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Submarine contract: are we out of our depth?

Remember how, back in April 2016 then Prime Minister Malcolm Turnbull breathlessly announced that all 12 of Australia’s next fleet of submarines would be built in Adelaide from Australian steel, with France winning the hard-fought global race for the $50 billion contract – and shutting out the Japanese to whom Tony Abbott had already given a wink and a nod?

It was, of course, all part of a political game for Malcolm to cement his position as our newly minted PM and on 8 May, judging the political climate to favour him, he announced that he had visited the Governor-General, who had agreed to a request for a double dissolution of both houses of our parliament for an election to be held on July 2 2016. His rationale, you may recall, for calling a Double Dissolution election was that his legislative program was being hampered by a recalcitrant Senate: well, that didn’t work out too well did it?

Now we learn that the hastily crafted French contract hasn’t actually been signed and Defence Minister Chrissy Pyne this week spat the dummy and won’t even talk to or meet the visiting French delegation. It’s taking on the characteristics of a Monty Python sketch and we can probably expect the French to respond to Pyne with a classic French insult along the lines of :

“I don’t want to talk to you no more, you empty-headed animal-food-trough wiper. I fart in your general direction. Your mother was a hamster, and your father smelt of elderberries.”

Be that as it may, the ABC have reported – News Corp seems to have missed it again – that :

“The Government has grown so frustrated with the French company selected to build Australia’s next fleet of submarines that Defence Minister Christopher Pyne refused to meet top officials visiting the country this week.”

Naval Group was selected in 2016 to build 12 submarines for the Australian Navy, in the country’s largest-ever defence contract worth $50 billion.

The ABC understands Mr Pyne will only meet the chief executive of the majority French state-owned company once a crucial document, the strategic partnering agreement (SPA), has been signed.

Negotiations on that document have stalled and it is feared they may not be resolved before next year’s federal election.

Defence and industry figures have told the ABC that France and Australia will not be ready before 2019 to sign the document, which is needed before detailed design contracts can be finalised, and submarine construction begins. Defence Minister Christopher Pyne pulls a face as he listens in the House of Representatives

Sources familiar with the process say a goal to sign the vital SPA during a visit to Adelaide this week by French Minister Florence Parly has slipped off course, with fundamental differences that may not be reconciled before early next year.

Concerns over warranties and technology transfer are believed to be the main sticking points in the tough negotiations between the Australian Commonwealth and French-owned Naval Group.

The knock-on effects of delay on the SPA, which covers the guiding terms and conditions that govern the submarine program, and the likelihood of a federal election being called in the first quarter of next year threatens to create a “perfect storm” of uncertainty, with some risk that it could ultimately sink the French project entirely.”

It is worth remembering that the first of these submarines is not due to come into service until 2030 and that’s only if everything goes to schedule.

I’m thinking that it may well be appropriate to start preparing an apology now for delivery to our children and grandchildren for a political decision made in 2016 to save a prime minister’s scalp – who has since been decapitated by his own colleagues – and for which they will have to pay.

13 comments

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  1. Matters Not

    Re:

    some risk that it could ultimately sink the French project entirely

    One can only hope. Paying far too much for far too little.

    will cost Australia a lot more to procure the dumbed down version of the Barracuda submarine than it would have done to buy far more capable nuclear powered Barracudas as a military off-the-shelf (MOTS) purchase from France. If the Navy had acquired, say, four nuclear boats supplemented by six conventional submarines of an existing design to undertake the other roles required of the FSM, the overall cost could have been around $20 billion, as against over $36 billion plus at 2016 prices (the oft-quoted $50 billion represents future inflated costs). The Navy would also have been much better off in terms of capability.

    Jon Stanford and Michael Keating. the mistaken decision on submarines.

    As for increased employment prospects:

    2,800 jobs will be created directly and indirectly, a far cry from the 200,000 jobs that are related to the car industry. Some early estimates suggest we are looking at a cost of around $4 million for every job created.

    One hopes that an incoming Labor government will have the political courage to shout arrête ! (resurrect the guillotine) and then have a complete re-think. But probably not.

  2. Max Gross

    So… there is NO contract to build those subs, right??? Pyne should resign! Australia is is the grip of LNP cretins, crooks and creeps. Only a federal election can resolve this

  3. New England Cocky

    Why is $50 BILLION MINIMUM being gifted to French ship-builders when national governments should be using defence needs to create jobs for Australian voters in Australian industries???

    Every dollar spent in a local business creates about $7 in general town turnover, so this is yet again another example of how stumbling through an economics textbook while at university does not even vaguely resemble proper economic management.

    With no contract in place then the ALP could rightly walk away from the Liarbral Notional$ blundering.

    @Max Gross: Now Max, remember your blood pressure ….. these politicians are alumni from some of the most expensive private schools in Australia, subsidised to excess at enormous taxpayer expense to ensure that their parents could boast about “family financial sacrifice” at neighbourhood cocktail parties. Brains and ability are an anathema to people who can buy their way, or con government into spending enormous amounts on the second rate academic child minding service masquerading as Australian private education to create later business networks.

  4. johno

    I wonder if daggy dad know one end of a sub from the other.

  5. Andrew

    And this is all before the detailed design starts. When the cost and time blowouts will really start.

  6. Andreas Bimba

    This submarine contract is the biggest financial and military purchase blunder any Australian government has made. Labor and the Greens should be attacking this government with great determination over this issue.

    I also hope the guillotine falls on this contract.

    The submarines will cost over $3 billion each in 2016 dollars or $4 billion each over the term of the contract. The conventional design version of the Barracuda which has been ordered is unproven and is high risk given the major propulsion system differences over the nuclear version which is being built for the French navy. Some experts have also concluded that the unusual shrouded propeller design does not suit the lower power output of diesel/electric submarines especially when running on batteries and will increase drag and reduce submerged range.

    The Collins class which are similar sized boats cost less than $1 billion each even though their design process had a lot of mistakes along the way. All significant problems apart from the inadequate diesel engines were overcome. All problems arose from design or construction errors by foreign suppliers. The Collins class remains an excellent long range submarine with the best sensors and weapons currently available. It is very unlikely the French Barracuda class offers any platform advantages that justifies the far higher cost and project risk.

    I agree with Matters Not that six nuclear powered Barracuda submarines plus six large conventional submarines for $20 billion would represent far better value for money, would provide substantially more capability for the RAN, be a much more credible deterrent and could be delivered sooner and with less project risk. The nuclear power option is however probably a bridge too far for Australian politics though.

    A more attainable goal would be to build an additional six Collins class boats locally incorporating the latest versions of the current weapons, sensors and other hardware. In addition build six ‘evolved’ Collins class boats sequenced later that could incorporate many of the advancements of the Saab A26 or the latest German designs and finally to upgrade the existing six Collins class boats with new engines and some of the advancements from the more modern versions where appropriate. This would provide 3 generations each of six boats giving a fleet of 18 which would be easy to replace in lots of six in the distant future.

    https://saab.com/naval/submarines-and-warships/submarines/a26/

    I have no doubts this could all be provided sooner and with much less project risk and with much higher local design/build content for a fixed price contract with Saab/ASC for $24 billion in 2016 dollars which releases $12 billion for the rest of our neglected armed forces. The prime German and French builders could also bid for their closest equivalent to this Collins class based arrangement.

  7. MöbiusEcko

    All this is well and truly good, but how are they going to man them, no matter what submarine or submarine mix they go with?

    They couldn’t fully man the six O-boat fleet, and they are lucky if they can man two or at a pinch three of the six Collins, which have a slightly reduced crew to the O-boat. This is despite the quite generous and deserved submarine allowance. This is also given that at any given time one to two subs will be in maintenance or laid up.

    So if they can’t man a fleet of six, how are they going to man a fleet of 12, even given that two or three will be out of service at any one time for maintenance and layup periods? The enticement to get personnel to join the submarine fleet will need to enourmous, and even then the turn over will probably be high, so they will have to enforce a Return of Service Obligation (ROSO), which may turn people away from joining.

  8. Kaye Lee

    ME,

    There is a lot of money and research going into unmanned vehicles that could augment our submarines (or replace them?)

    The RAN recently acquired several REMUS 100 AUVs and six Liquid Robotics Wave Gliders.

    In July 2017, Defence’s Innovation Hub granted Ron Allum Deepsea Services, based in Sydney, a $3.17-million contract to develop a novel high-performance autonomous glider for long-endurance undersea surveillance.

    DSTG research on autonomous systems led to a further July announcement by the minister on a new Cooperative Research Centre (CRC). The press release says:

    “The first Defence CRC will focus on Trusted Autonomous Systems to deliver game-changing unmanned platforms that ensure reliable and effective cooperation between people and machines during dynamic military operations.”

    ‘To be effective, Defence needs autonomous systems to be highly trusted, robust and resilient and this initiative will bring together the best researchers from industry and universities to develop the intelligent military platforms of the future,’ Minister Pyne said.

    In November 2018, the RAN and DSTG will host the Autonomous Warrior exercise in Jervis Bay.

    https://nationalinterest.org/blog/the-buzz/there-one-simple-reason-drones-may-replace-submarines-22081

  9. Florence Howarth

    This government is great at announcing. Announcing many things many times. They are hopeless at implementation.

  10. Andreas Bimba

    The Saab A26 Extended Range variant has a crew of 20 to 50. Submarines have a very high effectiveness to manpower ratio.

    The RAN has had crewing problems with its current submarine fleet but this has been due to limited funds for personnel, poor working conditions and inadequate planning. Increase pay, improve working conditions, expand and improve training, put the right people in charge! Hardly rocket science.

    http://www.navyrecognition.com/index.php/news/defence-news/2017/august-2017-navy-naval-forces-defense-industry-technology-maritime-security-global-news/5533-saab-expands-its-a26-submarine-offer-with-now-three-variants-to-choose-from.html

    Unmanned underwater vehicles are a very different technology to manned submarines, being far smaller and having far less range for a start. They offer unique benefits and complement manned submarines. The A26 and Barracuda are designed to operate small unmanned underwater vehicles. This situation is similar to unmanned aircraft which complement manned aircraft and provide more options for military commanders.

  11. Kaye Lee

    Andreas,

    Every time I ask what our submarines would be used for, the main answer is surveillance. If that is their main purpose, then other things can do that much better for a fraction the price and much less risk.

    “Enter the small glider ASV. By continuously harvesting energy from the environment, autonomous gliders are able to travel long distances, hold station, and monitor vast areas without ever needing to refuel. That makes them ideal for monitoring an underwater environment for months at a time, including warning of other submarines or adversary AUVs heading towards our submarine or warship.

    The glider’s two-part architecture and wing system directly convert wave motion into thrust, and solar panels provide electricity for sensor payloads. The glider is equipped with GPS and sophisticated computers for navigation and payload control, with satellite communications systems, and with sensors to monitor beneath and ahead of them. Comprising a float about the size of a really thick surfboard on the surface, sporting solar panels and an aerial, the actual winged glider with sensors and other smarts is tethered around 7 metres below the surface.

    Gliders can be released by almost any navy ship, well out of harm’s way. They can even travel to a distant area, collect data, and return for maintenance without ever requiring a ship to leave port. In 2012, two Wave Gliders completed a world-record 9,350-nautical-mile crossing of the Pacific Ocean, from San Francisco to Hervey Bay in Queensland, providing proof of the reliability and endurance of this new technology.”

  12. Andreas Bimba

    Sinking ships is the main purpose of submarines, especially naval ships and amphibious landing forces. Submarines remain the best for this but these autonomous vehicles have some unique advantages and complement submarines.

  13. Christopher J Ward

    Many years ago, I was approached by someone acting for the Australian submarine Consortium, with a view to becoming part of the project management team, in a senior capacity (whatever that might mean) and it didn’t take me long to realise that they wanted to hire scapegoats and not manage defence projects. The whole business of Australia and submarines is laughable, or it would be if not deadly serious. The current project won’t deliver a weld, nut or bolt in the right place in my lifetime. Australian governments have no balls because if they had, we would have had the Virginia class nuclear submarines on offer. Despite the claptrap from those who champion various forms of diesel-electric and hydrogen power, UK submarines and quite possibly US counterparts have circumnavigated the globe underwater and the only real problem has been food. There must surely be some rationality looking at a continent the size of Australia which is more or less the same as the US excluding Alaska and probably a longer coastline. I was, and remained sick and tired, of hearing about international threats to our sovereignty because talk is cheap and if political hot air could be used as a fuel, we wouldn’t have to worry about nuclear or conventional warships. I don’t think we have a credible defence policy and I base that on what I’ve read. Talking about delivering new submarines in the 2030’s is patently ridiculous. We either need defence or a defender and at present, I don’t think we have either.

    The ASC is still something of a sheltered workshop, encouraged for South Australia, by South Australians with clout in the right areas. I am not in any way casting aspersions on the workforce but a history of the Collins class boats is not pretty and although we have not managed to lose one along with its crew, we have come mighty close. Even the thought of renovating this disaster, a contradiction in terms, gives me what my grandmother used to refer as the willies.

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