Federal takeover clause in shipbuilding contract
Posted Oct 24, 2011 10:34:06 AM.
This article is more than 5 years old.
The federal government will not be tolerating any delays or cost over runs as the Halifax Irving Shipyard works to fulfill a $25 billion contract to build navy combat vessels.
A unique clause in the agreement framework allows the government to take over the yard and the project in such an event.
Defence Minister Peter MacKay said he’s not aware of any precedent when the clause has been invoked.
“I am aware, as I think most Canadians are, of the history of ship building that has been boom and bust and has left a number of shipyards in real dire straits,” MacKay told reports Monday. “This is a clause, or a unique aspect of the contract, designed to protect taxpayers’ investment, in this case, a significant one.”
MacKay said he hopes the clause is never invoked.
