Ottawa spends $ 187 million more for the rental of a ship at Davie

Lee Berthiaume, The Canadian Press

Ottawa is spending an additional $187 million to extend the lease of a converted civilian ship that the navy is using as a supply ship for two years while waiting for those under construction.

The federal government announced the modified agreement with the Lévis-based Davie shipyard on Friday following further delays in the delivery of two permanent support vessels.

Officials revealed in June that the first ship would not be delivered until at least 2025, two years later than the previous estimate and six years later than originally planned.

Davie began leasing MV Asterix to the Royal Canadian Navy in January 2018 after a fire and excessive corrosion forced the Army to withdraw its only two supply ships before new boats were ready.

The initial five-year lease between Ottawa and Davie for the Asterix was launched in January 2018. It was valued at $620 million, before the government added another $70 million in 2020 because it was used more than planned.

The new deal will see the government choose two of the five one-year options that were included in the original contract.

Documents obtained by The Canadian Press in 2020 showed the Navy expects to continue to rely on the Asterix and its partners to help resupply Canadian fleets at sea even after the two Joint Support Ships are built.

Canada originally planned to buy three new naval support ships when it launched the project more than a decade ago, but cost overruns cut the order down to two.

Navy officials continued to indicate that two support ships were not sufficient to meet the long-term needs of the maritime force, as government policy requires the army to be able to operate two fleets. at sea at the same time.

The Navy fears being crippled any time one of the two Joint Support Ships is out of commission, either for repairs or some other reason.

Parliamentary Budget Officer Yves Giroux estimated in November 2020 that the purchase price of the MV Asterix and another converted container ship from Chantier Davie would be around $1.4 billion. While around $4.1 billion is needed to build two new joint support ships.

But when asked in June whether the government was considering buying the Asterix from Chantier Davie, senior officials said no, in part because it was not designed for high-risk environments.

The initial agreement between Davie and the government was at the heart of the prosecution of retired Vice Admiral Mark Norman.

The former army second-in-command was accused of leaking cabinet secrets about the lease agreement with Davie, but the breach of trust charge against him was stayed in 2019 when prosecutors in the Crown concluded that they had no reasonable chance of securing a conviction.

The Crown also dropped its related lawsuit in June against a federal official, Matthew Matchett. The two men had claimed their innocence.