Seaspan steps up campaign for part of $35-billion federal contract contract

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Seaspan steps up campaign for part of $35-billion federal contract


VANCOUVER - Seaspan Marine Corp. is pulling out all the stops to secure the lion’s share of a $35-billion federal shipbuilding contract that’s to be awarded later this summer.


According to Seaspan, the 30-year contract for the National Shipbuilding Procurement Strategy (NSPS) would create more than 8,000 direct and indirect jobs in B.C. at its peak. It involves one of the largest military procurement projects since the Second World War.


Lately, the company – whose holdings include Seaspan Ferries Corp., Vancouver Drydock Company Ltd., Vancouver Shipyards Co. Ltd., and Victoria Shipyards Co. Ltd. — has taken out full-page ads in major newspapers in B.C. and Ottawa that “we’re in it to win it.”


The first seven to nine years of the program would increase Seaspan’s total provincial GDP contribution to roughly the same as the total GDP impact of the 2010 Olympics, according to an economic impact study prepared last month for Seaspan based on the company winning the combat ship portion of the NSPS, worth about $20 billion.


The ad campaign thanks Premier Christy Clark – who visited Seaspan Tuesday to show support for the project — and the province of B.C. “for your support as we compete [for the contract] and over 8,000 jobs it will bring to B.C.”


“It is a true game-changer and would redefine shipbuilding on the west coast,” Seaspan CEO Jonathan Whitworth said in an interview Tuesday. “We’re confident of submitting a winning bid. We have the finances, resources, knowledge and people to do these projects.”


He called the ads a “mini-investment” in their efforts to secure the federal contract and said they were paid for entirely by Seaspan. “It was a pure recognition of thanking the province and B.C. government for supporting us and making sure B.C. understands how critically important [the NSPS contracts] are to us.”


Bids must be submitted by July 7. The other bidders are Irving Shipbuilding of Halifax, Dave Shipyards of Levis, Que., and Upper Lakes Industrial and Marine of St. Catharines, Ont.


The contract will see the building of new fleets for Canada’s Navy and Coast Guard.


Whitworth said the NSPS involves two separate contracts — one worth $20 billion for combat ships, the other worth $15 billion for non-combat ships — and that Seaspan, which is limited to one contract, has bid on both.

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While a winning bid would create about 2,000 direct and indirect jobs initially, that would grow to about 8,500 in the second decade of the project, he said, noting that it would increase employment by an average of 5,000 jobs annually over the term of the contract.


He said there are a number of vessels in each contract, with the combat ship component involving 12 to 15 frigates and six to eight Arctic offshore patrol vessels.


The non-combat component involves a larger number of vessels but more ship classes, including ice breakers, coast guard vessels, joint supply ships and vessels geared for fisheries and oceanography operations.


Up to 85 per cent of the work would be done at Seaspan’s North Vancouver shipyard, and the rest in Victoria.


Whitworth said B.C.’s bid is a strong one, for several reasons.


“We have a proven track record of building vessels on time and on budget. We have a full 12-month ice-free port with favourable weather conditions. And we’re strategically located next to the Canadian Navy’s Marine Pacific headquarters in Esquimalt.”


He said if the contract is awarded, infrastructure work would start immediately and work would ramp up sharply in 2012.


According to the economic impact study, the first two to three years of Seaspan’s total future operations including the NSPS program would create roughly the same GDP impact as the construction attributable to the 2010 Olympics, which has been estimated to be between $630 and $820 million.


That would grow in the first seven to nine years of the program to be between $2 billion and $2.5 billion, the report added.


The study said the project’s overall economic impact on B.C. would be over $15 billion, providing federal tax revenues over the life of the project of $1.3 billion and provincial and municipal tax revenues over the life of the project of over $600 million.


The report noted that the annual GDP impacts estimated to be generated by Seaspan from 2013 to 2022 are comparable to the contributions of the film and television industry to provincial GDP ($276 million).

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Whitworth said Seaspan has asked the B.C. government for tax credits similar to those available to the oil- and-gas industry and film-and-television industry.


Clark agreed at the North Vancouver shipyard Tuesday that Seaspan’s bid is a strong one.


“We’re already, as near as I can tell, head and shoulders above any of the other bidders, so really, the question isn’t whether or not we’ll get half of the bid, the question is who’s going to get the other half.”


She said the B.C. government is behind Seaspan’s bid 100 per cent. “I think that makes a difference at the political level to know politicians are there and we’re backing it.”


Clark said she will go to Ottawa in the next two weeks and that Jobs, Tourism and Innovation Minister Pat Bell and Finance Minister Kevin Falcon will follow with their own trips.


“We’re at crunch time ... Seaspan is putting its final bid together and we’re going to be there in advance of their submission to make the case.”


Asked whether the province would provide any financial or tax incentives, she said: “At the moment what we’re doing is providing all the political support that we possibly can. The bid is really an outstanding bid.”


Meanwhile, George MacPherson, president of the Shipyard General Workers’ Federation of B.C., said in an interview that a winning bid would not only provide good jobs for shipyard workers, but entice a lot of his members back to Vancouver from Alberta’s oilfields.


“We’ve never seen this kind of a contract before. This is huge and it’s huge for the province. It allows us to move forward and create work for younger people. And it guarantees us work for the next 30 years, which is unprecedented in this industry.”


Spinoffs would also be huge, he added, noting that smaller independent shipyards would also get some work.


“It allows people to buy cars, boats, pay mortgages, and it spreads out to the suppliers.


“And I’m pretty optimistic. I believe we have a real shot at this."

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Premier Christy Clark tours the Seaspan shipyards in North Vancouver on June 7, 2011. Seaspan is stepping up its bid to secure the lion's share of a $35-billion federal shipbuilding contract