The costs for the first of 17 vessels to be built by North Vancouver’s Seaspan has risen yet again.
In 2008 the building of an Offshore Oceanographic Science Vessel was initially green light by the then Harper government for a total cost of 108-million-dollars.
The next year another 35-million was added to the cost and now another 30 million pushing the bill to over 170-million dollars.
Minister of Public Services and Procurement Judy Foote said the Harper government left them with a bit of a disaster.
“It was done several years ago and what we are finding in the course is that the costing and the methodology was such that it was unrealistic. So we had to really look at what the costs will be if you take into account inflation, you take into account all of the equipment, you take into account all the labour, which really increased the cost for the vessel.”
Foote also kept the door open to further increases in cost.
“From our perspective certainly you need to include costs of inflation. You need to include costs of equipment. You need to include labour costs when you are doing any kind of procurement. “
Foote says it is not that the costs are up but that the procurement process needs to be fixed.
“If there needs to be but we are working closely with Seaspan and with industry overall to make sure we get our costs right.”
She put the blame squarely on the Harper government who first tabled the national shipbuilding program.
“But again the numbers that would have been part of the initial shipbuilding procurement strategy would have been from the previous government. So we inherited a bit of a mess. We are working to try and fix that mess and we are working with our partners to do that.”
The vessel is supposed to be finished by next year.
The President of Seaspan is not ruling out more top ups in order to meet the requirements of a federal shipbuilding contract.
Brian Carter says Seaspan has given the federal government an honest assessment of what it would take to build these ships despite costs on the first vessel increasing by 65-million-dollars.
And Carter called the increasing costs an understandable situation.
“We design and build one ship at a time. With government budgets are set long ago. If there is a need for top up the minister addressed that I think well. In the meantime we are just hard at work here ensuring we are delivering best value for Canada.
Reporter “So you leave the door open then for more money coming in?”
“So that is a question for government.”
Carter says costs rise over time.
“It is not about us looking at the situation and calling it ugly at all. When we came into this situation it was our first look at the projects and we made an honest assessment of what we thought it would take to build these ships. Right now we are performing right to that estimate and working very closely with the Government of Canada to make sure they are getting best value.”
But wouldn’t Seaspan as a ship builder know how to budget the money and time to build a vessel?
“These budgets are not established by the shipyards, right? Or even informed by the shipyard.”
He says the first vessel will be complete next year and then the shipyard will churn out a new one every year after.