Canada's Seaspan Confident NSPS On-Track

Maritime Activity Reports, Inc.

February 28, 2013

Seaspan CEO  addresses concerns raised by the Parliamentary Budget Officer about the National Shipbuilding Procurement Strategy (NSPS).

(Seaspan affiliate companies include Vancouver Drydock, Vancouver Shipyards and Victoria Shipyards).

Seaspan ULC’s CEO Jonathan Whitworth's statement is as follows:

We are confident the NSPS program as described in 2010, as awarded in October 2011, and as signed in the umbrella agreement (UA) on February 14, 2012, is solidly on track.

Since the signing of the UA, Seaspan has realized success in building the right management team, processes and infrastructure to set the yard up for long-term success. When Seaspan was awarded the Non-Combat program package, we hoped to have secured a design contract in about one year. We signed it last week, four months past the one-year anniversary of the contract award.

The design contract for the Offshore Fisheries Science Vessel (OFSV) is the first step in a closely linked series of events that will lead to on-time start of construction next year. During this very important step, we further evolve Canada’s design to include every part and piece of equipment in the ship. This will result in a 3-D electronic product model that includes the production information required to drive the automation and labour processes of our new shipyard facilities. As we complete the construction-engineering phase we will secure a ship construction contract early next year and begin ship construction in the first Quarter of 2014.

Yes, we have had delays, but they are measured in weeks and months, which given that we are embarking on a 20-30 year shipbuilding relationship with the Government of Canada, is a minor inconvenience. The approach we are using with respect to the new builds themselves is ‘design then build’. It is important to understand that we need to get the designs and production details for each vessel right before we start cutting steel. The ‘design then build’ approach reduces the risks of the actual ship construction process and brings best value to Canada.

Seaspan is excited about this project and would love to begin construction on the new ships immediately, but rushing the process or starting projects prematurely can only create problems for the efficient delivery of vessels. As with the recently completed vessels under the mid-life modernization Frigate Life Extension (FELEX) program at our Victoria Shipyards, we have a strong track record of completing projects on time and on budget. This philosophy will not change under NSPS.

We cannot comment directly on pricing of the Joint Support Ships (JSS) or the Polar Icebreaker yet because we have not gone far enough into the planning or design processes. In the 17 months since Vancouver Shipyards was awarded the Non-Combat package we have:

• Hired 41 engineers, planners, managers and specialists from across Canada and from countries such as Scotland, England, the United States, and Spain to join our project team.
• Received and reviewed more than 5000 resumes so that we are ready to recruit and hire the skilled people we need when shipbuilding starts next year.
• Embarked on a $200 million shipyard modernization program to upgrade our facilities. This is money Seaspan is investing in its own facilities. Work is underway now. Construction companies are on site and progress is being made everyday.
• Built 7 new chip barges and are in the process of building an additional 2 new gravel barges for sister company Seaspan Marine. These projects were fast tracked to keep our shipyard workers busy honing their skills. We are also currently:
• In the process of developing training and apprenticeship programs with post secondary institutes, and are also formulating strategic partnerships with our local First Nations and other stakeholders to support construction.
• Working with local municipalities to secure the needed permits and to enhance area roads and access points.


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