For more than a decade, the U.S. Navy and U.S. Coast Guard have been beating the drum, warning of an "icebreaker gap" with Russia. Meaning Russia has a lot of icebreakers, and we don't.
Ten years ago, the U.S. had only two working icebreakers to keep open sea lanes around both the North and South Poles: the heavy icebreaker USCGC Polar Star, commissioned in 1976, and the newer medium breaker USCGC Healy, commissioned in 1999. In contrast, Russia boasted a fleet of 40 icebreakers, six of which were nuclear-powered.
To help close this gap, the Pentagon proposed acquiring 10 more icebreakers for approximately $16 billion. Ten years later, we've gotten just one of them (USCGC Storis) -- and it's not even new, but bought secondhand and then commissioned into the Coast Guard.
But times, they are a-changin'.
Image source: Getty Images.
This dial goes to 11 (or maybe 14)
Earlier this week, the U.S. Coast Guard wrapped up its awarding of contracts for the construction of not one, not 10, but 11 brand-new "Arctic Security Cutter" (ASC) medium icebreakers. $9 billion was allocated to the effort last year -- but not a penny of it will go to big U.S. naval shipbuilders like General Dynamics or Huntington Ingalls.
In December of last year, the Coast Guard awarded contracts to build the first six new ships. Rauma Marine Constructions will build two of them in Finland (with delivery of the first in 2028). Bollinger Shipyards will build the remaining four at its Houma, Louisiana, shipyard, delivering its first ship in 2029. All six ships will be based on proven designs from Canada's Seaspan Shipyards and Finland's Aker Arctic Technology.
Davie Defense won contracts for the final five ASCs. Two will be built at the Helsinki Shipyard in Finland and three more at Davie facilities in Galveston and Port Arthur, Texas.
Additionally, Bollinger has inherited a contract originally awarded to VT Halter to build three Polar Security Cutter (PSC) heavy icebreakers. The first of those should arrive in 2030.
Bollinger's PSC contract appears to be approaching $5 billion. Plus the $9 billion ASC contract, the total cost of this effort looks to be approximately $14 billion -- for a total of 14 new icebreakers, that's an average of $1 billion each.
Who gets the loot?
The question investors want answered, of course, is whether there's any way to share in all this spending. The answer is: Probably not, or at least not yet.
None of the companies named as participating in either the ASC or the PSC program are publicly traded. Davie, for example, as "the U.S. arm of INOCEA, a UK-owned maritime group," which, according to S&P Global Market Intelligence, is privately owned. Likewise Aker, Rauma, Seaspan, and Bollinger.
That being said, $14 billion is a lot of money, more than 10 times Bollinger's annual revenue, and Bollinger will be doing a lot of the work on these twin icebreaker contracts. These are the kinds of big-league contracts that might convince Bollinger it's big enough to go public through an IPO.
For now, that seems to be investors' only real chance to profit from these contracts. If Bollinger does decide to go public at some point, it would certainly be worth a look.
