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Budget watchdog says shipbuilding contract not enough

Kevin Page cites Seaspan's lack of naval shipbuilding experience as factor in potential higher costs

Canada’s independent budget officer published a report Thursday saying the $2.6 billion allotted to build two naval supply ships at Seaspan’s shipyards could be short by as much as $1.5 billion.

The supply ships are part of the $8 billion federal shipbuilding contract awarded to Seaspan in July 2011.

In his report, parliamentary budget officer Kevin Page said part of his cost estimate relates to Seaspan’s lack of experience building naval ships.

“Seaspan’s experience has been in the field of barges, ferries, smaller commercial ships,” the report reads. “The company has very little experience in the class of ships that will be produced.”

Jonathan Whitworth, Seaspan ULC CEO, said in a statement the company is on track and on budget and there should be no cause for alarm.

A design contract was secured for the first ships in February, about four months behind the original estimated schedule.

“Yes, we have had delays, but they are measured in weeks and months, which given that we are embarking on a 20 to 30 year shipbuilding relationship with the Government of Canada, is a minor inconvenience,” Whitworth said.

The estimates in Page’s report were subject to independent review by members of the U.S. congressional budget office, U.S. Naval Institute and other international experts.

View Page’s report here.

dpalmer@vicnews.com