The head of North Vancouver’s Seaspan shipyards is calling on the new Liberal government to take a long second look before continuing with a contract reportedly worth over $750 million that was directly awarded to a Quebec shipyard.
Jonathan Whitworth, chief executive officer for Seaspan, said he’s written to new Defence Minister Harjit Sajjan, saying his company is still interested in bidding on the contract, which he said Seaspan could complete for substantially less money than the Davie contract.
But Whitworth said Seaspan never got the chance to bid, because the previous Conservative government awarded the contract to convert an existing vessel to a navy support ship directly to Davie during the federal election “for political reasons.”
“This isn’t about sour grapes or we want more,” said Whitworth. “We have no problem winning or losing (in an) open, fair and transparent (process). We never got that opportunity.”
Events leading up to the fight over the massive contract began last year, when the federal government told shipyards it would need a stop-gap solution for a navy supply ship, after being forced to retire two existing ships earlier than expected.
Seaspan won the contract to build two new massive joint support ships under the National Shipbuilding Program several years ago. But those ships aren’t expected to be ready until at least 2020 – leaving the navy in need of a temporary solution.
Whitworth said major shipyards from across the country attended meetings with federal officials last year and Seaspan submitted a bid in June. Normally, Whitworth said, the government would short-list several companies for further discussion before making a final decision.
Instead, he said, Seaspan’s bid was met with silence until Ottawa announced in August it was signing a letter of intent to work directly with Davie – a deal finalized in October, pending cabinet approval.
The Davie shipyard was considered the biggest loser in the Conservatives’ National Shipbuilding Program, which awarded large umbrella agreements to build federal ships to Irving Shipyards in Halifax and Seaspan on the West Coast.
Whitworth said Friday he doesn’t have a problem with other shipyards winning contracts, but added those contracts must be handled fairly.
He added Seaspan’s proposal involved converting a container ship into a supply vessel in the company’s Victoria Shipyards, while work on the new federal ships continues in North Vancouver.
Work on the first of three federal ocean fisheries vessels is currently underway at the local shipyard. “We have 15 of the 37 blocks already under construction in the yard,” he said.
Seaspan and Ottawa inked a $687-million deal for those ships in June, almost three times the project’s originally estimated cost of $244 million.
Whitworth said the expansion of that budget was to be expected, since estimates date from 2004.
“Every car that is purchased today is more expensive than it was 10 years ago,” he said.
Some of the biggest question marks between Seaspan and the federal government concern construction on the new joint support ships.
In 2013, both the parliamentary budget officer and the federal auditor general raised questions about whether the $2.6 billion set aside by Ottawa will be enough to build the two ships.
Design and engineering work on that project is currently underway and the first of those ships is scheduled to be completed in 2020. That will mean a construction contract must be signed next year.
Whitworth said he’s not worried about that. “We have not been told or have any reason to believe that we’re deviating from that schedule.”
