Wednesday, March 05, 2008

Rudimentary math and some common sense

Bill Casey is doing his job: he's working as hard as he can for his constituents. He's making noise that he thinks will help them. Would that we all had MP's so enthusiastic about advocating for the financial health of their ridings.

The Globe and Mail, on the other hand, is not doing its job. It is publishing what Bill Casey has to say without much context at all:

A Nova Scotia Independent MP says sending Halifax-based submarines on a 7,350-kilometre voyage to Victoria for major maintenance is a waste of money. Bill Casey recently received a letter from Defence Minister Peter MacKay, telling him that each round trip through the Panama Canal will cost $1.1-million.


David Martin, a military spokesman, confirmed the $566,000 price tag is for a one-way trip. The navy estimates it will take 45 days for submarines to make the voyage from Halifax to Victoria. Mr. Casey was astounded at the cost of sending the subs to B.C.

"It's a waste of millions of dollars that didn't have to be spent," he said. "If the subs were maintained in Halifax like they have been for decades - the equipment's there, the trained people are there to do the work - all of this expense would not be necessary."

There should be an environmental assessment of the decision to send the submarines so far for maintenance, he said.

The government recently announced that a British Columbia consortium won the $1.5-billion maintenance contract for Canada's four Victoria-class submarines. Ottawa informally awarded Canadian Submarine Management Group the first phase of the 15-year contract almost a year ago.

Now, I wasn't privy to the bid process, and these are complicated assessments. But a few things are clear to me.

First, Casey's argument centres around the fact that currently three of our subs are stationed on the east coast, and only one on the west coast. That may not be the case forever. If the Navy moves to equal basing on the east and west coasts, the whole argument about increased costs to sail them back and forth through the Panama Canal becomes moot. And don't for a minute think that's not being knocked around at NDHQ.

Second, we could eliminate transit costs altogether by incurring the massive costs of duplicating the maintenance infrastructure on both coasts, but that's cutting one's nose off to spite one's face, right?

Third, if we're going to have one contract on one coast because that makes the most sense financially, then we need to pick a coast. So how do the sailing costs factor into that decision, assuming the Navy doesn't go to equal basing?

Assuming a submarine lifespan of 25 years, we'll need to do this major maintenance either once every five years, or once every eight years. Here's how the math would grind out:
  • Every 5 years: four round trips (years 5, 10, 15 and 20) per submarine. Three east coast submarines going west four times each works out to $13.584M total to go west. One west coast submarine going east works out to $4.528M. Net savings if we switch the contract to the east? $9.056 million.

  • Every 8 years: two round trips (years 8 and 16) per sub. Three east coast submarines going west twice each works out to $6.792M total to go west. One west coast submarine going east works out to $2.264M. Net savings if we switch the contract to the east? $4.528 million.

So, follow along with me: if we're talking a maximum of $9M dollars difference on a $1.5B contract, that's six tenths of one percent of the contract value in savings - at most.

Anyone out there think a contract like this turns on six tenths one percent in costs? Anyone? Bueller?

Perhaps then the story is not that the east coast was shafted, but that the other company put in a better bid. Like I said, I'm not privy to all the details in the respective bids, but the people who are privy to them aren't complete idiots. I'd lay money that they would have factored all this into their decision in the first place.

But hey, just because an amateur sitting at a computer for a few minutes can do it, don't expect anyone at the Globe and Mail to apply a calculator and a sniff test to the story. Not when they can regurgitate Bill Casey's political advocacy verbatim.


Blogger sabre0 said...

HMCS Victoria is presently sitting in the Graving Dock in Esquimalt as I write this. She has been pretty much disassembled for the last 2 years at least. I would hazard a quess that the technicians working on her thank god that it is in balmy downtown Victoria rather than having to pick away at all of the snow and ice before beginning their shift daily if they where banished to Halifax.

1:28 p.m., March 05, 2008  
Anonymous Anonymous said...

since the east coast got all the lolly when we built 8 frigates, can't the west coast get one maintenance contract . . . fair's fair n'est pas ?

If we count up the CF bases in the Maritimes and then look at what is in BC - a pretty fair territorial/population equivalent, I'd bet we'd find that BC is "under represented"

8:21 a.m., March 06, 2008  
Blogger Paul Wornham said...

Is there anything preventing the subs using the Northwest passage rather than the Panama Canal? They are submarines right, so the ice isn't an issue.

Just wondering if there is a reason; I don't know much about the state of the subs.

10:22 a.m., March 06, 2008  
Blogger Babbling Brooks said...

Daily Bayonet, as I understand it, our subs aren't under-ice capable at this point. Unless I'm mistaken, they would require an air-independent propulsion system and a sturdier conning tower for emergency breakthrough in order to go under the ice up north.

Anyone with dolphins on their chest, feel free to add to or correct this info.

11:32 a.m., March 06, 2008  

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