Author Topic: Canada got rebate on defective subs: report  (Read 1613 times)

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Canada got rebate on defective subs: report
« on: May 03, 2012, 12:23:14 PM »
Canada got rebate on defective subs: report

Postmedia NewsMay 2, 2012

The Canadian navy submarine HMCS Windsor is lowered into the water from a dry dock after undergoing a five year refit at CFB Halifax.
Photograph by: Paul Darrow, Reuters

Canada obtained a partial compensation for second-hand submarines purchased from the United Kingdom that required more than $1 billion in repairs and upgrades, according to a media report Wednesday.

The Canadian government paid about $378 million to get the four vessels from the United Kingdom in 1998 through a lease-to-own contract, with other provisions for costs such as training, said a government spokesman.

But four years later, Canada was asking for compensation, according to a newly-released British government letter obtained by CBC News.

"I can confirm that in 2002 and 2004, the Canadian government asked for compensation to be paid for the submarines due to concerns about their condition and ability to meet the Canadian requirements," wrote the then British junior minister of defence, Peter Luff, according to the report.

"The Ministry of Defence did not pay any compensation; however, an amendment to the contract was agreed where the cost of the final submarine was reduced by two million British pounds ($3.2 million at current exchange rate) as an act of good faith and without liability."

A spokesman for Julian Fantino, Canada's associate national defence minister, noted that the purchase was made before the Conservatives formed the government.

"The Royal Canadian Navy's current submarine fleet was purchased under the previous Liberal government," said Chris McCluskey. "Our government is investing to ensure we have the right mix of naval capabilities to protect Canadian sovereignty."

The vessels were named after four Canadian cities, Chicoutimi, Corner Brook, Windsor and Victoria. But only one is active in the sea, the HMCS Victoria, the report said.

One sailor was killed in the maiden voyage of the HMCS Chicoutimi during its first Canadian voyage in 2004.

The ship named after Corner Brook was damaged on the ocean floor last June and is out of service, while the HMCS Windsor underwent extensive repairs, according to the CBC.

A spokesman from Canada's Public Works Department, Sebastien Bois, confirmed that there were some reductions in the contract adding up to two million pounds, "based on factors identified in the contract."

Bois added that no further compensation was being sought by the Canadian government.

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