The provincial government drew fire in the House of Assembly Tuesday after a Marystown shipyard owner abandoned a bid for major naval shipbuilding contracts.
Kiewit Offshore Services told Marystown, government and union officials Friday the company was withdrawing from the running to be one of two “centre of excellence” shipbuilding yards, part of a $35-billion overhaul of Canadian maritime infrastructure.
Newfoundland and Labrador Business Minister Derrick Dalley said Kiewit dropped out because it’s too busy with other projects right now, but opposition parties said the government should have provided support to keep the bid alive.
Dalley said when he found out Kiewit was pulling out of the running Thursday, he got on the telephone to senior managers in the company.
“They gave us some indication of what their plans were in the short term, in terms of dealing with this issue,” Dalley said.
“The reason they’re making this decision we’re very pleased with; obviously they have a tremendous amount of work, they have a tremendous amount of opportunity in the province.”
But opposition parties said the government should have done more to keep the bid alive.
“I was very disturbed. There’s no doubt that there’s a lot of work going on at the moment,” NDP Leader Lorraine Michael said. “But this really is short-term work, I mean, within a number of years that work is going to be finished.”
Liberal Leader Yvonne Jones said if Kiewit is too busy with current work to devote itself fully to the bidding process, the government should fill the gap.
“I think there’s a responsibility on behalf of the government to ensure that they have the proper resources and they have what they need to bring those contracts home to Newfoundlanders and Labradorians,” Jones said. “I think it’s great that Kiewit has had the success that they’ve had, but let’s build on that.”
Jones pointed out the Department of Business’ whole mandate is to attract investment in the province.
“Unfortunately we haven’t seen any kind of proactive approach like that from the Department of Business since they’ve been in existence in Newfoundland and Labrador.”
Meanwhile, the mayor of Marystown says he’s surprised and disappointed that Kiewit has withdrawn its bid.
Mayor Sam Synard was slammed by former premier Danny Williams last fall when Synard said the provincial government wasn’t doing enough to help the Marystown bid.
At the time, Williams called Synard’s comments asinine and ignorant. “I just kind of shake my head when a municipal leader like Synard comes out with nonsense,” said Williams on Oct. 13. “Sam was just grandstanding, but that’s just Sam. He doesn’t count.”
Synard on Tuesday suggested Kiewit’s decision has vindicated the position he took at the time.
“The premier of the day took great exception to it and some of his cabinet ministers took great exception to it,” he said. “I was told at that time that I didn’t need to worry my little mind about it because the cabinet was on this, this was one of the most important files the cabinet was working on, and they were working with Kiewit to secure a fair process and Kiewit was going to do well and everyone would have lots of work. So maybe the cabinet dropped this file as well, or maybe they didn’t pick it up to have it to be able to drop it in the first place.”
Synard said a Kiewit official told him the company didn’t have the resources to field a competitive bid for the work.
“What they said … is that they were sort of stretched with human resources trying to get a qualified bid team on the job. They’ve almost become too successful, to some degree,” he said. “It’s a strange thing to say, but Kiewit is the major player now in Long Harbour, they’re going to be the prime contractor for the Hebron job, the (gravity-based structure) job. I’m sure they’re going to look at the Lower Churchill. So they’ve become probably the biggest single contractor in the province.”
“The reason they’re making this decision we’re very pleased with; obviously they have a tremendous amount of work, they have a tremendous amount of opportunity in the province.” Derrick Dalley
Kiewit spokesman Kent Grisham said the company didn’t have enough people to put together a proper proposal and so had to make a “difficult and regrettable business decision.”
“We looked at our resources available for the actual proposal process. The process of developing a proposal and submitting it can be huge. It can be very extensive and it takes some specialized folks, specialized engineers, management folks, and with all the other major projects that we have engaged in across Canada over the last year, we really looked at the team and said we can’t pull people away from what they’re doing to come together and develop this proposal and follow that process all the way through.”
Grisham said Kiewit was grateful for the support from all levels of government during its bid, but declined to specify when asked what support the provincial government provided.
“We certainly would not offer any criticism in any way. We thoroughly appreciate the help and support and sense of partnering, if you will, not only with the provincial government but the local folks and others — our labour groups, the affiliated businesses that we would have been working with and did work with up through the stage where we have been. There was a great team effort going, and we wouldn’t offer any kind of criticism whatsoever of the provincial government.”
Synard said while the community had high hopes to land the work, he accepted that Kiewit had to make a tough business decision.
“We’ve got a good relationship with Kiewit officials. They’ve been very good to our community,” he said. “I respect their right to make business decisions, that’s their prerogative. They’re good at what they do, they’re a great business. They’ve been in business 125 years and they’ve never had a losing year; that says a lot about how they manage their company.”
But Wayne Butler, the president of the local Canadian Auto Workers branch that represents workers in Kiewit’s Marystown shipyard, was much more critical of Kiewit’s decision, which he said removes Marystown from landing 30 years’ worth of work in the program, which was to choose two shipyards, one to build combat ships and the other to build smaller civilian craft like coast guard cutters.
“We fought hard as a union. We fought hard to ensure that Kiewit was recognized as one of the shortlist bidders on this whole project,” he said. “It was a project that certainly would have ensured not only the future of the yard in Marystown but the future of the community in Marystown. It certainly would have been a big benefit to the province itself.”
“As a union, we faced battles before, we’ve faced bumps, glitches in the road before, and I guess right now if that’s not a reality, we’ve just got to get our heads around how we move on from here and sit down with the company to see a path forward and direction where we’re going for the future.”
Both Butler and Synard are optimistic that Marystown workers will find more long-term work.
“A lot of us were sitting back with anticipation that we were going to become a major shipyard once again,” said Synard. “Now we have to reach further afield and look at constructing small ships, maybe modules, and a combination of stuff to keep going.”