Sunday, October 25, 2015

British sub industry warned to keep costs, schedule under control for new generation of submarines

Andrew Chuter, Defense News
22 October 2015

Britain’s nuclear submarine industry has been warned by Defence Secretary Michael Fallon not to repeat the delays and cost overruns of the Astute hunter-killer program when it builds the Royal Navy’s new Trident missile submarines.
“Let’s be in no doubt that our new conventional [Astute nuclear submarine] timetable may have slipped a little but our new ballistic missile submarines cannot be late. There cannot be any threat to the build times, overrunning costs or any other excuses,” Fallon said during a speech Wednesday at an industry briefing to lawmakers and others on the Successor nuclear deterrent program.
The Conservative government is committed to building four of the new 16,000-ton Successor nuclear missile boats and is expected to seek final parliamentary approval for the program in the next few months.
Fallon said industry's failure to deliver was one of the risks to the program.
A number of industry executives, including Ian King, the CEO of nuclear submarine builder BAE Systems, were in the audience to hear Fallon’s warning.
“For 46 years our deterrent has been used every day and night to keep this country safe. If we are to continue that continuity, that continuous at-sea deterrence, there is no room in the program for delay,” he said.
Fallon’s warning follows remarks made Oct. 14 by the MoD’s top civil servant, Jon Thompson, that Successor was the program that most kept him awake at night.
“It’s the single biggest future financial risk we face. The project is a monster ... it’s a significant element of the overall equipment plan ... it most keeps me awake at night,” the permanent undersecretary told a parliamentary public accounts committee hearing.
Thomson acknowledged getting accurate program costs would be difficult.
“It’s an incredibly complicated area to estimate future costs but we will make them,” he said.
BAE Systems, nuclear reactor builder Rolls-Royce and others have been working on the 3.3 billion pounds (US$5.1 billion) assessment phase for the Successor ahead of an expected development and build contract allowing metal to be cut on the first submarine next year.
The first new submarine to replace the existing Vanguard-class of boats is planned to enter service around 2028.
With the Successor program already set to swallow a large portion of the defense equipment procurement budget for more than a decade, government ministers are anxious to avoid the problems encountered in building the Astute submarines.
Fallon’s reference to the Astute program having “slipped a little” is something of an understatement. The third of seven Astute-class boats is now undergoing sea trials but the program is years behind schedule and significantly over cost.
The defense secretary told the parliamentary briefing, organized by the shipbuilding industry lobby group Keep our Future Afloat Campaign, that the Successor project budget was about twice that of the London Crossrail program and three times the budget of the London Olympics.
That puts the Successor program cost at around 30 billion pounds, a figure that likely includes submarines and the upgrade of the Faslane, Scotland, nuclear base, in addition to other costs.
“Spread over the 30-year life of the new boats it represents an annual insurance premium of only 0.13 percent of total government spending, but we get a lot out from what we put in,” Fallon said.
The government is expected to win parliamentary approval for the Successor project even though there is strong opposition from the Scottish National Party and parts of the Labour Party.
Maria Eagles, the shadow defense secretary, told the audience at the House of Commons that Labour Party policy was for a credible, independent nuclear deterrent.
That’s at odds, though, with new party leader Jeremy Corbyn , a long-time supporter of the anti-nuclear movement in the UK, who is pushing for Successor to be canceled.

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