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In order to promote Trinidad and Tobago as a major destination for Foreign Direct Investment (FDI) and Partnerships in the non-energy sectors, including Shipbuilding and Repair, the Government of the Republic of Trinidad and Tobago has requested our assistance in facilitating visiting representatives from one of the world’s leading business publications. These representatives are presently in our country undertaking an in-depth survey / business report. This comes on the heels of the latest International Monetary Fund (IMF) Consultation IV Report which highlighted “that the medium- and long term growth prospects are challenging as the country’s energy resources are depleted.” (please refer to page 28). To download and view statement by the Minister of Finance, GoRTT please click: www.finance.gov.tt/content/sp110128024902.pdf

T&T SHIPBUILDING & REPAIR (S&R) CLUSTER

Diversifying our Economy, one Ship at a time©...

Hello S&R Stakeholders,

S&R LeaderSHIP Interviewed for International Business Publication

Emergency Solutions Ltd. & Special Rescue Operations undertake S&R Presentation

Sincerely, T&T Shipbuilding and Repair Cluster. Wilfred de Gannes. Deputy Leader.

On January 21, 2011 Emergency Solutions Limited headed by Managing Director Mrs. Asha Mohammed from Point D'or, La Brea held a special presentation on Shipbuilding and Repair emergency rope rescue. Our special guest speaker was Mr. Alberto Burrero from Special Rescue Operations based in British Columbia, Canada. Mr. Burrero had participated and survived in underground rescue operations in the 9/11 World Trade Centre collapse in New York City, USA. To view additional presentation photographs, please visit our Facebook I NEW LA BREA VISION website.

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AUSTAL LAUNCHES ITS LARGEST CATAMARAN The final stages of construction of Austal’s largest catamaran to date were celebrated this week with a traditional ‘coin ceremony’, followed by the vessel’s successful launch.

“Leonora Christina” is 113 metres and will serve Sweden’s south east coast

Placing a coin at the foot of the mast of a newly constructed ship is an ancient maritime tradition which is believed to bring good luck to the vessel and its crew. Senior Captain Soren Schow travelled from Denmark with a coin from the year 1660. This coin holds significance as it is from the same era as the ship’s namesake, Danish historical icon, Leonora Christina. An Australian two dollar coin was placed alongside the Danish two penny coin in a small box which was fixed below the foot of the mast.

“LEONORA CHRISTINA” will join the 86 metre Austal-built catamaran, “VILLUM CLAUSEN”, which has been operating the route between Rønne on the Danish island of Bornholm and Ystad in south east Sweden for over ten years.

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“We look forward to welcoming Bornholmer Færgen’s newest ferry, “LEONORA CHRISTINA” to Denmark, and are confident that this ship will exceed expectations,” said Senior Captain Schow. The vessel is owned by Danish company Færgen (formerly Nordic Ferry Services), and will be operated by Bornholmer Færgen, a subsidiary of Færgen. Bornholmer Færgen currently operates a fleet of three ships (one of which is “VILLUM CLAUSEN”), and has been transporting passengers to the Danish island of Bornholm since 1866.

The 113 metre ferry was designed and built in Austal’s Western Australian shipyard, and, once completed, will be able to hold up to 1,400 passengers and 357 cars, and travel at speeds of up to 40 knots. Austal was awarded the contract in April 2009 following a competitive international tender process which saw Austal utilise its in-house design team and experience to develop a highly customised vessel design that met all Færgen’s requirements for the route. The vessel has been built in accordance with the requirements and under the survey of Det Norske Veritas, conforming to International Maritime Organisation HSC Code and Danish regulations. Registration will be under the Denmark Flag. With Danish environmental regulations for fast ferries among some of the most stringent in the world, Austal’s design is required to comply with legislation covering environmental noise, wave-wash and exhaust emissions. The vessel is on track to commence sea trials in March, with delivery scheduled to take place in May 2011.

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Austal Chief Operating Officer, Andrew Bellamy, commented that Austal greatly values its customer relationships, and is proud to continue its relationship with the Danish company. “Austal has worked closely with Færgen and Bornholmer Færgen throughout the design and construction of “Leonora Christina”, and is honoured to be part of this ancient maritime tradition, celebrating the final stages of construction of the vehicle-passenger ferry,” said Mr. Bellamy.

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LATEST FLEET OF TUGBOATS HEADS TO THE PANAMA CANAL On December 4, the third in a fleet of 13 new tugboats purchased by the Panama Canal Authority (ACP) began making its way from Hong Kong to Panama. The “SIXAOLA” is expected to arrive at the Panama Canal in mid-February.

Z-Tech 6500 tugs for Panama are built to Lloyds Register of Shipping class, with the class notation LR +100AN Tug, +LMC UMS for service in the Panama Canal and approaches.

The new fleet of tugboats, which will all be named after rivers in Panama, were built by Cheoy Lee Shipyards, Ltd. in China. They are equipped with General Electric 12V 228 main engines, TWIN DISC MCD 3000-8 HD clutches and SCHOTTEL SRP 1515 FP propulsion units.

These new units, that will assist ships transiting the waterway, have an award-winning design, superior components, stronger engines, better clutches and advanced propulsion systems. These tugboats have an output capacity of 5,844 horsepower and a bollard pull of more than 65 metric tons.

Once in Panama, the “SIXAOLA” will join the “CALOVEBORA” and the “CHANGUINOLA”, two recently arrived tugs. The additional tugs are expected to be delivered every 45 days following the “SIXAOLA”.

As part of the completed Expansion Program, the ACP plans to have a total fleet of 46 tugs by 2014. These new tugboats will both augment the existing fleet and replace those with more than 35 years of service.

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Two tugboats behind a huge Pure Car Carrier (PCC) in the Panama Canal.

Expansion will build a new lane of traffic along the Panama Canal through the construction of a new set of locks, doubling the capacity and allowing for the transit of longer, wider ships.

About the Panama Canal Authority (ACP) The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors.

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MAERSK ULCSS MAY TRIGGER CAPACITY RACE Maersk’s rumoured order for 18,000 TEU containerships could change the competitive landscape for the container carriers, with the new designs expected to breach existing vessel dimensions in a significant way.

“EMMA MÆRSK” is the first container ship in the E-class of eight owned by the A. P. Moller-Maersk Group. When she was launched in 2006, Emma Mærsk was the largest container ship ever built.

Currently, the largest containerships, Maersk Line’s ‘E’-class, can carry up to 15,200 TEU, based on Alphaliner’s estimates. These ultra large container ships (ULCS) are too wide for the new Panama locks and can thus be qualified as neo-over-Panamax ULCSs. Maersk Lines initiative has not remained isolated since four more carriers consisting of MSC, CMA CGM, CSCL and COSCO, have so far invested in the 13,800-15,200 TEU neo-over-Panamax ULCSs, either owned or leased. Including the Maersk units, 58 such ships are either sailing or being constructed, according to Alphaliner records. All these ULCSs are currently deployed on the Asia-Europe route, with no expectations to see them plying the transpacific route any time soon.

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To these 58 ships must be added 110 very large container ships (VLCS) of 12,500-13,100 TEU of neo-Panamax dimensions (beam of up to 49m with Loa of up to 366m), which are capable of transiting the new Panama locks. The majority of these ships were ordered in a massive wave starting six months after the Panama Canal Authority officially unveiled the new Panamax gauge in October 2006. After a lull of some two years in VL/ULCSs orders, carriers are now thinking about ordering big ships again. The imminent Maersk ULCS order is expected to trigger off a wave of newbuilding contracts, even if most of carriers so far stated that they will steer clear from ordering vessels of above 14,000 TEU. The current ULVSs of Maersk Line, MSC, CMA CGM and CSCL suggest that such ships can be fully utilised and their huge volume of boxes can be handled swiftly by appropriately designed terminals and by the well oiled logistics networks. Thus, projects for 18,000 TEU ships as rumoured for Maersk Line appear to be viable, especially as the infrastructure exists to support them since most terminals handling the 22-row ‘E’-class vessels can also handle 23-rows ships. Alphaliner has conceptualised a model of the new ULCS design with a geometric intake of 9,000 FEU HC boxes, which have become the staple of the container trades. Based on this, the equivalent nominal capacity of such a vessel could reach 20,000 TEU.

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Sustainable Development: It's not a choice between our environment and our economy; it's a choice between prosperity and decline.

- President Barack Obama (2009)

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A “NEW GENERATION” OF CONTAINER SHIPS

Ship design evolves with the needs of ship owners and operators, who themselves react to a range of external pressures and circumstances. Container ships are no different from any other type in this respect, but they have in recent times been greatly affected by changing economic circumstances and environmental pressures. The latest generation of container ships reflects these changes.

With the economic slump in 2008, a rapid decline in demand for container ships caused a huge reappraisal of the operating pattern of these ships, which had hitherto been designed for fast passages. Cost saving was essential for survival, and most container ship operators drastically reduced their speed, and this had the effect of hugely reducing operating costs through the reduction in fuel consumption. This also had a dramatic effect upon the emissions and, at a stroke, provided owners with an environmental rationale to “sell” slow steaming to their customers, who may not have otherwise have been convinced that they should see their goods travel far slower than before!

It is now suggested, largely for environmental reasons, that slow steaming should become the norm, so that the latest generations of containership to be designed and even ordered will have a smaller, less powerful, engine and a lower service speed. The concerns of shippers at their longer passage times will be addressed by offering greater frequency, with perhaps one or two extra ships on the longer trade routes.

Meanwhile, scale economies that point to the advantages of larger containerships remain compelling, and in every size sector, cargo capacities are increasing. A growing number of major carriers are taking delivery of ships with a greater capacity than 10,000 TEU, and there are indications that at least one major line will order ships in excess of 16,000 TEU shortly. It is argued that every extra box that can be carried reduces the unit cost, and while there may have to be a sacrifice in flexibility because of the reduced number of ports able to take these monster vessels, this may not be too much of a problem, as there is a tendency to use a few major “hub” ports, thence distributing in smaller ships. There is also a not too subtle pressure upon ports and terminals to expand their capacity to take larger vessels.

Other features of the latest designs of containerships include improved safety and anti-pollution features, a need for less ballast to be carried, lower harmful emissions and fuel tanks installed well clear of the bottom and ship’s side. Operational improvements include better designed hulls offering lower resistance.

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INTERNATIONAL NEWS

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INTERNATIONAL NEWS

Boodram's Travel sued by Carnival Corporation & Plc - Jan 31, 2011

Trinidad and Tobago businesswoman Vicky Boodram-Arjoonsingh, who has been sued for millions of dollars by Miami-based cruise ship company Carnival Corporation, now faces an international criminal investigation. Company officials have contacted the Federal Bureau of Investigations and travelled to Trinidad to meet with police, a statement from Carnival said.

The company plans to present documents connected with Boodram-Arjoonsingh's activities, and has asked local police to open a case against her. The company wants a trial by jury, and is seeking triple the actual compensation. It claims that it is owed an initial $40 million by Boodram-Arjoonsingh and her companies for breach of contract.

Attorney for Carnival Corporation Jorge Mestre said the judge has ordered the case be expedited, and that Boodram's legal response was due within a week. Mestre said: "Our brand is very important to us, hence the reason why we brought this lawsuit. The public was being misled and Carnival feels strongly that this must be prevented."

MSC launches direct Central America to North Europe link - Jan 28, 2011

Mediterranean Shipping Co. (MSC) has started a weekly service directly connecting Central America and North Europe with five ships of 1,800 to 2,700-TEU.

The first westbound sailing was scheduled to depart Rotterdam on January 27 and connect the fruit exporting countries of Honduras, Guatemala and Costa Rica with North Europe.

The service encompasses the Freeport-Centram feeder service, retaking the two ships which ply the feeder loop now. A call at the Bahamas hub of Freeport is included both ways, allowing connections with the Caribbean sector and with US East Coast.

The new service will also free up capacity on the North Europe-US Gulf service and on the North Europe-Panama-WCSA service, used previously to cover the Caribbean and Central American markets.

Oil transit through Suez Canal not at risk - Jan 27, 2011

Mr. Fatih Birol, chief economist at the International Energy Agency (IEA), feels that oil transit through the Suez Canal will not be at risk due to the anti-government protests in Egypt. "There is no real threat to flows through the Canal," Mr Birol said. Oil prices ruling at more than $ 100 a barrel has put economic recovery in Europe and the US at risk, he averred.

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Beluga Crewmember Executed - Jan 27, 2011

A crewmember onboard the hijacked heavylift carrier “BELUGA NOMINATION” (built in 2006) has been executed by Somali pirates, according to the Round Table of international shipping associations. Several crewmembers were taken aside for “punishment” after the rescue attempt by the Seychelles’ Coastguard failed. Two crew members managed to flee in a lifeboat and one pirate was killed during the counterattack. The Danish warship Esbern Snare rescued the two crew members. The two men rescued told Esbern Snare’s crew that one crew member was killed during the attack and that several pirates were also killed. The information has not been confirmed. The “BELUGA NOMINATION”, is owned by Beluga Shipping GmbH.

Another ship to be removed from Suisun Bay 'ghost fleet' - Jan 25, 2011. The former steam freighter “SS SOLON TURMAN” (built 1961) will be towed from the Suisun Bay Reserve Fleet (SBRF) on Wednesday, February 2, 2011. This will be the 17th ship to leave the National Defense Reserve Fleet in Suisun Bay, California since October 2009, when the Obama Administration announced an effort to clean up the site and improve the surrounding environment. The departure of the vessel demonstrates that the President and U.S. Transportation Secretary Ray LaHood are making good on their commitment to clean up Suisun Bay. The departure of this ship puts the U.S. Maritime Administration well ahead of schedule in removing obsolete U.S. ships from the Bay area. The disposal schedule called for 20 ships to be removed from SBRF by September 30, 2011. Today’s departure of the “SS SOLON TURMAN” puts us at 85 percent of our goal for 2011. The vessel will be towed from Suisun Bay to the former Mare Island Naval Shipyard in Vallejo, Calif. for recycling by Allied Defense Recycling Company. The ship was a breakbulk cargo vessel built in 1961 by Bethlehem Steel in San Francisco, California. The vessel entered the reserve fleet at the end of its active service in 1988.

Investment needed to position ports for offshore wind boom - Jan 24, 2011.

German company trend:research have released a report saying that there are “huge” opportunities for port operators, shipyards, and shipping and logistics companies, but that the specialist facilities and ships needed will require unprecedented investment. Jerry Hopkinson, managing director, bulks, ports, logistics at PD Ports in the UK said: “There has been a conspicuous lack of urgency in developing a co-ordinated approach in the United Kingdom.

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JAMAICA'S ADMIRAL BRADY, HEADS IMO'S STW SUB-COMMITTEE Jamaica has maintained its position at the heart of international maritime rule-making following the re-election of Rear Admiral Peter Brady, Director General of the Maritime Authority of Jamaica, as chairman of the Standards of Training and Watchkeeping (STW) sub-Committee at the International Maritime Organization (IMO), the United Nations' body governing marine safety, security and pollution prevention.

He was unanimously re-elected for the eighth time as STW Chairman for 2012 at the recently-held 42nd session of the STW Sub Committee which was attended by over 400 delegates from member states party to the STCW Convention as well as associate members, intergovernmental organisations and NGOs.

Admiral Brady was nominated by the Philippines and seconded by Chile with support from member states including India, Malta, Marshall Islands, Panama, Singapore, South Africa, the US, Spain, Bahamas, Mexico, Ghana, Indonesia among others. 2012 will be an important year for the work of the STW Sub-Committee after the Standards of Training, Certification and Watchkeeping Convention (STCW) and STCW Code was amended at a Diplomatic Conference held in Manila from June 21-25 last year.

Acknowledging his re-election, Admiral Brady said: "I am humbled by your very kind remarks and sentiments and would like to thank you for this recognition and demonstration of support and confidence to lead you in this sub committee as your Chairman for 2012 when the Manila amendments to the STCW Convention and STCW Code come into force."

"I thank you for electing me once again and I do so while expressing great pride on behalf of my country Jamaica and indeed the remainder of the Caribbean Region. It is a great honour."

He added: "I thank you also for your cooperation and great sense of purpose as we have set about the task of establishing rules and standards for the seafarers of the world that they may be properly trained, equipped and motivated to operate the worlds' ships safely, securely while keeping our oceans clean.

"Your preparatory work for the successful conclusion of the Diplomatic Conference last year which resulted in the Manila Amendments, is testimony to your enduring interest in their development and to the credibility of the International Maritime Organization (IMO). I am also very proud of the team from the secretariat led by the very capable and knowledgeable Ashok Mahapatra."

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Admiral Peter Brady

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PIRACY SITUATION “UNACCEPTABLE” SAYS UN SECRETARY-GEN UNSG echoes call for urgent and coordinated response as IMO launches anti piracy action plan The escalating problem of piracy off the coast of Somalia is “completely unacceptable” and requires an urgent and coordinated response, United Nations Secretary-General Ban Ki-moon said at the launch of the International Maritime Organization (IMO)’s action plan to promote the 2011 IMO World Maritime Day theme: “Piracy: orchestrating the response” Speaking at IMO’s London Headquarters, Mr Ban welcomed the decision of IMO to pay special attention to piracy during the year ahead. “This is a timely and important initiative,” he said.

IMO has been combating maritime piracy for some time and a series of measures, developed with the co-operation of the littoral States and the support of the industry, helped significantly reduce piracy in the hot spots of the late 1990s and the early 2000s: the South China Sea and the Straits of Malacca and Singapore.

However, the problem has lately manifested itself in other parts of the world, most notably – but not exclusively – off the coast of Somalia, in the Gulf of Aden and the wider Indian Ocean.

Somali Pirates with guns.

IMO Secretary-General Efthimios E. Mitropoulos said “piracy and kidnapping have blighted the maritime community for too long and it is seafarers who bear the brunt.” He added, “We believe that we can use the experience gained and the successes achieved in reducing piracy elsewhere to good effect in the current arena as well, but to do so requires a well orchestrated response.” Mr. Mitropoulos and Mr. Ban were joined at the launch by Ms Josette Sheeran, Executive Director of the World Food Programme (WFP); Mr. Yury Fedotov, Executive Director of the United Nations Office on Drugs and Crime (UNODC); Mr. Robert Lorenz-Meyer, President of BIMCO, representing the shipping industry; and Mr. David Cockroft, General Secretary of the International Transport Workers’ Federation (ITF), representing seafarers. All echoed their support for this latest IMO initiative. Mr Fedotov said, “It is clear that the only viable long-term solution to the Somali piracy problem is to restore law and order in Somalia, including in its waters. It is also clear that this solution is some years off and will require concerted and coordinated international effort. UNODC’s counter-piracy programme focuses on supporting regional prosecutions and on rebuilding Somalia’s criminal justice capacity.” Ms. Sheeran focussed on the humanitarian aspect of the problem. Acknowledging the success of naval escorts in protecting food aid for Somalia, she also highlighted new challenges created by the worsening situation. “The presence of Somali pirates in an ever expanding area

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is of great concern because they threaten not just food bound for directly for Somalia, but our food transiting through the ports of Mombasa (Kenya), Dar es Salam (Tanzania) and Beira (Mozambique) for vital operations in Zimbabwe, the Democratic Republic of Congo and other places with great humanitarian needs.” Speakers at the launch of IMO’s action plan also spoke of the economic cost of piracy. Mr. Ban said, “ransom payments adding up to hundreds of millions of dollars have created a ‘pirate economy’ in some areas of Somalia that make them more resistant to efforts to develop alternative livelihoods. Economies throughout East Africa and beyond are experiencing the fallout.” Representing the shipping industry, Mr. Robert Lorenz-Meyer, President of the Baltic and International Maritime Council (BIMCO) said, “The attacks are not only attacks on ships, but also attacks on the global supply chain in one of the world’s most vital sea lanes. They threaten a supply line of vital interests to the international community.”

MV “FAINA” (built 1978) was captured and a ransom of US $3.2 million had been paid to the pirates. The ship was released the next day.

Mr. David Cockroft, General-Secretary of the International Transport Workers' Federation, representing seafarers, said many crew members were at breaking point because of the stress of passing through the area frequented by pirates. "If the risks cannot be eliminated, then

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seafarers will demand not to sail into the area at all and responsible ship owners will support them," he said. Secretary-General Mitropoulos said IMO’s action plan aimed to make some genuine inroads into what, to date, has been an escalating problem. “In the past 12 months alone”, he said, “there have been 286 piracy-related incidents off the coast of Somalia. They have resulted in 67 hijacked ships, with 1130 seafarers on board – whilst, at present, 714 seafarers are being held for ransom on board 30 ships scattered at various points of the country’s extensive coastline.” IMO’s action plan for 2011 has six prime objectives: • increase pressure at the political level to secure the release of all hostages being held by pirates; • review and improve the IMO guidelines to Administrations and seafarers and promote compliance with industry best management practice and the recommended preventive, evasive and defensive measures ships should follow; • promote greater levels of support from, and coordination with, navies; • promote anti-piracy coordination and co-operation procedures between and among States, regions, organizations and industry; • assist states to build capacity in piracy-infested regions of the world, and elsewhere, to deter, interdict and bring to justice those who commit acts of piracy and armed robbery against ships; and • provide care for those attacked or hijacked by pirates and for their families. Among other things, during 2011, IMO will focus on promoting further co-operation between and among States, regions and organizations in reducing the risk of attacks on ships through a variety of mechanisms including information-sharing; coordination of military and civil efforts; and development and implementation of regional initiatives, such as the IMO-led Djibouti Code of Conduct. IMO’s action plan will build on efforts to tackle the problem that have been underway for some time. Through the Djibouti Code of Conduct, for example, information-sharing centres are being established in Yemen, Kenya and the United Republic of Tanzania, as well as a regional training centre in Djibouti. In partnership with the UNODC, IMO is helping to develop the legal framework necessary to prosecute pirates. Mr. Ban took the opportunity to emphasize where the real source of the piracy problem lies. “Although piracy manifests itself at sea,” he said “the roots of the problem are to be found ashore. This is a complex issue. But in essence, piracy is a criminal offence that is driven by economic hardship, and that flourishes in the absence of effective law enforcement.”

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“The only truly successful way to address the problem in the long term,” said Mr. Ban, “is through a strategy that focuses on deterrence, security, the rule of law and development. Our common goal must be a sustainable solution.” In conclusion, Mr. Mitropoulos said: “This year, we are resolved to redouble our efforts and, in so doing, generate a broader, global response to modern-day piracy. More needs to be done if the ultimate goal of consigning piracy to the realms of history is to be achieved. We hope that our choice of theme for 2011 will provide an appropriate rallying point around which all those who can make a difference can focus their efforts.”

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OTTAWA FACES TRICKY CHOICES IN AWARDING $35B IN

SHIPBUILDING DEALS Stephen Harper is poised to kick off the greatest round of government shipbuilding in Canada since the Second World War.

The massive equipment purchase is also going to give him a political headache.

Pegged at $35-billion, the sums involved easily dwarf the funds committed for the Conservatives' controversial and hotly contested plan to buy $9-billion worth of F-35 fighter jets from Lockheed Martin. It will ultimately pit three regions of Canada against each other and force a difficult choice upon Mr. Harper. He'll have to decide which region to leave in the cold during what could be an election year: the East, the West or Quebec.

The federal shopping list includes a fleet of new defence, patrol and scientific research vessels, from frigates to the John G. Diefenbaker, which will be the most powerful icebreaker Ottawa has ever owned.

The Conservative government will select two marine construction yards for the job of building $33-billion in large vessels – companies that will end up dominating public shipbuilding in Canada for decades.

But by giving two yards the bulk of the work, Mr. Harper is inviting trouble.

Regional anger over procurement decisions are stuff of legend in Canadian politics and have damaged incumbent governments. A 1986 decision by the Mulroney government to award a CF-18 fighter maintenance contract to a Quebec firm over a superior bid by a Winnipeg-based company enraged western Canadians and helped spur the rise of the Reform Party.

Five yards are expected to bid for either one or both of the shipbuilding packages: the larger order to assemble frigates, destroyers and patrol ships – and the smaller to build non-combat vessels including the polar-class Diefenbaker icebreaker.

Ottawa hasn't attached an official dollar figure to these packages, but sources familiar with the matter value the combat order at roughly $25-billion, the non-combat around $8-billion. In the first five to eight years, both packages will pour roughly the same level of investment in shipyard work – and the non-combat order is expected to grow over time to include more replacement Coast Guard vessels.

The bidding competition will heat up this month when Ottawa invites bids for the two large-vessel packages. The federal government is expected to render its decision by August or September.

Winning a contract will mean the right of first refusal to build all the vessels in the package.

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Of the five yards that have made the shortlist for bidding, three are considered major contenders. They include Irving Shipbuilding Inc.'s Halifax yard, Davie Yards of Lévis, Que., and Washington Marine Group's Vancouver Shipyards in North Vancouver, B.C.

Mr. Harper's National Shipbuilding Procurement Strategy is an attempt to change the playbook for Canada's boom and bust shipbuilding industry, laying out a 30-year plan that ensures a steady stream of construction work for at least two yards.

There's a strategic military reason for this too. It ensures Canada, like many of its NATO allies, maintains a constant capacity to build naval vessels.

A politically risky feature of this new procurement style however, is that it concentrates the work into just two shipyards. From an accountant's perspective this makes sense: The winners have better economies of scale, thereby reducing costs – as well as ensuring a buildup of skilled labour at the yards in question.

It's a departure from the way regional politics have forced Ottawa to conduct government shipbuilding in the past, when contracts have been chopped up and spread around. Traditionally, a single ship might be assembled by different yards – ultimately increasing the vessel's price tag.

The consolation price for three losing shipyards is they will be able to bid on an estimated $2-billion of construction work for smaller non-combat ships.

Ottawa says there's enough of these smaller jobs to suffice.

“That's a debatable point,” says Peter Cairns, a retired vice-admiral who heads the Canadian Shipbuilding Association.

The Irving yard, one of Canada's largest, is considered a strong contender to win one of the big contracts – which would leave Quebec and B.C.'s Vancouver Shipyards fighting for the second.

It will be hard for the Tories to ignore Quebec, a province where they're working hard to preserve their hard-fought political gains in the run-up to a possible election. The Davie yard is located in Quebec City, where the Conservatives hold many of their Quebec seats and the need to keep this region happy exerts a powerful pull on Mr. Harper's government. The Tories are even considering abandoning their fiscally conservative principles to help fund the construction of a professional sports arena in Quebec City.

Quebec's Davie shipyard is currently insolvent and under court protection from creditors, but is looking for an investor to help it move forward.

Washington Marine Group CEO Jonathan Whitworth said the process Ottawa has set up has been fair so far. He said, however, that Davie's insolvency “has to be” one factor considered in Ottawa's evaluation of possible bidders.

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“In traditional businesses, either inside or outside government procurement projects, usually you have to be a solvent, going concern.”

Mr. Cairns, however, said it's hard to imagine Quebec being excluded from such a significant procurement project. The political blowback would be immense. Even as it demanded $5-billion in concessions to support the 2011 budget, the Bloc Québécois called for the Davie shipyards to get its fair share of the large vessel work.

“Historically, the idea of leaving Quebec out of a major building program has not been considered politically viable,” Mr. Cairns said.

He said he believes the process that Ottawa has put in place will be fair, but then again, he adds, “Beauty is in the eye of the beholder” and the loser might not see it that way.

The contrast between how the Harper government has handled the F-35 fighter jet purchase and the shipbuilding packages couldn't be more stark.

The Tories opted to go with a U.S. aircraft but made the decision without a competition – a move that's come under heavy fire.

In shipbuilding, the Conservatives have gone to great lengths to firewall the competition from accusations of political influence and ensure the yards are chosen based on the best bids.

They've hired KPMG to design the procurement process, enlisted U.K. marine construction experts to verify each yard's capacity and appointed a “fairness monitor” to referee how decisions are made.

In the end, Ottawa's decision will dramatically change the future for the winning shipyards, which will be able to make a living as construction yards rather than repair shops. A generation of young workers in two regions will be able to plan an uninterrupted career in building new ships.

“What it would mean is there is a future for the industry on the West Coast,” George MacPherson, president of the B.C. Shipyard General Workers' Federation, said. “If B.C. loses, then I think what you are left with on the West Coast is a bunch of small yards. I think you would see the major yard go out of business.”

The alternative is sporadic contracts and repair work.

“It's been feast or famine. … We had full employment four or five years ago. Today we have high unemployment,” Mr. MacPherson said.

Two years ago, he recalled, there were up to 110 shipyard apprentices training, and today three quarters have been lost in the economic downturn.

“If we're successful ... it will be boom days again in North Vancouver.”

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MARITIME INDUSTRY WEB LINKS

ASSOCIATED MARINE DESIGN - www.associatedmarinedesign.com/ AUSTAL - www.austal.com/ BELUGA SHIPPING GmbH - www.beluga-group.com/ CATERPILLAR LOCAL DEALERSHIP - www.tracmac.com/ COMPREHENSIVE INSURANCE BROKERS - www.insurance.co.tt/ CONRADO BEACH RESORT LIMITED - www.conradotobago.com/ ENGINE TECH COMPANY LIMITED - www.man-mec.com/ LLOYDS REGISTER GROUP - www.lr.org/ QUALITY ELECTRICAL SALES & SERVICE - www.qess.net/ INTERNATIONAL MARITIME ORGANIZATION (IMO) - www.imo.org/ IRVING SHIPBUILDING INC. - www.irvingshipbuilding.com/ MAERSK LINE - www.maerskline.com/ MINISTRY OF LABOUR & SME DEVELOPMENT - www.molsmed.gov.tt/ MINISTRY OF TRADE & INDUSTRY - www.tradeind.gov.tt/ NEW LA BREA VISION - www.facebook.com/New-La-Brea-Vision/ NEW LA BREA VISION - www.issuu.com/newlabreavision/ PANAMA CANAL AUTHORITY (ACP) - www.pancanal.com/ PROTEC INTELLIGENCE SERVICES LIMITED - www.protec-tt.com/ T&T SHIPBUILDING & REPAIR - www.tts-r.com/ T&T SHIPBUILDING & REPAIR - www.flickr.com/photos/ttshipbuildingandrepair/sets/

T&T SHIPBUILDING & REPAIR - http://tt.linkedin.com/in/shipbuildingandrepair T&T SHIPBUILDING & REPAIR - www.youtube.com/user/degstt T&T SHIPBUILDING & REPAIR - www.issuu.com/shipbuildingandrepair

WARTSILA - www.wartsila.com/ ************************

Blue highlighted links indicate additional websites added in this month’s newsletter. Red highlighted links indicate Advertisers for the current issue.

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TRINIDAD AND TOBAGO SHIPBUILDER AND REPAIR NEWS PAST ISSUES

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FOR YOUR INFORMATION

To read ‘Statement by an IMF Mission to Trinidad and Tobago,’ please click: http://www.imf.org/external/np/sec/pr/2010/pr10423.htm

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CONTACT INFORMATION

Mr. Wilfred de Gannes, Deputy Leader, T&T Shipbuilding and Repair Cluster, Post Office Box 2853, Chaguaramas, Trinidad and Tobago. Tel: +1(868) 753-6057 Tel: +1(868) 384-SHIP(7447) Fax:+1(868) 662-6326 E-mail: ttshipbuildingandrepaircluster@yahoo.com Website: http://www.tts-r.com

Trinidad and Tobago Shipbuilder & Repair News is edited by T&T Shipbuilding and Repair Deputy Leader Wilfred de Gannes, and published monthly by the Shipbuilding and Repair Development

Company of Trinidad and Tobago Limited. This newsletter is available complimentary via email.

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allowable with appropriate credit.

International Monetary Fund (IMF) supports T&T’s government plans for diversification.

In the latest press statement issued by the IMF, it states: “The mission supports the government’s plans for diversification and structural reform. The focus is on investing in physical and human capital to support the development of a knowledge-based economy, improving the business climate including through a one-stop shop for investors, strengthening the public enterprise sector by inviting private sector participation, and accelerating privatization. It will be important to prioritize government investments in support of diversification particularly in view of the increasingly constrained availability of resources.”

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