Seaspan CEO lashes out at rival shipbuilder’s claim that it hasn’t built “a single ship”

Seaspan’s Cavalier docked for repairs at the company’s North Vancouver shipyard
Seaspan’s Cavalier docked for repairs at the company’s North Vancouver shipyard

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War of words continues around awarding of federal shipbuilding contracts

The CEO of B.C.’s largest shipbuilder is lashing back at “face value” claims made in a March 17 CBC story, in which a rival shipbuilder claimed Seaspan hasn’t completed a “single ship” since being awarded a $7-billion federal contract in 2011.
 
“All we hear are delays and cost overruns which are so high, they are turning the Canadian shipbuilding industry into an international embarrassment,” said Alex Vicefield in the CBC story. Vicefield is CEO of Inocea, a global shipping conglomerate that owns Quebec’s Chantier Davie shipyard.
 
In a March 18 release, Seaspan CEO Jonathan Whitworth rejected the claims and castigated reporter Terry Milewski for neglecting to contact Seaspan for comment. He responded that work on the ships is well underway, with “31 of 37 blocks under construction for our first Offshore Fisheries Science Vessel with the second of three ships to begin construction in a matter of weeks.”
 
In October 2011, under the terms of the National Shipbuilding Procurement Strategy, the government awarded Seaspan a $7-billion contract to build up to 17 non-combat vessels for the Canadian Coast Guard and Royal Canadian Navy. Halifax Shipyards, a subsidiary of the Irving Group of Companies, was also awarded a $25-billion contract for combat vessels. Chantier Davie, a Quebec shipyard, also bid on the contract. It was bankrupt at the time, and lost. Shortly after, it was bought by Inocea.
 
In the CBC story, which continues a long controversy about the awarding of federal shipbuilding contracts, Vicefield makes scathing remarks about the procurement process. “Never have I witnessed a country so willing to spend money unnecessarily,” he said, criticizing the practice of awarding cost-plus contracts, which guarantee a profit margin, rather than the international standard of fixed-price contracts. “This provides no incentive for shipyards to reduce costs when possible,” he told the CBC.
 
In response, Whitworth contended that the procurement process was described by the Auditor General as a “successful and efficient process independent of political influence … and carried out in an open and transparent manner.” He also noted that since winning the contract, “Seaspan has invested $170 million of its own money to build the most modern shipyard of its kind in North America” and expects to employ 1500 people at the peak of manufacturing these ships.
 
“In contrast,” he continued, Chantier Davie’s “own financial and production performance record has yet to find its way into the public discourse.” 

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