Canada selects shipyards to modernize Navy

Wed Oct 19, 2011 5:57pm EDT
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TORONTO/OTTAWA (Reuters) - Canada will sign contracts with shipyards in Nova Scotia and British Columbia under a C$35 billion ($35 billion) shipbuilding program, the largest in the NATO country's history.

The government set up the program to revive Canada's shipbuilding industry while modernizing its Navy and Coast Guard, which are still operating some ships that are a half-century old.

The new vessels will play an important role as Canada asserts its sovereignty claims in the Arctic, a disputed region rich in energy and mineral resources.

Halifax's Irving Shipbuilding Inc and Seaspan Marine's Vancouver Shipyards Co Ltd have won the right to negotiate contracts to build a total of 28 vessels, the federal government said on Wednesday.

Irving will build warships, worth about C$25 billion, while Seaspan will negotiate to build large non-combat ships, worth about C$8 billion.

At a later date, Ottawa will award C$2 billion in contracts for smaller non-combat vessels - a deal that could go to the only bidder that was shut out on Wednesday.

That was a joint venture involving Canada's SNC-Lavalin Group and South Korea's Daewoo Shipbuilding and Marine Engineering. Its exclusion is sure to disappoint the French-speaking province of Quebec, which was counting on a contract to keep its 200-year-old Davie shipyard operating.

While the country's frigates are relatively new, some Coast Guard and the Navy's support ships badly need replacing.

"The current ships are about to just crumble and fall apart. If we're going to go anywhere with our ships, you need those new ships to sort of support them," said Ugurhan Berkok, chair of Defense Management Studies at Queen's University in Kingston, Ontario, and a professor at the Royal Military College of Canada.   Continued...

<p>Iron Worker James LeDrew (C) reacts to the news that his company won the bid for a $25 billion federal shipbuilding contract at the Irving Shipyards in Halifax, Nova Scotia, October 19, 2011. REUTERS/ Sandor Fizli</p>