The Joint Support Ship program and the MV Asterix: a Fiscal Analysis
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. Our 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.
The total potential net cost of the government’s 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.
As 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.