C-17 conract to be announced Friday, February 2
At least this looks pretty certain:
The government of Canada has finally inked a $3.4-billion deal with Boeing Co. to buy four C-17 Globemasters -- giant jets the Canadian Air Force will use to transport tanks and other large pieces of military equipment all over the world.
CTV News has learned that government officials will announce details of the contract on Friday.
The government had earlier announced that it wanted to buy these jets from Boeing and was negotiating with the Chicago-based company on the terms of the deal.
But those negotiations got tripped up by demands from Sen. Michael Fortier, the public works minister who is the Conservative political minister for Montreal, that Boeing should spend a significant portion of the contract buying goods and services from Quebec-based aerospace companies.
Under the terms of most military contracts, the Canadian government requires a vendor who wins a deal to supply Canada with military equipment to spend $1 buying goods and services from Canadian suppliers for every dollar it receives from the Canadian taxpayer. These are known in procurement circles as industrial regional benefits or IRBs.
Because the Quebec aerospace industry accounts for about 55 or 60 per cent of Canada's overall aerospace sector, Fortier had asked that Quebec firms get at least 40 per cent of the IRBs.
But CTV News has learned that Fortier's pleas for Quebec to receive as much a $1.4 billion in industrial benefits from Boeing have not been convincing and that Quebec will receive only about $850 million or 25 per cent of the IRBs.
Ontario aerospace firms and suppliers with links to Boeing can also expect about 25 per cent.
Western Canadian provinces, particularly Manitoba, can expect about 20 per cent of the IRB pie and Atlantic Canada can expect between five and 10 per cent.
[...]
Canada could take delivery of its first C-17 as early as this summer [emphasis added]. The others will be delivered over the next few years.
The Air Force has decided that it will station the C-17s at CFB Trenton, in southern Ontario.
Video clip here.
posted by Mark, Ottawa at 1:43 p.m.
4 Comments:
I would love to see some truth in reporting on the cost of these planes. They always show the total program cost. That's like putting the cost of the car, the initial cost of training the drivers and techs and the maintenance costs over twenty years. Think of this, following the manufacturer's specs it will cost you $2396.00 for oil changes at $29.95 per oil change 4 times a year. This does not include any spare parts, any other major maintenance etc. Would you then say your car cost $22,396.00 instead of $20,000? I doubt it.
Then someone needs to remind the PAO that they need to stress the cost is over a fixed period. This is the same type of reporting that allowed Cretien to cancel the first MHP program by promising that he would save Billions of dollars by canceling the program. When the cost is explained in context, and the length of time included, people get a better idea. By just saying $3.7B folks think that is what is going out the door tomorrow.
What sounds better, $3.7 Billion dollars or $185 Million a year for 20 years?
You want some truth? Here it goes.
3.4 billion over 20 years, which includes purchase, some parts, some overhauls. Lets say it includes most of everything. These airplanes have a service life of 30,000 hours, meaning they are retired after flying that many hours (or lots of extra money will be required for a service life extension)
So: 3.4 billion divided by 4 aircraft and further divided by 30,000 hours comes out to : 28,333$ an hour.
What is not included in the 3.4 billion is : fuel, pilots, local mechanics, de-icing fees, landing and parking fees, air navigation fees, hotel and transport fees, crew per diems, un scheduled maintenance expenses etc. Fuel alone is about 8 tons per hour, so about 10,000 liters at .50$, comes out to 5000$. That adds up already to 33,333$ per hour. I dont know how much CF pilots and engineers earn, but lets put 10 pilots and 10 mechanics per aircraft at 60K per person which comes out to 800$ an hour at 1500 hours a year (30,000 hours divided by 20 years) Lets add another $2000 an hour for the other stuff and we reached 36,133$ an hour, and I am being very very conservative.
To compare, the CF presently rent AN-124s with 120 ton capacity for 20,000$ US an hour which includes aircraft, crew, maintenance, fuel, and insurance. The 48 ton capacity IL-76MD go for about 12,000$ an hour.
We rent the AN-124 and IL-76 when we need them. However, we commit with the 4 C-17s to spend 4 times 36,133 x 125 hours a month (1500 hours / 12 months)which comes out to over $18 million a month. Between 1997 and 2003, we spent $18 million a year on renting strategic airlift.
I forgot to add the interests costs, but I think everyone gets the picture....
Hello A Taxpayer. I see that your blog is linked from CASR... I have read some of the things they have posted and I am not surprised that you have such data at your fingertips. I also note your vehement opposition to the C-17 purchase.
If the purchase of any piece of equipment was based purely on cost we would never buy anything but rent it all, as well as hire mercenaries to do the dirty work.
You fail to mention how when the DART needed to deploy after the tsunami it was stuck here in Canada cooling its heels due to the lack of transport to rent.
http://www.atlantic-council.ca/index.php?option=content&task=view&id=132&Itemid=195
"Without any “heavy-lift” capability we could not dispatch the DART (Disaster Assistance Response Team) to the Tsunami disaster area until we could rent one of the scarce Ukrainian built Antonov aircraft from a foreign country, which caused us to arrive so late as to be an embarrassment to all Canadians."
If we are to be an independent country, able to respond as we desire and not be at the mercy of another country, then we must have capability.
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