New Canadian Shipbuilding Strategy

[YZT580]

Liebererals doing what they do best!  Making it look like the cons. were out to lunch, apologise to the navy because they can't be given what they need or maybe even cancel the whole thing after the current batch are constructed thus freeing up cash to fund their favourite project: themselves.

 

[PuckChaser]

I don't think they'll cancel anything that dumps money into Halifax. They need to pay back the support from the election, so they're best way is to dump cash into the porkbarrel that is Irving, regardless of the quality of ship we get. We'll end up with something that costs as much as a Zumwalt, but performs like a Tribal.

 

[Pat in Halifax]

The sums being discussed include the maintenance, crewing, fuel etc for the vessels over their lifespan.  If you were to project the cost of insurance, fuel and maintenance for that new car you just bought, it wouldn't look so attractive either.  It's all how's the data is being presented that makes the eye's bulge.  In the end, at the completion of 30 years it will still be $1B per year that would have  been spent anyways when the fuel, crewing and maintenance was accounted for.  Don't get all caught up in the spin that some would like to mislead the general public on.

So VERY true......

 

[Underway]

It doesn't really matter what the costs are at the end of the day for ship numbers.  Even if they order less ships.  At the end of the day as soon as that last ship is in the steel cutting phase then they will have to order more ships.  Unless they want to go back to the boom bust cycle and cost taxpayers even more at the end of the line.  That's the rub. 

A continual build program means just that, continual build.  I'm not worried about the number of ships.  Then when number 8 is being built they will look at replacing something else to keep the yards going.  If they don't... then that signifies a complete 180 in the government's shipbuilding strategy long term.  Good luck losing Atlantic Canada votes as all the parties are interested in keeping the yards going.  The mil industrial complex will work in our favour for once.

I am worried about the capability of those ships if they focus on numbers.  That's where the real issue is.  If there is a significant loss in capability or an inability to do the job required then that in many ways is more important.

The other thing is if they order say 11 ships, then add on 6 more as a separate contract you will see the real cost of a ship building program as the start-up costs are no longer in the price tag.

 

[Good2Golf]

So VERY true......

Concur. [Edited clarification: I mis-read the conversation and thought that folks were discussing the overall construction/acquisition costs (I agree closer to $30B, at least) upon which one must then add out-year P, O&M -- this total amount will be large (100's of B likely, over a third of a century), but much of the P, O and (little) M, i.e. non-ISS 'M' and would be, less inflation applied, the same P, O&M as the Gov't would be spending on 3xDDH and 12xCPF]

JJT is bang on about the importance of understanding what is included within a "cost [figure]."  Most people wouldn't believe how expensive the average ~$30k-ish family car is over its average 8-10 year lifetime...a lot more than the $30k, that's for sure. 

Be clear about what period over which the capability will be supported and including what elements, and the numbers, while large, will appear more acceptable in context.

By comparison, over the same 40-year period, the Federal Government will have spent $3,284B* (current year dollars), or more than the cost of having National projection of Naval force around the world, on personal transfers alone (OAS, CPP, EI, Child xfrs, etc...)

:2c:

G2G


* Ref: 2015 Budget breakdown 

 

[Edward Campbell]

It doesn't really matter what the costs are at the end of the day for ship numbers.  Even if they order less ships.  At the end of the day as soon as that last ship is in the steel cutting phase then they will have to order more ships.  Unless they want to go back to the boom bust cycle and cost taxpayers even more at the end of the line.  That's the rub. 

A continual build program means just that, continual build.  I'm not worried about the number of ships.  Then when number 8 is being built they will look at replacing something else to keep the yards going.  If they don't... then that signifies a complete 180 in the government's shipbuilding strategy long term.  Good luck losing Atlantic Canada votes as all the parties are interested in keeping the yards going.  The mil industrial complex will work in our favour for once.

I am worried about the capability of those ships if they focus on numbers.  That's where the real issue is.  If there is a significant loss in capability or an inability to do the job required then that in many ways is more important.

The other thing is if they order say 11 ships, then add on 6 more as a separate contract you will see the real cost of a ship building program as the start-up costs are no longer in the price tag.

I agree ... in so far as the strategy involves ships at all it, it means a steady flow of ships so that the capability remains intact ... that may mean that the Navy gets its ships in batches rather than in complete sets of one class; think about the St Laurent, Restigouche and Improved Restigouche classes (the Restigouche and Improved Restigouche classes were, really, batches that could have been designated as Improved St Laurent) designed in the 1940s and, laid down starting in 1950 and launched between 1951 and 1957, but, for the 21st century, stretch that to, say, ten or 15 years for three batches of, say three or four ships each.

 

[jmt18325]

The sums being discussed include the maintenance, crewing, fuel etc for the vessels over their lifespan.

The $30B is just for construction.

 

[Kirkhill]

The $30B is just for construction.

And in my mind that is where the entire Canadian programme falls flat.  I still can not find somebody that has convinced me that 15 Huitfeldts could not be built for 4.5 BCAD (300 MCAD apiece) with an additional 100 MCAD apiece for every AAW suite put aboard. Nor why the AOPS can't be built for 100 MCAD apiece or a Holland Class OPV for a similar price.  In my humble opinion there is some serious jiggery-pokery going on with the books on all Canadian procurement projects.

Right now, I would be taking all the weapons scavenged from the Tribals and the AORs and putting them in STANFLEX buckets as a completely separate project and then designing all of the MCDVs, AOPSs and CSCs to accomodate those modules.    That would relieve those projects from carrying a new weapons budget.

The weapons could be upgraded independently, acquiring limited numbers of 5" guns, 35mms, RWS systems, new torpedo systems, lasers, rail guns, what have you.

 

[jollyjacktar]

The $30B is just for construction.

It is what I stated, which came from a Town Hall meeting I attended from the very top...

 

[FSTO]

I agree ... in so far as the strategy involves ships at all it, it means a steady flow of ships so that the capability remains intact ... that may mean that the Navy gets its ships in batches rather than in complete sets of one class; think about the St Laurent, Restigouche and Improved Restigouche classes (the Restigouche and Improved Restigouche classes were, really, batches that could have been designated as Improved St Laurent) designed in the 1940s and, laid down starting in 1950 and launched between 1951 and 1957, but, for the 21st century, stretch that to, say, ten or 15 years for three batches of, say three or four ships each.

I know I keep beating this :deadhorse: but man if the collective (government, politicos, Navy and CF) hadn't had their heads so deeply buried in the sand we could have addressed this entire issue when HMCS OTTAWA sailed away from Saint John. Water under the bridge I suppose, but this has to be the LAST time we build an entire industry from scratch.

 

[MarkOttawa]

Posted by: jmt18325 Today at 14:14:22 »

Quote from: jollyjacktar on Yesterday at 20:30:01

The sums being discussed include the maintenance, crewing, fuel etc for the vessels over their lifespan.

The $30B is just for construction.

This is what the Navy said in 2010:

...In August, Vanguard spoke with Rear Admiral (Ret’d) Ian Mack, National Defence’s Director General for Major Project Delivery (Land and Sea) about the navy’s shipbuilding program...

Canadian Surface Combatant

The most anticipated vessel in the new wave of shipbuilding is the Canadian Surface Combatant, the 15 ships that will replace the current mix of destroyers and frigates. With acquisition costs of about $26 billion and in-service support estimated at almost $15 billion over twenty years, these ships will be Canada’s military presence on the world’s oceans...
http://www.vanguardcanada.com/2010/09/01/new-fleet-sight-canadian-navy-builds-tomorrow/

I.e. $41 billion total estimate then over 20 years--so $30 billion is hardly lifetime cost.

Mark
Ottawa

 

[jollyjacktar]

The $30B is just for construction.

This is what the Navy said in 2010:
I.e. $41 billion total estimate then over 20 years--so $30 billion is hardly lifetime cost.

Mark
Ottawa

That included the other classes of vessels.  The monies being discussed here by me are strictly for the CSC.  As I said, I am repeating what was told to us in a Town Hall from the very top.

 

[AlexanderM]

And in my mind that is where the entire Canadian programme falls flat.  I still can not find somebody that has convinced me that 15 Huitfeldts could not be built for 4.5 BCAD (300 MCAD apiece) with an additional 100 MCAD apiece for every AAW suite put aboard. Nor why the AOPS can't be built for 100 MCAD apiece or a Holland Class OPV for a similar price.  In my humble opinion there is some serious jiggery-pokery going on with the books on all Canadian procurement projects.

Right now, I would be taking all the weapons scavenged from the Tribals and the AORs and putting them in STANFLEX buckets as a completely separate project and then designing all of the MCDVs, AOPSs and CSCs to accomodate those modules.    That would relieve those projects from carrying a new weapons budget.

The weapons could be upgraded independently, acquiring limited numbers of 5" guns, 35mms, RWS systems, new torpedo systems, lasers, rail guns, what have you.

Exactly!! Even 1 to 1.3 billion each would be fine and we would essentially have 15 destroyers, even if we call some of them Frigates. Yet with Australia spending 3 billion each on the Hobarts, Irving can't get in on that action fast enough and they'll say it justifies the numbers. Someone in the government has to have the intelligence to put a stop to this nonsense.

 

[MarkOttawa]

It seems very clear to me that these words refer only to the CSCs:

...With acquisition costs of about $26 billion and in-service support estimated at almost $15 billion over twenty years, these ships...

Indeed the article gives this separate costing earlier:

...
Arctic Offshore Patrol Ship

Canada will buy as many as eight ships to patrol the North. Initial costs will be about $3 billion, with another $4.3 billion for operations and maintenance over 25 years of operations...

And this is what the Auditor General stated in the 2013 Fall Report (Exhibit 3.3):

...The estimated acquisition cost is $26.2 billion, net of GST, and the estimated cost for personnel, operations, and maintenance is $64 billion for 30 years [maybe personnel and ops costs were not included in 2010 in-service support estimate of $15 billion]...
http://www.oag-bvg.gc.ca/internet/English/parl_oag_201311_03_e_38797.html#hd3b

The government saw the report before it was issued and could have corrected those figures.

Mark
Ottawa

 

[Colin Parkinson]

When the last AOP's slides down the ways, is when they should be starting to replace the MCDV, with focus on what the AOP's are not good at or to big to do.

 

[Stoker]

When the last AOP's slides down the ways, is when they should be starting to replace the MCDV, with focus on what the AOP's are not good at or to big to do.

The MCDV's are not being replaced by AOPS.

 

[Colin Parkinson]

You misunderstood what I said, is that when the AOP's are all constructed and in service, the program to replace the MCDV's should be underway with steel being cut, hopefully as the last AOP's slides down the ways. the MCDV's appears to the jack of all trades for everything the Halifaxes won't/can't do, I suspect the AOP's will do some of what the MCDV's do now and that means you might be able to refocus the design.

 

[Stoker]

You misunderstood what I said, is that when the AOP's are all constructed and in service, the program to replace the MCDV's should be underway with steel being cut, hopefully as the last AOP's slides down the ways. the MCDV's appears to the jack of all trades for everything the Halifaxes won't/can't do, I suspect the AOP's will do some of what the MCDV's do now and that means you might be able to refocus the design.

Understood. MCDV's will refocus their efforts on MCM but still will deploy to the Caribbean and the Arctic with AOPS according to the new concept of class document that was just released.

 

[Colin Parkinson]

Going back to cost, the costs to rebuild the industrial capacity should be cleaved off the cost of actually building the ships, so everyone know what is what. That industrial rebuilding should be costed against Public works or a similar department and the actual ship construction and outfitting costs to the DND.

 

[Kirkhill]

Going back to cost, the costs to rebuild the industrial capacity should be cleaved off the cost of actually building the ships, so everyone know what is what. That industrial rebuilding should be costed against Public works or a similar department and the actual ship construction and outfitting costs to the DND.

:bravo:

But wasn't there some debate a while back about how that would play with WTO rules?  Could a publicly funded shipyard compete internationally for commercial contracts?  If it were a nationalized shipyard devoted to military procurement could it sell to anybody other than its own and other national governments?  I believe that is part of the weird calculus that sees up building a capability on the back of very small Navy.

Take a look at the AORs.  Davie, Seaspan and Irving all have yards that could manage the conversions, and I am willing to bet, increase the delivery rate once the kinks have been worked out, but the government is only willing to supply the cash to build 1 to 2 ships a year.  That burn rate has permitted ISY and Seaspan to figure out a business plan that will amortize their initial capital outlay over the life of the NSPS. 

They could build more, faster, if the money was there faster.  But the money is/was coming at the planned rate and that rate had to accommodate the need to create the industry.

Don't get me wrong.  No sarcasm here.  I agree entirely with the sentiments.  I am just not sure about the practicalities after the international trade lawyers and the government accountants get through describing the rules of the game.