Kevin McCoy, president of Irving Shipbuilding, leads a tour as workers construct components of the Arctic offshore patrol ships at their facility in Halifax on Friday, March 4, 2016. The Canadian subsidiary of French defence giant Thales has been awarded a multibillion-dollar contract to service Canada’s new fleet of Arctic offshore patrol ships and joint support vessels.THE CANADIAN PRESS/Andrew Vaughan Canadian subsidiary of French defence giant gets $5.2 billion contract by The Canadian Press Posted Aug 17, 2017 8:38 am MDT Last Updated Aug 17, 2017 at 2:20 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email OTTAWA – The Canadian subsidiary of French defence industry giant Thales has been awarded a multibillion-dollar contract to service Canada’s new fleet of Arctic offshore patrol ships and joint support vessels.The federal government said Thursday Thales Canada, in a joint venture with the company’s Australian arm, will provide in-service support for the vessels under a contract that could total $5.2 billion over 35 years.Acting Procurement Minister Jim Carr announced the awarding of the contract along with parliamentary secretary Steven MacKinnon at news conferences in Halifax and Ottawa.The contract starts with an eight-year, $800-million service period.Carr said it will provide “men and women in our military with the equipment they need to conduct their operations effectively while creating good middle-class jobs for Canadians.”But the Union of National Defence Employees said the government is relying too much on the private sector when it should be doing the ship service work in house.Rear Admiral John Newton said Thursday the Royal Canadian Navy maintains a “fine balance” between in-house capabilities and industry support.“We are constantly migrating our in-house capability very slowly to keep a balance between what industry can provide, readiness of ships when we demand it, international deployments, and what we (the Royal Canadian Navy) can provide with specialized teams and specialized operational equipment, weapons and sensors,” said Newton, commander of Canada’s East Coast navy.“We’ll have a navy that’s ready for operations globally and it’s a good navy that thrives on this kind of relationship.”MacKinnon said the announcement is part of building the capacity for Canadians to do the work in the future.He said Canada has suffered by allowing its shipbuilding capability to deteriorate, and the government is in the process of rebuilding from the floor up.“We are literally, under the shipbuilding strategy, rebuilding an industry,” MacKinnon said in Ottawa. “This contract . . . does bring new capability to Canada. It brings new efficiencies to Canada, it brings experience from across the world.“But at the same time, it’s Canadians doing work on Canadian vessels that were paid for by Canadian tax dollars,” he said. “We’ll be building capabilities benefiting from the experience of our partners from around the world and using that right at home, using Canadians.”Carr said the federal government received four strong bids. Winning bidder Thales Canada will retrofit, maintain and repair the ships, and will also provide training.Officials say Thales will be required to hire subcontractors to complete the work in regions across the country to ensure economic benefits.Work is to be completed in Canada, except when the ships need work overseas.Thales Canada president and CEO Mark Halinaty said the company isn’t yet sure which shipyards will be used to do the maintenance and repair work.“That’s all part of the competitive process that we plan to undertake,” he said.The previous Conservative government originally launched the national shipbuilding strategy in 2010, budgeting $35 billion to rebuild the navy and coast guard fleets while also creating a sustainable shipbuilding industry on both the east and west coasts.Six Arctic patrol vessels are being built by Irving Shipbuilding in Halifax, with the first expected next year.Under the contract, Thales is required to subcontract work for ships delivered in the east to companies in the Atlantic provinces, Quebec and Ontario, whereas work on ships delivered in the west must be completed in the western provinces and territories.John MacLennan, national president of the Union of National Defence Employees, said privatizing repair work puts public sector jobs at risk.He also expressed concerns related to national security and the quality of the workmanship that will be done by subcontractors on the ships.“The quality of work is very important. There is a pride and professionalism in the public service,” MacLennan said.Carr said there will be no job losses because of the contract, estimating it will create or maintain 2,000 jobs over 35 years.He added that everybody involved in the work will have a top security clearance.“We’re fully confident that all the safeguards are in place,” Carr said. “This contract will conform to the highest standards of security for Canada.”— Story by Brett Bundale in Halifax and Terry Pedwell in Ottawa.
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Austin Engineering has announced the signing of a significant three year supply agreement with Vale. Equipment will be ordered by Vale and supplied in accordance with its requirements, as determined by its ongoing production schedules and equipment replacement programs. Vale has informed Austin that the previous contract was for a total of $200 million and that the current contract will be split between two companies, with Austin receiving the larger part of the contract.The contract in the first year is for an initial value of up to $59 million of equipment. Vale will review its requirements after the first year and then on a six monthly basis in light of its equipment needs and operating budgets. Further amendments to the contract value will then be issued as required. The contract provides Vale with a range of equipment at fixed prices, adjusted as necessary on an annual basis, with cost escalation. Austin’s scope includes a number of products from its product range such as dump truck bodies, buckets and ancillary equipment. Other products “may be considered by Vale as the contract progresses.”Vale has also confirmed that it will discuss with Austin the adoption of scheduled maintenance programs of the kind used by Austin in its Pilbara Hire service and repair business. If these programs are introduced, it will provide Austin a source of recurring reliable repair and maintenance earnings. The ability to plan for the delivery of this work in advance will also assist Austin with maximising efficiencies.The delivery of products will be from Austin’s Chilean and Colombian facilities to the Brazilian border, where Vale will arrange for the crossover into Brazil. Austin will be responsible for the assembly of the products in Brazil. The purchase of two facilities, with existing small workshops and land for expansion, will be pursued in order to enable products to be assembled and maintenance services to be provided. A number of possible sites and businesses have already been identified in Belo Horizonte and Belem. In the interim, assembly will be subcontracted to local service providers. Vale’s other international operations will also have access through this agreement to Austin’s range of products and services from its other worldwide production facilities.The company had expected that initial deliveries would have started in August 2013, however with product requirements, specifications and associated engineering activities yet to be completed, revenue streams from the contract are now expected to commence from March 2014 onwards.Commenting on the contract Managing Director Michael Buckland said “This is a very important contract for the company and it continues our successful strategy for expansion into South America. The contract has been in negotiation for over a year and it is pleasing to bring it to a successful conclusion and for Vale to recognise Austin as a preferred supplier of mining products. We see this as only a commencement of our expansion strategy in Brazil and we are confident that the establishment of operations in the country will lead to orders from other Brazilian mining customers. There is significant potential for exponential growth in revenue and profitability over the coming years from our operations throughout South America.”