Irving Shipbuilding Inc. is purchasing the Shelburne Ship Repair yard from the Nova Scotia government for $1.
Irving, which has leased the facility from the province since 1997, decided recently to exercise its option to buy the yard.
The transaction will also see Irving take hold of an adjacent federal water lot. Nova Scotia Business Inc., the province's business development agency, is buying the water lot from the federal government - and will then turn around and sell the lot to Irving.
Sarah Levy, a spokeswoman with NSBI, couldn't say how much Irving is paying for the water lot. The assessed value of the lot is $68,000.
The price of the shipyard, however, has been determined: $1.
The lease agreement between Irving and the province included an option to purchase the site for $1, provided the company met certain requirements along the way, mainly concerning employment levels at the site.
According to Levy, the province is content to let the site go for a buck, so long as the repair yard continues to provide jobs in the rural area.
"Our goal at NSBI is to have a functioning and sustainable shipyard business at that site. Irving is a great company to do that. They've been operating the shipyard for some time," she said.
"The key here is to make sure that people are working there. Irving is willing to make renovations and make that happen."
Irving was the only company to bid on the yard's lease in 1997. In early January of this year, the Nova Scotia government gave Irving an $8.8-million loan to upgrade the 50-year-old shipyard: $6 million to rebuild the marine railway and $2.8 million for wharf repairs.
The bulk of the loan, $6.6 million, will be forgiven if Irving meets nine criteria, including a pledge to employ 68 workers, said Toby Koffman, a spokesman with Nova Scotia's Economic and Rural Development department.
Irving spokeswoman Mary Keith confirmed the purchase of the water lot and Shelburne yard, which is currently not in operation.
"Today, the company is undertaking significant investments in improving the wharf and the marine railway at the site. Given these investments to secure the long term future of the shipyard, an agreement to purchase makes good business sense," Keith said in a statement.
According to Keith, work on the marine railway will be complete by year's end, while the wharf repairs will be finished by spring 2011.
Currently, 27 employees are working on the Shelburne site. When operations resume, roughly 60 people will be employed at the site, said Keith.
Located on the southern tip of Nova Scotia, the Shelburne yard is used by Irving for repairing small vessels.
In January, company president Steve Durrell said the yard, when upgraded, will win contracts for larger vessels.
"This upgrade opens up markets we couldn't compete in before because we couldn't haul the ships out of the water," Durrell said at the time.
The Opposition in Nova Scotia, however, criticized the loan.
The Liberals accused Fisheries Minister Sterling Belliveau, who represents the Shelburne riding, of providing political rewards to his constituency.
Leo Glavine, the Liberal finance critic, said the NDP was providing funds to the shipyard while refusing to continue a subsidy to the ferry in neighbouring Yarmouth, a riding held by a former Conservative cabinet minister.
"It's business as usual," said Glavine. "The NDP is essentially using the Industrial Expansion Fund as a political slush fund - not much different than the way the Tories used it."
Belliveau, however, defended the subsidy as a wise investment that will create jobs.
Irving, which has leased the facility from the province since 1997, decided recently to exercise its option to buy the yard.
The transaction will also see Irving take hold of an adjacent federal water lot. Nova Scotia Business Inc., the province's business development agency, is buying the water lot from the federal government - and will then turn around and sell the lot to Irving.
Sarah Levy, a spokeswoman with NSBI, couldn't say how much Irving is paying for the water lot. The assessed value of the lot is $68,000.
The price of the shipyard, however, has been determined: $1.
The lease agreement between Irving and the province included an option to purchase the site for $1, provided the company met certain requirements along the way, mainly concerning employment levels at the site.
According to Levy, the province is content to let the site go for a buck, so long as the repair yard continues to provide jobs in the rural area.
"Our goal at NSBI is to have a functioning and sustainable shipyard business at that site. Irving is a great company to do that. They've been operating the shipyard for some time," she said.
"The key here is to make sure that people are working there. Irving is willing to make renovations and make that happen."
Irving was the only company to bid on the yard's lease in 1997. In early January of this year, the Nova Scotia government gave Irving an $8.8-million loan to upgrade the 50-year-old shipyard: $6 million to rebuild the marine railway and $2.8 million for wharf repairs.
The bulk of the loan, $6.6 million, will be forgiven if Irving meets nine criteria, including a pledge to employ 68 workers, said Toby Koffman, a spokesman with Nova Scotia's Economic and Rural Development department.
Irving spokeswoman Mary Keith confirmed the purchase of the water lot and Shelburne yard, which is currently not in operation.
"Today, the company is undertaking significant investments in improving the wharf and the marine railway at the site. Given these investments to secure the long term future of the shipyard, an agreement to purchase makes good business sense," Keith said in a statement.
According to Keith, work on the marine railway will be complete by year's end, while the wharf repairs will be finished by spring 2011.
Currently, 27 employees are working on the Shelburne site. When operations resume, roughly 60 people will be employed at the site, said Keith.
Located on the southern tip of Nova Scotia, the Shelburne yard is used by Irving for repairing small vessels.
In January, company president Steve Durrell said the yard, when upgraded, will win contracts for larger vessels.
"This upgrade opens up markets we couldn't compete in before because we couldn't haul the ships out of the water," Durrell said at the time.
The Opposition in Nova Scotia, however, criticized the loan.
The Liberals accused Fisheries Minister Sterling Belliveau, who represents the Shelburne riding, of providing political rewards to his constituency.
Leo Glavine, the Liberal finance critic, said the NDP was providing funds to the shipyard while refusing to continue a subsidy to the ferry in neighbouring Yarmouth, a riding held by a former Conservative cabinet minister.
"It's business as usual," said Glavine. "The NDP is essentially using the Industrial Expansion Fund as a political slush fund - not much different than the way the Tories used it."
Belliveau, however, defended the subsidy as a wise investment that will create jobs.