Shipbuilding contracts

[Guest Derek L]

Apparently it's going to be a very large operation, and DART and units in Comox and Trenton were stood up last night.

Yup and along with the urban SAR folks from Comox & aircraft from Trenton, you'll probably start seeing civilian SAR organizations hitching a ride.

[Smallc]

It's too bad the CH-147s haven't reached IOC yet (I don't think they have, there are only 6 of them in Canada). I think they could have been useful here.

[Guest Derek L]

It's too bad the CH-147s haven't reached IOC yet (I don't think they have, there are only 6 of them in Canada). I think they could have been useful here.

Yup 450 THS isn't In the position to generate deployable forces yet…..Of course if required, we could always send Griffons…..Even then though, I’m sure MAG 24 & 36 have it covered.

[Guest Derek L]

Well there you go:

http://www.cbc.ca/news/world/typhoon-haiyan-survivors-in-philippines-desperate-for-aid-1.2422113

Foreign Affairs Minister John Baird said Prime Minister Stephen Harper has directed that Canada's Disaster Assistance Response Team — an arm of the Canadian Forces that provides humanitarian aid — will deploy to the Philippines.

Baird said an eight-member advance team will arrive in the typhoon zone in coming hours, while another 35 to 50 personnel will leave Monday night on a C-17 from CFB Trenton with much of their equipment.

The Americans:

http://swampland.time.com/2013/11/11/u-s-marines-bringing-typhoon-aid-to-philippine-shores/

They arrived in the hard-hit city of Tacloban Monday afternoon. “Roads are impassable, trees are all down, posts are down, power is down,” Marine Brigadier General Paul Kennedy, the commanding general of the Okinawa-based 3rd Marine Expeditionary Brigade, told reporters. “I am not sure what else is there. I am not sure how else to describe this destruction.” Another 180 Marines are en route, U.S. officials said, and the Pentagon is standing by for expected requests for additional aid from the Philippine government.

And even:

http://www.bbc.co.uk/news/uk-politics-24906526

The UK will send a Royal Navy warship to help deal with the storm disaster in the Philippines, Prime Minister David Cameron has announced.

He said HMS Daring would travel "at full speed" from Singapore and an RAF C-17 transporter plane will be sent.

Mr Cameron, addressing business leaders in the City of London, added that UK aid following Typhoon Haiyan would be increased from £6m to £10m.

From Down Under

http://www.smh.com.au/federal-politics/political-news/julie-bishop-pledges-10-million-to-the-philippines-after-typhoon-haiyan-20131111-2xbku.html

About $3 million will be spent through Australian non-government organisations and $1 million will go towards the deployment of an Australian medical team.

The medical team will fly out of Darwin on Wednesday on an Australian Defence Force C17.

So here's countries from all over the planet helping out, but from a short distance across the South China Sea:

http://www.slate.com/blogs/the_world_/2013/11/11/amid_ongoing_tensions_china_s_aid_to_philippines_dwarfed_by_other_countries.html

China’s foreign ministry says the country will provide $100,000 in cash and “humanitarian emergency relief assistance” to the Philippines, following the devastation of Tyhpoon Haiyan

[Topaz]

The latest figures are out and its 100Billion for ships for the Navy and they will be built in Canada and give jobs to Canadians and this is over a 30 year period. Well, by the time all the military gets their equipment, I wonder will there be any money to pay the personnel. Keeping up with tech. is quite expensive, maybe this will help have countries talk more and less wars. http://www.theglobeandmail.com/news/politics/ottawa-estimates-new-warships-to-cost-more-than-100-billion/article15407360/%C2'>

Edited November 13, 2013 by Topaz

[Topaz]

Again, the link won't work and I don't understand why it works here and not above. http://www.theglobeandmail.com/news/politics/ottawa-estimates-new-warships-to-cost-more-than-100-billion/article15407360/

[Smallc]

That figure includes all costs including personnel, the same as with the high figures for the F-35. Read your own link.

That said, what would you have us do instead?

Edited November 13, 2013 by Smallc

[Guest Derek L]

That figure includes all costs including personnel, the same as with the high figures for the F-35. Read your own link.

That said, what would you have us do instead?

And surprisingly those figures don’t seem all that bad….as I was speculating earlier in this thread in post # 263:

http://www.mapleleafweb.com/forums/topic/19645-shipbuilding-contracts/page-18

I will say this though, as I’ve alluded to in the first couple of pages back in 2011, once the same accounting methods are applied to the shipbuilding program as was done with the F-35 (Operating costs, training, maintenance etc) and projected over the life of the ships (35-45ish years) the total costs will be in the 100s of billions. For example, for our military to operate a fighter force, both CF-188 and the eventual F-35, cost ~1-1.5 billion a year, or ~5% of our currently allocated Defence budget. Once we examine the operating costs associated with nearly the entire Navy, I would estimate (and being on the low side) that will eat somewhere between 20-30% of our Defence budget (and quite possibly higher)…….Just a fingers and toes estimate would see ~4-6 billion a year, over say 35 years plus the ~35 billon associated with purchasing the ships, for a total somewhere in the ~$175-250 billion range over a 35 year lifespan………Like I said earlier, the Liberals and NDP have yet to make any real political hay over this……..

Now the Globe piece figure of ~105 billion to me, still seems relatively low and I wonder if these are costs directly related to the individual ships, fore if they are, all the rest of the budget allocated to the Navy is moot, fore things like bases, training establishments, personal with shore postings and the costs associated with the Kingston’s, Victoria class and all the auxiliary vessels should be (IMHO) be included if we're going with this method of budgeting.

Simple concept really, if we don’t have the replacements as allocated under the shipbuilding program, what is the point in having the rest of the RCN’s fiscal commitments?

[Guest Derek L]

Where I do find potential for trouble is that the Government has appeared to have fixed the price for each ship prior to having a mature design, as opposed to a more traditional method of building the first vessel “cost plus” and identifying areas of savings for the follow on ships of the class. In essence, setting a fixed price, prior to a mature design will only lead to cost increases and in turn, less ships for the same amount of money……..Case in point, the reduction in numbers from 4 to 2 AOR…..or the promise to build “6-8” AOPS…….

Clearly if from the onset there is a need for 4 AORs and 8 AOPS, we should build 4 AORs and 8 AOPS. This does not mean we should give the builders a “blank cheque”, but have realistic expectations that difficulties and design changes will occur, as such (and within reason) we should be prepared to “work out the bugs” with the lead ship in each class.

And in related news:

http://www.edmontonjournal.com/news/2013-budget/Coast+guard+icebreaker+cost+twice+much+originally/9162301/story.html

The budget for the CCGS John G. Diefenbaker has stood at $720 million since Prime Minister Stephen Harper announced the government’s plans to build the icebreaker during a trip to the Arctic in 2008.

But coast guard spokeswoman Melanie Carkner says that figure was based on old estimates and the budget has been revised up to $1.3 billion to ensure the Diefenbaker is able to perform the tasks that will be required of it when it comes online.

And to follow, likely after the election:

Budgets set for the Diefenbaker as well as the navy’s new frigates, destroyers and resupply ships were done so years ago, when those projects were in the very early stages and before many of the projects were delayed.

As a result, there have been fears both inside and outside government that the money set aside for the shipbuilding plan isn’t enough to get the coast guard and navy what they actually need.

And as I’ve been saying in this thread for some time, I doubt we’ll get all of the planned vessels or vessels with the capabilities that we will require……As such, we either accept the trend that has befallen all Western Navies over the last decade+, reduced numbers or add more money.

[Smallc]

After 2015 I don't think adding more money will be a problem.

[Guest Derek L]

After 2015 I don't think adding more money will be a problem.

Exactly, there won't be direct movement on the new ice breaker or surface combatants till near the end of this decade……I hope at such time, and more so with the more expensive combatants, they revisit the prospect of international involvement in the program or look to partitioning the fleet (like the MN currently and likely the RN in the near future) into a high-medium-low capability set of vessels……To me that seems the only reasonable compromise versus a reduction in numbers and/or capabilities.

[Smallc]

Well, the media is blowing this out of proportion too....

The price tag has ballooned to more than four times what it originally was...yeah...no....

Edited November 14, 2013 by Smallc

[Guest Derek L]

Well, the media is blowing this out of proportion too....

The price tag has ballooned to more than four times what it originally was...yeah...no....

Sure they are, and in time, so will the Federal Liberals and NDP (as I've been predicting here for the last several years)......Just wait till Ferguson's findings are made "public".......the next faux scandal no doubt.

[Guest Derek L]

Sure they are, and in time, so will the Federal Liberals and NDP (as I've been predicting here for the last several years)......Just wait till Ferguson's findings are made "public".......the next faux scandal no doubt.

And here we go:

http://o.canada.com/news/governments-38-billion-shipbuilding-plan-doesnt-have-enough-money-auditor-general-to-report/

In particular, the government will be warned that it must either increase the amount of money it is willing to spend on the new ships, or scale the projects back — which in some cases would render them pale imitations of what was originally envisaged.

As I've been saying in this thread for months (years)........No surprise here.

The report will note the government took what were supposed to be initial estimates for new frigates, destroyers and resupply ships and locked them in as the actual project budgets. This was before any real design work had started, and before the government rolled the projects all into one industrial plan aimed at turning Canada into a world-class shipbuilder, all of which has rendered those initial estimates obsolete

And as I stated a month ago in post # 274

http://www.mapleleafweb.com/forums/topic/19645-shipbuilding-contracts/page-19

Where I do find potential for trouble is that the Government has appeared to have fixed the price for each ship prior to having a mature design, as opposed to a more traditional method of building the first vessel “cost plus” and identifying areas of savings for the follow on ships of the class. In essence, setting a fixed price, prior to a mature design will only lead to cost increases and in turn, less ships for the same amount of money……..Case in point, the reduction in numbers from 4 to 2 AOR…..or the promise to build “6-8” AOPS…….

Clearly if from the onset there is a need for 4 AORs and 8 AOPS, we should build 4 AORs and 8 AOPS. This does not mean we should give the builders a “blank cheque”, but have realistic expectations that difficulties and design changes will occur, as such (and within reason) we should be prepared to “work out the bugs” with the lead ship in each class.

Just as I thought, based on the experience the British had with the Type 45.

“The process we have now forces people to come up with preliminary estimates to get a project moving, which is understandable because you don’t want to cut a blank cheque and say ‘Go buy a navy,’” he said. “But at the same time those things get locked in before you can get any kind of detail and there’s no recourse.”

And further confirmed by my post last month......

[Topaz]

The AG report out next week, says the government doesn't have enough money for the 38 billion for ship building, now is that surprising,concerning the F-35??? So they Tories, either have to scale back or put more money in.....there goes the 3.1 billion surplus. http://www.canada.com/Government+billion+shipbuilding+plan+doesn+have+enough+money+auditor+general+report/9177011/story.html

[Guest Derek L]

The AG report out next week, says the government doesn't have enough money for the 38 billion for ship building, now is that surprising,concerning the F-35??? So they Tories, either have to scale back or put more money in.....there goes the 3.1 billion surplus. http://www.canada.com/Government+billion+shipbuilding+plan+doesn+have+enough+money+auditor+general+report/9177011/story.html

The costs are not surprising (I’ve been posting in this thread about them for years) and bares no similarity to the F-35 since this is solely a domestic program. As to going forward, there are four ways that the program can play out:

1. Add more money. This is not a palatable option currently, but once the more expensive portion (the surface combatants) starts, we’ll be closer to the end of this decade, which coincides with larger forecasted surpluses.

2. Reduce the capabilities of the planned vessels, but not sacrifice ship numbers. Though this option would be detrimental to the navy in a great many ways, it would save on the production and potentially a portion of the support costs.

3. Build less vessels for the budgeted funds, well maintaining the required capabilities the Navy needs, this would reduce (depending on numbers) the operational capability of our Navy, but depending on the size of reduction, could place a significant reduction on long term operational costs. This option for a great many Western Powers is the most “popular” as confirmed by the reduction of fleet sizes within NATO.

4. Build the ships offshore in an established shipyard(s). This, combined with selecting a “off the shelf design” could result in significant savings in the acquisition price, well doing little for the long term support cost, but reduce our strategic ability to nil for building and repairing ships. This could be catastrophic if we later had a falling out with the nation that built our ships, to say nothing about the political ramifications of “outsourcing” Canadian jobs. I highly doubt this would ever happen.

Based on current trends in the “West” and the initial findings of the RCN’s JSS/AOR portion of the program, I fully expect (regardless of Government) a mix of 1, 2 and 3.……Or better put, a smaller number of less capable ships for more money.

[PIK]

If they say it costs 36 bil, why don't they just come out and say 72 bil. lol

[Guest Derek L]

If they say it costs 36 bil, why don't they just come out and say 72 bil. lol

Why would they do that?

[PIK]

Why would they do that?

Because when we pay out the 72 that it will cost we won't look so stupid. In other words why bother with quotes when it will be double by the time you get it.

[Guest Derek L]

Because when we pay out the 72 that it will cost we won't look so stupid. In other words why bother with quotes when it will be double by the time you get it.

But we don't know it will cost 72 million billion...........

Edited November 25, 2013 by Derek L

[carepov]

"Britain, for example, opted to build its four new naval supply ships much more cheaply, at the Daewoo shipyard in South Korea. The contract is for roughly $1.1 billion Cdn. That's for all four. By contrast, Canada plans to build just two ships, in Vancouver, for $1.3 billion each. So Canada's ships will be roughly five times more costly than the British ones.

But there's a twist. Canada's supply ships will also carry less fuel and other supplies, because they'll be smaller — about 20,000 tonnes. The U.K. ships are nearly twice as big — 37,000 tonnes. Canadians will lay out a lot more cash for a lot less ship."

http://www.cbc.ca/news/politics/shipbuilding-memo-shows-more-delays-cost-overruns-1.2563948

Does anyone know why our (smaller) ships cost five times as much as Britain's?

Does anyone care that we are wasting so much money?

[Army Guy]

"Britain, for example, opted to build its four new naval supply ships much more cheaply, at the Daewoo shipyard in South Korea. The contract is for roughly $1.1 billion Cdn. That's for all four. By contrast, Canada plans to build just two ships, in Vancouver, for $1.3 billion each. So Canada's ships will be roughly five times more costly than the British ones.

But there's a twist. Canada's supply ships will also carry less fuel and other supplies, because they'll be smaller — about 20,000 tonnes. The U.K. ships are nearly twice as big — 37,000 tonnes. Canadians will lay out a lot more cash for a lot less ship."

http://www.cbc.ca/news/politics/shipbuilding-memo-shows-more-delays-cost-overruns-1.2563948

Does anyone know why our (smaller) ships cost five times as much as Britain's?

Does anyone care that we are wasting so much money?

I think Derek already covered these questions in detail....

I'm not a navy expert but as in all our other purchases, alot of things drive up the price....

Our own purcurement policies have alot to do with it, designed to install price sticker shock to the public...like the need to add on how much will it take to operate over a fix period (over 25 years or more) ....how much fuel will cost to operate, crews wages, price of AMMO,etc etc items that are already taken in to account by DND OEM budget.....It is a way to control how many is purchased....

The need to have it built in Canada, in this case building ships of these sizes and with the tech involved in ship yards that have not done so in years....cost of labor another factor...how much does a canadian worker make compared to a south Korean...The cost of rebuiding our ship building capabilites comes at a cost....perhaps that cost should have been an entirely different project.....

Nothing will change in the way we buy things.....until our policies and proceedures of purchasing are changed....in my personal opinion we need to take out the politics portion altogether. We need to concentrate on what is most important, getting the biggest bang for our buck.... DND needs to create a purchasing program for each element, and the team stick to a project until completion...Purchasing Maj equipment needs to be a separate trade within the forces...and that team needs to work directly with PWSG for the entire life of the project....

[PIK]

Now with the fire knocking out one of our 2 supply vessels, what now. Can we buy a ship from someone else and turn it into what we need or will this take 20 yrs to replace.

Edited March 14, 2014 by PIK

[Derek 2.0]

The costs are not surprising (I’ve been posting in this thread about them for years) and bares no similarity to the F-35 since this is solely a domestic program. As to going forward, there are four ways that the program can play out:

1. Add more money. This is not a palatable option currently, but once the more expensive portion (the surface combatants) starts, we’ll be closer to the end of this decade, which coincides with larger forecasted surpluses.

2. Reduce the capabilities of the planned vessels, but not sacrifice ship numbers. Though this option would be detrimental to the navy in a great many ways, it would save on the production and potentially a portion of the support costs.

3. Build less vessels for the budgeted funds, well maintaining the required capabilities the Navy needs, this would reduce (depending on numbers) the operational capability of our Navy, but depending on the size of reduction, could place a significant reduction on long term operational costs. This option for a great many Western Powers is the most “popular” as confirmed by the reduction of fleet sizes within NATO.

4. Build the ships offshore in an established shipyard(s). This, combined with selecting a “off the shelf design” could result in significant savings in the acquisition price, well doing little for the long term support cost, but reduce our strategic ability to nil for building and repairing ships. This could be catastrophic if we later had a falling out with the nation that built our ships, to say nothing about the political ramifications of “outsourcing” Canadian jobs. I highly doubt this would ever happen.

Based on current trends in the “West” and the initial findings of the RCN’s JSS/AOR portion of the program, I fully expect (regardless of Government) a mix of 1, 2 and 3.……Or better put, a smaller number of less capable ships for more money.

And in the news

OTTAWA - Canada's Navy is down another ship because HMCS Iroquois might be rusted beyond repair.

There's now only one destroyer that could be sent on a mission after HMCS Algonquin collided with another ship during a training exercise in the Pacific Ocean last February.

Structural cracks were found on HMCS Iroquois over the past year, but it was several patches of rust on the 42-year-old destroyer's hull that led maintenance engineers to deem it unsafe for travel.

Not a surprise......As it stands, I don’t see how we won’t have a capability gap (No AORs and now DDGs) in the years ahead, so serious that the RCN won’t be able to deploy far beyond our shores without Allied support……Something we have been able to do since the Second World War.

[Argus]

Not a surprise......As it stands, I don’t see how we won’t have a capability gap (No AORs and now DDGs) in the years ahead, so serious that the RCN won’t be able to deploy far beyond our shores without Allied support……Something we have been able to do since the Second World War.

Don't worry. In another three or four, or at most six or seven years, the government will sign a contract for the design of new ships and only a decade or so later we'll start getting them rolling off them new shipyards!