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The Globe and Mail

Harper's team keeps hands off $35-billion shipbuilding hot potato

The Irving-owned Halifax Shipyard, showin in 2010, is one of three firms in the running for $35-billion in federal contracts.


It's the $35-billion contract that no politician wants to own.

A bureaucrat, not a federal politician, is expected to make the announcement about which two Canadian shipyards will win the mammoth contract to build warships and non-combat vessels this week.

The reason for the hands-off political approach is pretty simple: Three shipyards are in the bidding – one in Atlantic Canada, one in British Columbia and one in Quebec. Only two will win.

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So, in effect, whoever makes the announcement will be announcing the loser. And the loser could very well be from Quebec.

No federal politician wants to be part of that.

"There is no upside, which is why the federal government has been falling all over itself to run away from the decision," a source close to the process told The Globe.

Memories are still fresh, even though it happened back in the 1980s, of the repercussions that resulted from Brian Mulroney and his Progressive Conservative government awarding the CF-18 maintenance contract to Quebec instead of Winnipeg.

Stephen Harper's Tories don't need a repeat of that.

For the current bid there are three shipyards – Irving Shipbuilding in Halifax, the Seaspan shipyards in Vancouver and the Davie yard in the Quebec City area, which has been plagued by financial troubles – in contention.

One will receive a $25-billion contract to build combat vessels; the other is to receive about $8-billion to build ice breakers and a naval supply ship. There will be about $2-billion for smaller vessels, which could go to the losing shipyard or the other yards that bid.

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What is equally interesting about this process is the secrecy around it. In leaky political Ottawa, even insiders and politicians including Defence Minister Peter MacKay, who is from Nova Scotia and B.C.'s Heritage Minister James Moore say they don't know who's going to win.

Even the Prime Minister reportedly doesn't know.

Only one hour before the announcement is to be made will Public Works Minister Rona Ambrose – who is the lead minister on the file – be informed.

To guard against any whiff of regional favouritism or political influence, the Conservative government has tightly structured the process.

A committee of deputy ministers is making the decision. A company from Britain is evaluating the technical merit of the bids, according to two insiders close to the bid process.

The insiders believe only two people in the entire city know what the decision is – and even then, only one would know where the combat piece of the contract is going and the other would know where the non-combat portion is going.

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The much-anticipated decision could be made public as early as Wednesday.

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