Chief Stoker said:
That's the PBO estimate is it not. I don't know if it justifies the extra cost but JSS has 2 props/ 2 engines vice Asterix's one, degausing gear, RORO deck, NBCD Citadel, íce edge capability, not to mention its a brand new ship and not a 10 year old conversion. Davie fails to mention all of that in their brochure it appears. Keep in mind that the 650M is for a 5 year lease, with a possible another 5 years and the purchase price that won't be cheap.
This is the second time you quote numbers without source, and I would say, obviously without any knowledge of what is in the contract. To compound that, you also misinform on technical aspects.
Lets deal with contractual matter first. And I will confess: I have not seen or read the contract either - but I have negotiated and drafted that type of contract before and they are fairly standard (this Davie proposal may have been "novel" for dealing with government procurement, but it is done on a daily basis in industry), and I have access to specialized publications.
You are correct that the 2.1 B$ id the PBO figure - Davie says so on its own slide. The true cost could be higher - we won't know until the contract is let out and final tallying of the costs done. But just this week the government let out a 250 M$ contract to Seaspan just to do the final and detailed drawings on the new PROTECTEUR class. That is not giving me fuzzy feelings.
On the Davie side, you will note that they call the $650M "sail-away" cost. That is contractual term of art: It means that is the cost to Canada to buy the ship right now, as is, if they wanted to. So it is the true and final cost of the ship.
But it is a lease, which includes more than just the ship. It includes the salaries of 54 merchant mariner (36 at all time x 1.5 to get the industry standard rotation of personnel), the whole mechanical upkeep, maintenance repairs and risks associated with unforeseen breakdowns, together with full management of the platform, plus wharfage, pilotage and tugs costs, you can look up the list of what Federal Services will do as included in the cost in the slides. How much would all of that cost the RCN every year? You have to deduct that from the overall lease cost. Then you have to deduct the annual financing cost of Davie/Federal services (they incurred the $650M charge for building the ship, but recover partially year to year, so the "loan" has a rate of return - since it is a"loan" to the Government of Canada, that rate is likely lower than the market rate).
Now, the info I have seen on the contract states overall total lease payments of $540M for five years and $700M for ten years (option exercised). Based on my knowledge of such contracts, a back of the envelope calculation at full market rate would leave an acquisition payment of approximately $200M after five years and $120M after ten.
On the technical side now, and my first comment is not addressed to you alone here, but to the many people who still insist on calling the PROTECTEUR's JSS's. They are NOT JSS, the idea of JSS was abandoned after the first round in the early 2010. They are AOR's. This, BTW means that the new PRO will NOT have any RO/RO capability whatsoever. Those were original JSS requirements that were dropped all together. Second, the "edge of ice" thingy is an alleged requirement of the RCN that was purely imagined by it because they know dick about merchant ships. There is no such capability. All merchant ships can operate at the "edge" of an ice pack, and in fact, all can get into some ice - a lot more ice than the frigates or MCDV's, and yet those two types of ships go up in the Arctic at the "edge of ice" all the time. In fact, right now, there are about 20 large merchant ships pushing their way through the ice of the Gulf of St-Lawrence and the River, all the way to and from Montreal, in more ice than the PRO's will ever encounter at the "edge" of Arctic ice. None (well, maybe one or two) of them have had any modification whatsoever made to their design in order to be able to get into that ice.
Finally, Asterix was five years old (launched in 2010) when acquired by Davie. So, at the end of the first five year, she'll be 13 years old, and at the end of the ten years, she'll be 18 years old. No big deal, especially when you consider that it is only the hull that is five years older at the time davie acquired it: They stripped her interior of everything else, rebuilt the main diesel engine completely, put all brand new bow auxiliary propulsion system and all brand new generators, and all other electrical and mechanical equipment. The difference with a brand new built is insignificant and she is all new for all practical purposes. Besides, the cost of that "used" hull is part of the $650M sail-away cost.
