European contractor abandoned 5 Wing plan

Private military firm blames red tape for giving up on Goose Bay

Rob Antle
Published on March 27, 2010

A European private military contractor says it abandoned plans to set up shop in Goose Bay because of red tape snaring the use of the base.

Dutch-based E.C.A. Program Ltd. also cited a potential conflict with an existing Department of National Defence (DND) training contract.

A European private military contractor says it abandoned plans to set up shop in Goose Bay because of red tape snaring the use of the base.

Dutch-based E.C.A. Program Ltd. also cited a potential conflict with an existing Department of National Defence (DND) training contract.

DND, meanwhile, insists it went "quite a long way" to help the company in its ultimately unsuccessful efforts to locate in Labrador.

E.C.A. says the proposal - which it finally gave up on last year - would have created hundreds of jobs in Goose Bay.

The firm valued the project at US$1 billion. E.C.A. officials say they were not seeking any government money.

"Everything was financed by a New York investment bank and still is," company CEO Melville Peter ten Cate told The Telegram this week. "We would have brought money, not asked for any."

E.C.A. is instead now working to set up shop on the former NATO air base at Keflavik in Iceland.

According to the Icelandic newspaper Frettabladid, E.C.A. has yet to sign an agreement with the national government in Reykjavik.

While there is local support for the E.C.A. project in the Keflavik area, according to Frettabladid, the Icelandic parliament is divided on the project, and there may not be enough support for the deal to go through.

The Keflavik air base is in a situation similar to Goose Bay, with worries about its future viability.

While the airport serves as Iceland's main international airport, its military use ended several years ago.

The airport once served as a strategically-located NATO military base. The United States officially pulled out of Keflavik in 2006.

E.C.A.'s interest in Keflavik came after years of trying to set up in Goose Bay.

In the simplest terms, E.C.A. acts as the "bad guys" for military training exercises.

Ten Cate says the company provides an integrated opposition force that includes not just aircraft, but ground-based radars, sensors and air defences.

E.C.A. uses "non-NATO" materials - Russian-Indian Sukhoi jets, for example - that ten Cate says make its system "more challenging."

Ten Cate would not talk about E.C.A.'s clients, other than to note it has customers "all over the world" for material that hasn't even been delivered to them yet.

"Our customers are waiting for us, not the other way around," ten Cate said.

Ten Cate said operational officials with the Canadian air force were supportive of the company's plans in Goose Bay. "The infrastructure was great and we had chosen the (German) hangar as our main focus," ten Cate noted.

But a tangle of red tape meant those plans didn't work out, he said.

"There seemed to be some issues as to the economical fate of Goose Bay and the (German) hangar was tied up at the time in the residual value negotiations," ten Cate noted.

"All in all, it was quite unclear if E.C.A. had to negotiate with Ottawa or the German air force for the lease on the hangar. All of these factors combined made it hard for E.C.A. to sustain a viable economic business case out of Goose Bay and that option was later, unfortunately, abandoned."

There was also a conflict with an existing training contract DND had with another company, he noted, "precluding them from supporting the E.C.A. Program with much more then lip service."

But DND says it worked hard to facilitate E.C.A.'s plans in Labrador.

"(We went) quite a long way to help them - as far as we possibly could," DND spokesman Maj. Dean Johnson told The Telegram.

Johnson said the Canadian military has an existing training contract with another company. That meant there was no Canadian requirement for E.C.A.'s services.

As for E.C.A.'s plans to train foreign forces out of Goose Bay, DND suggested the company would need to find another country to act as a sponsor and take responsibility for the operations of its aircraft.

Ottawa could then deal "country to country" with that sponsor, Johnson said, as opposed to dealing with a private company on military training exercises.

Alternatively, Johnson said, DND advised E.C.A. it could contact Transport Canada to explore the possibility of registering its aircraft commercially.

"That aspect of things we left in their hands, and they were free to pursue those two avenues," Johnson noted.

DND also helped with E.C.A.'s plans to acquire hangar space in Goose Bay, he said.

"We did point them to other avenues where they could have explored ... (with) Transport Canada and Foreign Affairs because they have some involvement in the importance of aircraft," Johnson said.

"We did a fair bit of spade work for them with regard to the availability of hangar space in Goose Bay, of various sources. I can tell you, there was a fair bit of work expended on this end to gather prices and facts and figures for them, and contacts, and so on and so forth."

Ten Cate had no issues with Transport Canada, which he said "had a very proactive position on the project" and a "can do" mentality.

Talks on the company's Goose Bay plan went on for years, from roughly 2005 until 2008 or 2009.

Meanwhile, the DND's Johnson stressed that Ottawa continues to actively market 5 Wing.

"We've had some modest successes, but we're working hard to make even greater successes in the future," he said.

"It's a good facility, and we think that it has a great deal of potential, and we're making that known to potential users."