Wednesday, 15 June 2016

Judy Foote and the case of the missing announcement

News flash - there was no “shipbuilding announcement”

Public Safety minister Judy Foote and the Liberals announced two days ago that they were going to streamline the shipbuilding process for Canada’s new Single Surface Combatant warship. They would achieve this with the masterly frugal plan of purchasing an off the shelf plan. This in obvious contrast to those crooked Conservatives who didn’t budget enough money to pay for, or design these ships.

This sounds great!

Here's the catch though, Minister Foote announced nothing, and her jabs at Conservative overspending were baseless. Let me explain why.

See, what really happened was the Liberals opened a backdoor the Conservatives had already left in the shipbuilding plans. Before we get into what the actual plan was before the Liberals rebranded it we should look at the obvious political fodder in the situation. 

Since after all i’m a self proclaimed conservative pundit the question is, who have the Liberals put out of a job with this move? One can assume that if Canada has decided to purchase a warship plan off the shelf as opposed to designing one ourself, there is at least one ship designer who has been put out of a job. 

Well actually there isn’t. The contract as it was awarded never contained design elements for the Single Surface Combatant Vessels (SSCV). Irving Shipyards was to be the sole contractor of the SSCV and of Canada’s new Arctic Offshore Patrol Vessel (AOPV), but this simply gives the company sole right to construct the vessel, hire labour, hire subcontractors and so forth - this does not implicitly give Irving input on the design. The move to award sole contractor status was marred in controversy when it was decided, but changing Irving's status was never even hinted at during Judy's announcement.

Image result for svalbard class
(The Norwegian Svalbard class left,
The Canadian "DeWolf" class right
after $288 million in modifications)
As far as design work goes, Irving did have at least one "design" contract for the smaller ship, the AOPV. Well, this isn't totally true, the AOPV current being constructed in Halifax is not designed by a Canadian (or a Canadian firm). It is a heavily modified version of the Norwegian Svalbard class of Offshore Icebreakers.

As I mentioned the AOPV project was mired with controversy. The cost of the off the shelf Svalbard plans was about $5million. The cost to modify or redesign these plan for Canadian purposes was a staggering $288million. An amount no one could figure out. However since these ships are already being built there’s not a lot the Liberals can do except pay huge penalties for backing out, forcing themselves to find a new contractor, and continue Canada's embarrassing gap in the resources needed to secure our Arctic region. This is likely why the issue of the AOPV cost is being ignored, the Liberals can not afford to stop the ball rolling economically and strategically. Since they have to announce something or fear being out of the media for a few hours, they need a problem to solve. Their new boon to undoggle is the cost of the SSCV.

(Irving Shipyard - A single hall for large ship
construction - with multiple land based points for final
construction on smaller ships)
When Ms. Foote announced that not only would buying off the shelf plans save money, but it could also shave two years of the design process, allowing new warships to begin construction by 2020 - I had to scratch my head. This was exactly what the plan was the whole time… The AOPV weren’t slated to be completed until 2020. The life extension program for the Halifax class frigates completed by the conservatives meant the ships could last till about 2020-2025. So isn’t beginning construction by 2020 exactly what had been planned the whole time? Yes. The Irving shipyard is big, but it simply cannot lay down multiple vessels the size of the SSCV - by its very design.

As far as the design goes, the Conservatives were pragmatic. They gave Irving a piece of the pie in the form of redesigning the AOPV plans (some say this is an inexplicably big amount but that’s another article) but they left the largest of the design contracts (the ones for our new SSCV) up in the air. Designing your own ships is a great move if the economic conditions permit it. It develops high level industry in the home state, and allows for revenue from selling plans. However it is costly. This is why the conservatives likely didn’t double down on the design contracts with Irving. As there was no announcement of SSCVs specifics and no design element awarded for that contract whatever government is in power has the freedom to develop new designs and sell them, or make an economically pragmatic decision and opt for the  cheaper off the shelf option.

This brings us back to Judy Foote’s announcement, which if you’ll remember was that Canada will “streamline the process” of our SSCV by buying off the shelf plans… ok, but which ones? That was always one of two possibilities Judy, you haven’t really said much except you are picking the cheaper solution.

So in short, the Liberals have announced: 

  • They will spend less money on the Military than the conservatives, they will do this by outsourcing design of the SSCV. 

  • Minster Foote also gave us a timeline - that construction of the SSCV would start by 2020(ish)

Here's my observations, organized in the same way:

  • The Liberal Party of Canada slashing military spending is hardly a surprise to anyone.

  • The AOPV redesign cost as i've already pointed out, makes the purchase of off the shelf plans as a "frugal" move, suspicious at best.

  • The timeline announced was exactly the same timeline that we’ve always had. The AOPV can’t be finished any sooner, that is without reducing the numbers (a move I predict will happen before 2020). Our current frigates will last till about 2025, like they were planned too four years ago. 

So basically what we got was an announcement that went like this:
The Liberals are happy to (continue to) overpay for the $288million dollar design of the “off the shelf” Arctic Offshore Patrol Vessel. They are not going to overpay for our Single Surface Combatant Vessel like the (scary old) Conservatives were. The ever frugal Liberals will purchase off the shelf plans (and presumably not pay $288 million to redesign said plans) allowing construction of the Single Surface Combatant to begin in about 2020… exactly when it was planned. 

Great announcement Judy! 
Keep it up!

No comments:

Post a Comment