Thursday, November 14, 2013

New warships to cost more than $100-billion, Ottawa estimates

OTTAWA — The Globe and Mail
The cradle-to-grave cost to Canadian taxpayers to acquire new warships will exceed $100-billion, the federal government says – tens of billions of dollars more than Ottawa has previously disclosed.
It is the first time the federal government has gone public with its best guess on the full life-cycle cost of up to 15 surface combat vessels.
The political demand for transparency has changed in Ottawa since a controversy over the true cost of a plan to buy F-35 fighter jets, and the Harper government feels pressure to open the books.
The purchase price of the military ships remains $26.2-billion, but a new estimate of “approximately $64-billion” for 30 years of maintenance, operating and personnel costs brings the total bill to “in the vicinity of $90-billion,” according to a status update released by the Department of Public Works this week. It cautions the “through-life costs” will need to be refined over time.
The government appears to be releasing the new figure in anticipation of Auditor General Michael Ferguson’s report later this month on the national shipbuilding procurement strategy. It is possible the federal watchdog will use full life-cycle cost estimates to discuss the project, as he did with the F-35s.
Ottawa does not want to be accused of hiding cost information on another major purchase...Continue reading...

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