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Monday, November 23, 2015

Project Resolve: Irving Claims to have Cheaper/Faster Solution for iAOR

In the drawn out saga-drama that has been the Royal Canadian Navy's attempt top build a new surface fleet - we have hit yet another delay.

Irving was awarded the billion dollar contract to build the Canadian Surface Combatant  (CSC) Fleet, the new Arctic Offshore Patrol Ships, and new Coast Guard Ice Breakers - yet they are upset that they were not chosen to build the interim Auxiliary oil replenishment vessel (iAOR) for the RCN.

The new Queenston-Class AORs are not set to be complete (being built by Irving) until 2021/22. Until then the RCN has no AOR capability and has been leasing Spanish and Chilean AORs to fill the role.

Davie Shipbuilding in Levis, Quebec; one of Canada's largest shipbuilding companies (who built most of the previous RCN fleet) was selected to convert a boxship into an AOR for the Navy. Davie would maintain ownership of the vessel and lease it to the RCN for a period believed to be 7 years, at a cost of $700 million.

Irving sent a letter to the new Liberal cabinet last week and asked them to stop the program and review it. Here is what Irving said:

The letter, obtained by the National Post, is dated Nov. 17. It asks for a pause and review. Two days later, last Thursday, cabinet ordered the pause and review.”In October 2014 Irving Shipbuilding was asked by the Royal Canadian Navy to propose an interim refueling and resupply capability. We assembled an international team of naval and commercial shipping experts to tackle the problem. This included my own experience as a former Vice Admiral in the United States Navy responsible for all ship design, construction, maintenance and conversion in a Navy of almost 300 ships and submarines.

"Our focus was on providing maximum capability with minimum risk, cost, and completion schedule by limiting the amount of conversion required for an existing ship. Early on, we rejected a container ship as too expensive and too risky to convert especially in the relatively short time requested by the government for rapid reconfiguration to meet the immediate needs of the Royal Canadian Navy. The Roll On–Roll Off (RORO) ship selected by Irving Shipbuilding for conversation starts with the right ship to provide tremendous capability, adaptability, and best value to Canada.

"Our proposal includes the ability to refuel two ships simultaneously; land, refuel and maintain helicopters; resupply dry stores and ammunition at sea; and supports modular medical, command and control, and berthing capability. Most importantly, we provide tremendous additional capability that is already inherent in our RORO ship that allows numerous large trucks, military vehicles, and emergency response vehicles to rapidly roll on and roll off via a large stern ramp and vehicle bays. This allows rapid response to humanitarian assistance and disaster relief emergencies at home and abroad, and provides logistics support to military forces ashore. A large open payload volume also already exists to allow for rapid, low cost reconfiguration of the ship to meet future mission needs.

"Our request has and continues to be for an open, merit-based evaluation of all proposals to ensure the best solution for the Navy and best value to Canadians." 

It sounds to me like Irving is upset that it did not get the additional $700 million when it already received the $26.2 Billion contract for the CSC Fleet. In my opinion, if the Queenston-Class AORs are not going to be ready until 2021 why would you further delay them buy building iAORs first? Irving should just get a move on building the Queenston-Class AORs. 

Project Revolve is officially on hold at the government level, but Davie is still working on converting the Asterix into an AOR - and will be owed $89 Million on December 1st if the final contract is not signed; as the previous government entered into an initial agreement, which allowed Davie to begin working while the final contract was finalized.