had to be used to determine the sequencing of these two ships for VSY attention.

Curious

The highlighted text begs for some additional investigation as it seems to suggest that the Project's management was conscious of at least the possibility of buying 3rd party hulls, both locally and offshore, and then outfitting them in the prime yards.  The approach that Damen and Vard/Fincantieri and others have exploited so successfully.

Was this a Washington Group - Seaspan - VSY decision?

The Washington Companies
The Washington Companies is a general inclusive term referring to the association of separate independently operated business entities in which Montana businessman Dennis R. Washington holds a significant ownership position. The Washington Companies are headquartered throughout the United States and western Canada and conduct business internationally. They are involved in rail transportation, marine transportation, construction and mining, heavy equipment sales, aviation technology, and real estate development.

https://www.seaspan.com/washington-companies

Seaspan Corporation (NYSE:SSW) is one of the world’s leading independent containership owners, owning and managing ships which are chartered long-term to major container line companies. A Washington interest based in Vancouver, British Columbia, the company owns a modern fleet of 69 vessels, including some of the largest ever built.

https://www.washingtoncompanies.com/companies.php

I am pretty sure that none of Seaspan's hulls were built in BC (or the States).

 

[Colin Parkinson]

NSPS companies should have their sister companies obligated to have X number of hulls built in country. Hearing companies complain of gaps in ship building and expecting the government to fill them, while purchasing hulls overseas at the same time is not kosher.

 

[Spencer100]

NSPS companies should have their sister companies obligated to have X number of hulls built in country. Hearing companies complain of gaps in ship building and expecting the government to fill them, while purchasing hulls overseas at the same time is not kosher.

Colin I understand your frustration.  But the two shipyards greater corporate brothers will never buy from the Canadian yards.  The whole ship building program was set up to build expensive, high margin ships for the government the end.  The federal government at that.  As the provinces are buying their ferry overseas.  This is a labour favor, job making and vote buy plan.  That the end products are ships are just a very lucky byproduct.  The sister companies buy their offshore because most ships are built at cost or below the already low cost in Asia or Europe.  Look at the three big Korean builders they are basically insolvent and merging.  The PRC builders are subsidized or a out growth of the PLAN.  Europe subsidizes their builders too.  So if you are a buyer of ships do you buy ships twice (x3?) as expensive from your own yard or a yard that someone puts dollar bills on the hull.  As a business person the answer is very easy.  Plus you have a government contract to fill your yard with nice cost plus builds.  An if you need that yard to fix your own ship it is there with trained people. 

 

[Kirkhill]

NSPS companies should have their sister companies obligated to have X number of hulls built in country. Hearing companies complain of gaps in ship building and expecting the government to fill them, while purchasing hulls overseas at the same time is not kosher.

If we were building pipelines then we could afford to build a Norwegian style coastguard fleet of these  (Barentshav, Harstad, Alesund, Nornen)

Put more Vancouver and Victoria residents to work.
Create more berths for native and non-native sailors.
Make the seas generally more safe for everybody, including tourists and salmon fishers.
Permit the export of hydrocarbons safely.

Oh, and add tax dollars to BC coffers.

 

[Colin Parkinson]

Colin I understand your frustration.  But the two shipyards greater corporate brothers will never buy from the Canadian yards.  The whole ship building program was set up to build expensive, high margin ships for the government the end.  The federal government at that.  As the provinces are buying their ferry overseas.  This is a labour favor, job making and vote buy plan.  That the end products are ships are just a very lucky byproduct.  The sister companies buy their offshore because most ships are built at cost or below the already low cost in Asia or Europe.  Look at the three big Korean builders they are basically insolvent and merging.  The PRC builders are subsidized or a out growth of the PLAN.  Europe subsidizes their builders too.  So if you are a buyer of ships do you buy ships twice (x3?) as expensive from your own yard or a yard that someone puts dollar bills on the hull.  As a business person the answer is very easy.  Plus you have a government contract to fill your yard with nice cost plus builds.  An if you need that yard to fix your own ship it is there with trained people.

You can put extra import duties on any vessel that can be shown as capable of being built in our yards. So a cable laying ship would be exempt, but dumb barges would not, nor smaller tugs.

 

[MilEME09]

You can put extra import duties on any vessel that can be shown as capable of being built in our yards. So a cable laying ship would be exempt, but dumb barges would not, nor smaller tugs.

Probably why the NSPS has no mention of submarines, we can't build them, so it is not popular for the politicians

 

[Spencer100]

The government had import duties on ships for years.  They removed them so the provinces and business could buy ships cheaper.  Plus in most cases with Seaspan and Irving (as buyer and builder) they would just say our yards can't build those types of ships we build gov ships lol.  So your selective tax by type wouldn't work either.  And we have trade agreements with many of the ship building nations ie South Korea and EU.

So the best thing we can hope for is to get the yards up and building and hope that they can sell something to others.  I would think maybe give them an incentive to sell something to other countries or  companies may have a small change at working.  IE An AOPS to New Zealand. or a Ice Breaker to someone else. 

One of the thoughts is sell New Zealand on a T-26 let the three building counties compete on build and combat system.  You would have Irving/Lockheed vs BAE AUS/Saab vs BAE Britain.  BAE would be paid the design rights but each county would complete for the build.  It would take a ton of negotiation.  It maybe to hard but there will be three hot lines building it.  There maybe more customers waiting in the wings for the first one in the water too.

 

[Spencer100]

If we were building pipelines then we could afford to build a Norwegian style coastguard fleet of these  (Barentshav, Harstad, Alesund, Nornen)

Put more Vancouver and Victoria residents to work.
Create more berths for native and non-native sailors.


Make the seas generally more safe for everybody, including tourists and salmon fishers.
Permit the export of hydrocarbons safely.

Oh, and add tax dollars to BC coffers.

The way the election is going there we no pipelines ever!  Even with those protection ships built in Canada.  The environment movement wants to shutdown oil transportation so as to stop oil production in Canada.  Canada is to become one great big giant nature preserve that is true end goal.  I live in Ontario if I was in the west I would totally be thinking about ways around it.  Move the oil north to Valdez.

But I guess that is any other thread lol

 

[Colin Parkinson]

Test shipments of granular bitumen have already gone to Prince Rupert. Containerisation of previously bulk products such as Hydrocarbons and grains is really taking off and Prince Rupert is working hard to make that happen.

Absolutely BS that we can't build ferries here, I get that yards are busy, but with sub contracting to the smaller yard the vessels can be built at the same time. What the client like BC ferries need to do is planning the long term replacement of their ship, so perhaps work begins on a hull as the shipyard finds a lull in the rhythm of the NSPS contracts, such as your cutting shop or welders are underutilized, they can be working on parts of the ferry. once the hull has reached X point, smaller yards like Point Hope can work on the superstructure, accommodations and then ship it for assembly, which is how we built the Spirit Class.

 

[MarkOttawa]

After third OFSV built still an RCN Joint Support Ship, one CCG Offshore Oceanographic Science Vessel and another supply ship to be built before Seaspan can--likely in later 2020s--get to the other 16 ships Justin Trudeau has promised for CCG (in effect complete replacement, along with the six new icebreakers plus the polar one almost certainly for Davie, of whole fleet of large CCG vessels, our media don't yet seem to realize this: 1) https://globalnews.ca/news/5302516/justin-trudea-canadian-coast-guard-renewal/ 2) https://www.theglobeandmail.com/canada/article-ontario-shipyard-withdraws-complaint-alleging-federal-favouritism-2/):

Seaspan-Built CCG Ship Heads for Sea Trials

The future Capt. Jacques Cartier, the second of three Offshore Fisheries Science Vessels (OFSV) to be designed and built by Seaspan at its Vancouver Shipyards (VSY), began sea trials on October 10, 2019 from Seaspan’s Vancouver Drydock where final outfitting, set to work and commissioning has taken place since its launch in June.

“With the future Capt. Jacques Cartier headed out to sea today, excitement in our NSS program is growing,” said Mark Lamarre, CEO, Seaspan Shipyards. I” want to thank all our employees, partners and most especially our Coast Guard community for your teamwork and dedication in achieving this major milestone. We are looking forward to delivering this second vessel to the Coast Guard later this year, which will enable them to do their critical work focused on the protection, preservation and conservation of Canada’s coastal waters.”

This milestone on the second OFSV follows her launch on June 5 and the delivery of the first OFSV, the CCGS Sir John Franklin, on June 27. The CCGS Sir John Franklin is the first large vessel to be built and delivered under the National Shipbuilding Strategy...

The future Capt. Jacques Cartier, the second of three Offshore Fisheries Science Vessels (OFSV) to be designed and built by Seaspan at its Vancouver Shipyards (VSY), began sea trials on October 10, 2019. Photo: Seaspan Shipyard
https://www.marinelink.com/news/seaspanbuilt-ccg-ship-heads-sea-trials-471627

Mark
Ottawa

 

[Colin Parkinson]

Would have loved to gotten advance notice of the launch so we could get some of our Cadets to attend. How do you interest young people if you don't give them a chance to celebrate significant events like this?

 

[Cloud Cover]

That’s a stocky looking ship, lots of tonnage for her length.

 

[JMCanada]

Would have loved to gotten advance notice of the launch (...)
How do you interest young people if you don't give them a chance to celebrate significant events like this?

Fully agree. Good leaders care for their pupils.

 

[daftandbarmy]

Would have loved to gotten advance notice of the launch so we could get some of our Cadets to attend. How do you interest young people if you don't give them a chance to celebrate significant events like this?

You should send them a note to request a trip for the kids. Shame them as much as possible, of course

 

[MarkOttawa]

BC Ferries, along with almost all non-federal buyers in Canada, does smart thing (along with Damen which builds these in Romania):

Damen Snags Ferry Order from B.C. Ferries

Damen Shipyards Group has won a repeat order from B.C. Ferries for four additional Damen Road Ferries 8117 E3, also known as the “Island Class vessels”. The diesel-electric hybrid ferries follow two such vessels that the client ordered from Damen in 2017. The four new vessels will provide inter-island ferry services between Vancouver and Vancouver Island.

“The fact that Damen had designed the original two island class ferries for BC Ferries, positioned us well to start building very quickly," said Leo Postma, Sales Manager, Damen. "Also, having very nearly completed the construction of the first order at the time of the award of contract, we had personnel ready and experienced in the building of this type of ferry.”

BC Ferries is standardizing its fleet, and Damen specializes in the standardization of ships.

The Damen Road Ferry 8117 E3 is 81 m long, able to carry 300 passengers and crew as well as a minimum of 47 cars. The vessels’ hybrid fuel arrangement assists BC Ferries in its goal of improving environmental performance and, with the plan of evolving to full electric in the future, reduced operations costs.

The first two vessels are being transported aboard a semi-submersible heavy-lift vessel from Damen Shipyards Galati in Romania and are due to arrive in Canada end December [emphasis added].

Artist impression courtesy Damen.

https://www.marinelink.com/news/damen-snags-ferry-order-bc-ferries-472736

Mark
Ottawa

 

[MarkOttawa]

Still a bit more slippage for first A/OPS:

Delivery date for Canada’s first Arctic patrol ship pushed back again

The delivery date for the first Arctic and Offshore Patrol Ship (AOPS) built at the Irving Shipbuilding facility in Halifax has been pushed back once again, according to government officials.

The original delivery date was late 2018. In August, the Department of National Defence said it was hopeful its first vessel, HMCS Harry DeWolf, would be delivered by the end of 2019.

“It is now anticipated that delivery will occur in winter 2020, acknowledging that there remains some uncertainty,” said a statement from Andrew McKelvey, a spokesperson for the Department of National Defence.

Irving Shipbuilding was selected in 2011 to build two new types of ships for Canada — the Arctic and Offshore Patrol Vessels, and the larger Canadian Surface Combatants.

In February 2017, Kevin McCoy, the president of Irving Shipbuilding, spoke before a House of Commons standing committee and told government officials: “We expect to deliver the first AOPS, the future HMCS Harry DeWolf, at the end of 2018.”

Irving Shipbuilding now confirms the delivery will happen sometime in the first three months of 2020 [emphasis added].

“With the need to re-establish a supply chain, a new ship design, a new shipyard, and a new and growing workforce, there was always the intent to revisit lead ship dates in partnership with out customer throughout construction,” said a statement from Sean Lewis, communications director for Irving Shipbuilding.
New ships, new challenges

The government agrees that some of the issues have been the result of this being the first ship of its class.

“While there have been delays in the process, the shipbuilder has learned lessons from the build of the first ship that will help ensure efficiencies in the construction of subsequent ships,” said Jessica Lamirande, a spokesperson with the Defence Department.

Irving Shipbuilding is scheduled to deliver six patrol vessels, roughly one per year over the next few years. The government is not certain how the other ships’ schedules will be affected.

However, the government anticipates Irving will be able to catch up to its original schedule and deliver the sixth ship on time.

Two additional ships, based on the AOPS design, will be built for the Canadian Coast Guard after the initial six-ship fleet is completed [emphasis added--have not yet seen schedule for CCG vessels].

Overlapping build process

Even though the first ship has yet to be delivered, work is already underway on the second, third and fourth ships.

Irving launched the second ship, the future HMCS Margaret Brooke, into the Bedford Basin over the weekend. Like HMCS Harry DeWolf, there is still lots of work to do after the official launch.

Once each build is complete, Irving will send the ship for sea trials. It then will offer the ship to the government to do acceptance trials. Once the government is satisfied, the ship is officially considered delivered.

The future HMCS Harry DeWolf, seen alongside the Irving Shipbuilding facility in Halifax. The ship was launched in September 2018 but won’t be complete and delivered to the Canadian government until sometime next year. (Brett Ruskin/CBC)

https://www.rcinet.ca/eye-on-the-arctic/2019/11/12/irving-arctic-patrol-ship-delivery-halifax-ship-aops/

Mark
Ottawa