The Canadian government on Wednesday will award two huge shipbuilding contracts worth a total of about C$33 billion, the lion's share of the largest single military procurement in the NATO country's history, Reuters reports.
Seaspan Marine Corp, whose Vancouver Shipyards Co Ltd is one of three finalists, said in a release that it expects an announcement at 4 p.m. (2000 GMT) Ottawa time.
The other finalists are Irving Shipbuilding Inc's Halifax Shipyard in Nova Scotia, and a Quebec-based joint venture that involves SNC-Lavalin Group and Korea's Daewoo Shipbuilding and Marine Engineering .
One of the two finalists will build combat vessels, and the other will build non-combat ships. Those two contracts will total about C$33 billion. The losing shipyard will still be in the running for a C$2 billion contract to build smaller non-combat vessels, to be awarded later.
SNC-Lavalin owns 70 percent of the Quebec-based joint venture that bid to build non-combat vessels at Quebec's 200-year-old Davie shipyard, and Daewoo is a technology partner.
"We do not believe that SNC-Lavalin's share price is currently factoring in much, if any, value related to this potential award. As such, we believe there is good upside potential in SNC-Lavalin's stock price if the Davie Canada group's bid is successful," wrote TD Securities analyst Michael Tupholme in a research note on Tuesday.
The procurement program, announced in June 2010, is meant to revive Canada's shipbuilding industry while modernizing its Navy and Coast Guard fleets, where some vessels have been in operation for more than 50 years.
With thousands of jobs at stake and one region of the country sure to be disappointed, the federal government has taken pains to avoid accusations of favoritism.
The program is being run by a special quasi-independent secretariat, and the government hired outside consultants to evaluate bids and attest to the fairness of the process.