[{"label":"Home","url":"https:\/\/www.pbo-dpb.ca\/en"},{"label":"News Releases","url":"https:\/\/www.pbo-dpb.ca\/en\/news-releases--communiques-de-presse","section":{"id":4,"title_en":"Communications","title_fr":"Communications"}},{"label":"PBO pegs total cost of the Navy\u2019s Joint Support Ship project at $4.1 billion","url":"https:\/\/www.pbo-dpb.ca\/en\/news-releases--communiques-de-presse\/COM-2021-009--pbo-pegs-total-cost-of-the-navys-joint-support-ship-project-at-41-billion--le-dpb-evalue-a-41-milliards-de-dollars-lensemble-des-couts-lies-au-projet-de-navires-de-soutien-interarmees-de-la-marine-canadienne","section":{"id":4,"title_en":"Communications","title_fr":"Communications"}}]

PBO pegs total cost of the Navy’s Joint Support Ship project at $4.1 billion

Ottawa (Ontario), November 17, 2020

The Parliamentary Budget Officer (PBO) today released an independent cost estimate of the Royal Canadian Navy’s project to build two Joint Support Ship (JSS) vessels, and an estimate of the cost of contracting similar capacity from Chantier Davie Canada Inc. (Davie). This report was prepared in response to a request from the House of Commons Standing Committee on Government Operations and Estimates (OGGO).

The JSS project aims to build two new support ships to replace legacy Protecteur-class auxiliary oiler replenishment vessels decommissioned in the last decade. Since the two new vessels are expected to be delivered in 2023 and 2025, the federal government contracted Davie to convert a commercial vessel, the MV Asterix, to military support ship specifications to maintain the Navy’s at-sea replenishment capability during JSS construction. Davie has also offered the government an option to contract a second vessel, the Obelix.

The report, The Joint Support Ship program and the MV Asterix: a Fiscal Analysis, estimates the total cost of the new JSS vessels to be $4.1 billion. This is comparable to the $4.1 billion estimate published by the Department of National Defence (which does not factor in the cost of the provincial sales tax).

The total net cost of the current MV Asterix contract is projected to be $733 million over 5 years ending in 2023. The PBO projects that total cost of a new 5-year contract for the Obelix, starting in 2023-2024, would be $801 million.

The Department of National Defence also has the option to purchase the contracted vessels from Davie.

“Net of any costs associated with this initial contract, we estimate a total cost of approximately $1.4 billion for the purchase of the two Davie vessels”, explained Yves Giroux, PBO. “This is lower than the cost of new vessels under the JSS project.”

An assessment of the capabilities of the Asterix and Obelix as commercial vessels converted for military purposes versus those of the built-for-purpose JSS vessels is outside the scope of this report.

These estimates do not assume any COVID implications on the costs or schedule of the JSS.

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{"id":"RP-2021-029-C","is_published":"2021-01-26T20:16:02.000000Z","release_date":"2020-11-17T14:00:00.000000Z","title_en":"The Joint Support Ship program and the MV Asterix: a Fiscal Analysis","title_fr":"Programme de navires de soutien interarm\u00e9es et NM Ast\u00e9rix : analyse financi\u00e8re","internal_id":"RP-2021-029-C","metadata":{"abstract_en":"In response to a request from the House of Commons Government Operations and Estimates Committee (OGGO), this report estimates the construction costs of the Joint Support Ship program to build two supply ships and costs of contracting converted commercial vessels named the MV Asterix and the Obelix to provide military support. This report also attempts to compare the two projects by incorporating additional project cost elements.\nOur independent point estimate of the construction cost is $2.4 billion, with an additional estimated $0.6 billion to account for budgetary contingency, producing a total of $3.0 billion. Accounting for the non-construction costs stated by the Department of National Defence, we estimate the total project cost of the JSS to be $4.1 billion, inclusive of provincial sales tax. \n\nThe total potential net cost of the government\u2019s contracting of the MV Asterix is $733 million, inclusive of provincial sales tax. We project that a five-year provision of service contract of the Obelix would cost the government $801 million, inclusive of any applicable taxes.\n\nAs the project costs of the JSS cannot be directly compared to the costs associated with the provision of service contract of the Asterix or any potential similar contract for the Obelix, we opt for a comparison of the JSS project to the cost of the purchase options for the Asterix and Obelix. Our calculations suggest that the Asterix and Obelix replenishment vessels could be obtained by the Government of Canada for a total of approximately $1.4 billion, as compared to our estimated $4.1 billion JSS project cost.","abstract_fr":"Le pr\u00e9sent rapport a \u00e9t\u00e9 produit en r\u00e9ponse \u00e0 une demande du Comit\u00e9 permanent des op\u00e9rations gouvernementales et des pr\u00e9visions budg\u00e9taires de la Chambre des communes (le Comit\u00e9 OGGO). Il propose une estimation des co\u00fbts du programme de navires de soutien interarm\u00e9es (NSI) pour la construction de deux navires ravitailleurs, ainsi que des co\u00fbts d\u2019un contrat de conversion des navires maritimes (NM) Ast\u00e9rix et Ob\u00e9lix pour fournir un appui militaire. Il tente \u00e9galement de comparer les deux projets en int\u00e9grant des \u00e9l\u00e9ments de co\u00fbt suppl\u00e9mentaires.\n\nNotre estimation ponctuelle ind\u00e9pendante des co\u00fbts de construction s\u2019\u00e9l\u00e8ve \u00e0 2,4 milliards de dollars, auxquels il faut ajouter un montant suppl\u00e9mentaire estim\u00e9 \u00e0 0,6 milliard de dollars pour couvrir d\u2019\u00e9ventuels impr\u00e9vus budg\u00e9taires, ce qui donne un total de 3,0 milliards de dollars.\n\nLe co\u00fbt total net \u00e9ventuel de la conclusion d\u2019un march\u00e9 gouvernemental pour le NM Ast\u00e9rix est de 733 millions de dollars, taxe de vente provinciale incluse. Nous avons fait des projections concernant un contrat de service de cinq ans pour l\u2019Ob\u00e9lix, et nous avons estim\u00e9 que cela co\u00fbterait au gouvernement 801 millions de dollars, toutes taxes comprises.\n\nComme les co\u00fbts du projet de NSI ne peuvent \u00eatre compar\u00e9s directement aux co\u00fbts associ\u00e9s au contrat de service concernant le NM Ast\u00e9rix ou \u00e0 tout autre contrat similaire \u00e9ventuel pour l\u2019Ob\u00e9lix, nous avons choisi de faire une comparaison des co\u00fbts du projet de NSI avec les co\u00fbts d\u2019option d\u2019achat du NM Ast\u00e9rix et de l\u2019Ob\u00e9lix. Nos calculs indiquent que le gouvernement du Canada devrait d\u00e9bourser environ 1,4 milliard de dollars au total pour acheter les navires de ravitaillement NM Ast\u00e9rix et Ob\u00e9lix, comparativement \u00e0 4,1 milliards de dollars, selon nos estimations, pour le projet de NSI.","highlights":null},"updated_at":"2021-01-26T20:16:02.000000Z","type":"RP","slug":"RP-2021-029-C--joint-support-ship-program-mv-asterix-fiscal-analysis--programme-navires-soutien-interarmees-nm-asterix-analyse-financiere","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/publications\/RP-2021-029-C--joint-support-ship-program-mv-asterix-fiscal-analysis--programme-navires-soutien-interarmees-nm-asterix-analyse-financiere","preview":"https:\/\/www.pbo-dpb.ca\/en\/publications\/RP-2021-029-C--joint-support-ship-program-mv-asterix-fiscal-analysis--programme-navires-soutien-interarmees-nm-asterix-analyse-financiere"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/publications\/RP-2021-029-C--joint-support-ship-program-mv-asterix-fiscal-analysis--programme-navires-soutien-interarmees-nm-asterix-analyse-financiere","preview":"https:\/\/www.pbo-dpb.ca\/fr\/publications\/RP-2021-029-C--joint-support-ship-program-mv-asterix-fiscal-analysis--programme-navires-soutien-interarmees-nm-asterix-analyse-financiere"}},"artifacts":{"main":{"en":{"public":"https:\/\/distribution-a617274656661637473.pbo-dpb.ca\/9d0e25fff86059f31c1ba5507e916fd8d81c695dda4327180df8336c27800d9f"},"fr":{"public":"https:\/\/distribution-a617274656661637473.pbo-dpb.ca\/10dcf661a1978057c84119baaca398dc522fd8d4cf0b9c8e5a98805228854e41"}}},"coverpages":{"distribution":{"fr":{"small":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/e4a0162d6ec1c9a71693b1287917842c7d2127c0","large":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/822b0ebca254b904d4a5f0a0f68025463c2fb23f","h150_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/230236dc4bcf2d41cff79bc28dc6a938b3802c73","h150_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/84a67e0c37ed65e72c6f63f88f4aa37ce50dfb9b","h300_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/59f54a598d2c111c70940e93c80c69934b736466","h300_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/19c9e311e51fa2ee75dae3c8eefc426722ee89bd","h600_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/df7e5e1f463a54195d699cb10ab960947ef9826d","h600_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/87496587d33774a0e28adde60e3251961b9ce0d6"},"en":{"small":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/cc48b12453e9b30bbd54c292001f5fcad1f3c490","large":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/a6f46f29a98ef931deaf33ea005769638b8f7a1f","h150_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/9f048388b56db1cf3f963550c7996d903fd3b005","h150_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/5c0090c31d67cd261c7db84f4851fc2563ca2332","h300_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/1dc4567af048beb76efd1fdc1b928bfddd4e35e0","h300_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/3c1f37392c4a482febf9c04091a85a5b3750bc7b","h600_png_optimized":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/473a37f33868e645b2c803c221363d2791463459","h600_webp":"https:\/\/distribution-i696d61676573.pbo-dpb.ca\/19824ac417e6f172a817cd1d079761816102acea"}}},"bills":[],"bibtex":{"en":"@techreport{PBO-RP2021029C,\n author={Busby, Carleigh and Penney, Christopher},\n title={The Joint Support Ship program and the MV Asterix: a Fiscal Analysis},\n institution={The Office of the Parliamentary Budget Officer},\n year=2020,\n \n address = \u0022Ottawa, ON\u0022\n}","fr":"@techreport{DPB-RP2021029C,\n author={Busby, Carleigh and Penney, Christopher},\n title={Programme de navires de soutien interarm\\\u0027{e}es et NM Ast\\\u0027{e}rix : analyse financi\\`{e}re},\n institution={Bureau du directeur parlementaire du budget},\n year=2020,\n \n address = \u0022Ottawa, ON\u0022\n}"}}