MacDonald, Dettwiler and Associates signs $706M Radarsat Constellation deal

MONTREAL – Even though the final costs for the RADARSAT Constellation mission went from $600 million to more than $1 billion, the multi-satellite project is being described as a “win-win-win” situation.

Those comments were made at a news conference on Wednesday as MacDonald, Dettwiler and Associates Ltd. (TSX:MDA) announced a $706-million deal with the Canadian Space Agency for the construction of three satellites.

The contract will lead to the completion of construction, the launch of the satellites planned for 2018 and the first year of operation of the satellite system.

The project will build on technology that MDA has developed through the RADARSAT-1 and RADARSAT-2 missions.

Federal Industry Minister Christian Paradis joined CSA president Steve MacLean and MDA’s Mag Iskander to launch the final stage of RCM at the company’s satellite systems plant in the Montreal suburb of Sainte-Anne-de-Bellevue.

Paradis admitted he ordered an audit as the costs were rising. He appeared satisfied with the end result.

“We have a fixed-price contract, with a technology which will be the best according to our needs and now we can go (ahead) with a good outcome in the most cost-effective way for taxpayers,” he said.

The project was delayed as negotiations on the final construction stage continued to the last minute.

Mag Iskander, president of MDA Information Systems, said RCM gives the company “a strong new foundation for the future.”

“This means jobs for approximately 200 highly skilled employees for the next six to seven years.”

Iskander also told reporters that laid-off workers would now be recalled — although he admitted some had left the company.

“We are reversing the notices immediately and we feel confident enough that we will build this on time, on schedule,” he said.

MDA laid off workers after last year’s federal budget created uncertainty about future funding for the final phase of the project.

Paradis noted that $216 million had already been spent on concept studies. Development of the RCM program first began in 2005.

NDP industry critic Helene LeBlanc remains concerned about the cost overrun of the project.

“In 2010, the project was estimated to cost $495 million (and) this new figure is 30 per cent more,” she wrote in an email.

But LeBlanc added that she is happy the project is finally moving forward.

MacLean stressed there is now a contractual date and MDA is required to launch the satellites in 2018.

He described the negotiating session, which took place over several months, as one of the best he’s ever seen.

“The MDA team was creative, they were transparent and they were detailed.”

The three satellites will provide complete coverage of Canada’s land and oceans and can be used for maritime surveillance, disaster management and monitoring environmental change.

The Canadian Space Agency’s website says the basic mission includes three satellites, but RCM is designed so that could be expanded to six satellites.