Shipyards get into shape

From today's Halifax Chronicle Herald.
There is nothing added that is new, but does talk about the proposed new way of building government ships in Canada. For all of the men and woman that are babying the senior citizens of the government fleet along, this is all good news that there will be new ships.

Federal funding will see workers through to 2017
By TOM PETERS, Business Reporter, Halifax Chronicle Herald

Is there a glimmer of hope that Canada’s shipbuilding industry is getting the federal government attention it has been demanding for the past several years? Or is the government of the day making announcements in response to constant industry pressure or the possibility of a fall election?

On Sept. 2, Fisheries and Oceans Minister Gail Shea announced that Irving Shipbuilding Inc. had been awarded a $194-million contract to build nine new mid-shore coastal patrol boats at Halifax Shipyard for the Canadian Coast Guard.

In her remarks, Ms. Shea said the funding for the program was announced in the 2007 federal budget.

However, politics being what they are, a spokesman for Geoff Regan, the MP for Halifax West, said Mr. Regan announced the money for coast guard ships in March 2005 when he was minister of fisheries and oceans.

"I am very pleased that the Canadian Coast Guard will be receiving $276 million over the next five years to acquire six new vessels," Mr. Regan said in a news release at the time.

"This will involve the acquisition of two fisheries research vessels and four mid-shore fisheries patrol boats."

He also said that in addition to the $276 million for six boats, the coast guard is also receiving funding for the acquisition and operation of four new mid-shore patrol vessels that will be used for security on the Great Lakes and St. Lawrence River in a joint operation with the RCMP.

We’ll let the politicians argue over the potential political gains but from an industry perspective it appears the job is finally going to get done.

Coupled with the work already assigned to the Halifax Shipyard, a lot of shipyard workers are going to have steady employment until 2017 on federal projects. The mid-shore boats will be a four-year deal and the frigate life-extension program, a $549-million program, will last until 2017.

There is also a third major project in the yard, construction of an offshore support vessel for Encana’s Deep Panuke project.

The announcement of the mid-shore patrol boats for Halifax may be an indication the federal government is listening to an idea for project allocation.

Andrew McArthur, former vice-chairman of Irving Shipbuilding Inc., and now an industry consultant, has for the past few years been promoting the idea of allocating federal contracts to shipyards that are suited to certain projects. It is a program that has been done in other countries.

Halifax, for instance, is suited to the construction of small- to mid-sized vessels and the Davie shipyard in Quebec may be better suited for a large ship like a joint supply vessel.

Peter Stoffer, federal NDP shipbuilding critic, likes the allocation idea but says the "fly in the ointment would be, would the taxpayer be protected?"

He thinks they would be "as long as there is proper audit control by government on these yards and they agree the work is done in accordance to the contract and we get the best ship for the money."

And the allocation process would bring some stability to the industry, and as Mr. McArthur has pointed out in the past, it would eliminate the peaks and valleys in the flow of work.

Now looking at what ships need to be built on the federal agenda, about $40-billion worth, the allocation process could keep yards busy.

The need-to-do list includes Arctic patrol boats, joint support ships for the navy, a new big icebreaker for the coast guard, government ferry boats (renewal of the Marine Atlantic fleet), plus others.

The federal government also says it needs about 60 smaller boats and barges, work that could be shared with smaller boat yards. Then, of course, there will be ongoing maintenance and refit work.

On the private commercial side there is also a great need for many new vessels of various shapes and sizes. If the federal government implements some financing suggestions from industry to make Canada a competitive place to build a boat, shipyards could bid on private contracts and intersperse that work with federal procurement.

The potential for a long-term, viable industry appears to be there, but it does require that government and industry co-operate on a business plan.

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