Mark Collins – Sticker Shock for RCN: Aussies Getting Supply Ships for Quarter of What We’re Paying

That’s because the Royal Australian Navy’s ships will be built in Spain whilst ours are to be built in Canada (see “Non-Combat Vessels for Coast Guard, RCN: The Curse of Seaspan Vancouver“):

Govt signs deal to build ships in Spain

The government has quietly signed a contract to build new navy supply ships in Spain, in a deal with $130 million worth of Australian content but not one job for an Australian shipyard worker.

The decision comes as further workers at the ASC shipyard in Adelaide face being laid off as work on air warfare destroyers winds up.

Amid accusations the government had failed to stand up for Australian jobs, Prime Minister Malcolm Turnbull on Friday [May 6] defended the decision, saying there would still be substantial Australian industry involvement.

“These vessels will be manned, they’ll be maintained in Australia, there will be a very large Australian input to them,” he told reporters in Sydney…

Under the deal, shipbuilder Navantia will construct two 19,500-tonne Cantabria-class oil tanker and supply ships [see here–that design was in contention for the RCN’s new Joint Support ships but lost out to the German Berlin-class] to replace existing supply ship HMAS Success and oil tanker HMAS Sirius, at a cost of $646 million [Oz dollar is about same as Canadian]…

In 2014, the coalition invited shipbuilders in Korea and Spain to tender for the two new vessels, ruling out Australian industry involvement on grounds of low productivity and absence of local capacity to construct such large vessels without substantial infrastructure investment [see Seaspan link at start of the post!].

Navy chief Vice Admiral Tim Barrett said the deal with Navantia meant the new vessels would be delivered sooner than anticipated – ship number one in 2019 rather than 2020-21 and ship number two in 2020 rather than in 2023-24 [meanwhile our first Seaspan-built JSS–and no construction contract has yet been signed–is notionally supposed to attain IOC only in 2020; meanwhile, irony of ironies, we’re renting from time to time a support ship from the Spanish navy to support the RCN’s east coast fleet]…

Now consider these costs. The Aussies are paying around $325 million per supply ship. Canada will be paying at least $1.3 billion for each of (likely) two JSS. That’s a lunatic four times as much for roughly similar vessels. But build in Canada we must and damn the budget torpedoes ahead for the Canadian Forces a a whole.

Bah. Humbug.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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4 thoughts on “Mark Collins – Sticker Shock for RCN: Aussies Getting Supply Ships for Quarter of What We’re Paying”

  1. On JSS the Spanish withdrew from the competition because the terms of doing business proposed by Canada were unduly onerous. Not so downunder.

  2. Post at Milnet.ca:

    “…
    One of the reasons the Australians are looking to have them built overseas is because it was too expensive & time consuming to have them built in Australia. (They are also in the process of renewing their fleet, similar to our situation.)

    There is no way that Canadian yards would have been remotely competitive [for Oz ships], when compared to the yards in Spain, South Korea, etc.

    As you are probably well aware, we – as in the Canadian taxpayer – will be paying anywhere from 3x to 4x the cost for a Berlin class AOR to be built here, compared to overseas. And quite frankly, in my own personal opinion, the work will be sub-par when compared to the work done by overseas yards.

    We couldn’t have lobbied for that contract. With the exception of Davies, we have some of the most non-competitive yards in the world.”
    http://milnet.ca/forums/index.php/topic,17282.msg1434397.html#msg1434397

    Quite.

    Mark Collins

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