Japan strugles to woo Australia in bid for $35 billion submarine contract

Matt Siegel, Reuters
26 August 2015

ADELAIDE, AUSTRALIA – Japan's effort to charm Australian politicians and the public over its bid for a A$50 billion ($35.60 billion) submarine project appeared to stumble on Wednesday, with officials from Tokyo resisting pressure to commit to building the vessels in Australia.
Japanese defence officials and executives from Mitsubishi Heavy Industries and Kawasaki Heavy Industries made their first major pitch to build 12 stealth submarines for Australia's navy during public briefings in Adelaide, a ship-building hub.
Once seen as the frontrunner to win the contract, the Japanese bid has since come under scrutiny over whether Tokyo would build any of the submarines in Australia, where manufacturing jobs are a hot-button political issue.
Rivals ThyssenKrupp Marine Systems of Germany and France's state-controlled naval contractor DCNS have both said they would build entirely in Australia, emphasising the economic and political benefits of their proposals.
The European firms have also courted the Australian defence industry and media in key cities.
The Japanese delegation, led by retired Admiral Takahashi Saito, stressed Japan's cutting-edge technology, track record in manufacturing and strategic relationship with Australia during an open forum for local industry leaders.
But two sources present at separate private meetings between Japanese and Australian officials said the Japanese did not seem to have much understanding of the political sensitivities and appeared to have lost ground to their rivals.
They said the delegation gave few details about the Japanese proposal beyond reassurances they would adhere to the bidding rules.
"It seems like the (Australian) federal government just told them that they had to come down here and talk to us," one source told Reuters under the condition of anonymity because he was not authorised to speak to the media.
"I think they're really struggling to connect to the public. It's just not in their DNA to speak publicly about defence issues."
A defence industry source in Tokyo said the German bid was shaping up as the one to beat.
"There is some concern in the Japanese government," said another industry source in Tokyo familiar with the proposals.
Both sources said Japanese defence ministry officials had informally asked U.S. contractors with close ties to Japanese industry, including Raytheon Co and Lockheed Martin Corp , to advise Mitsubishi Heavy on managing its first ever bid to sell military equipment to an overseas government.
No Secret Deal
Australian media has said Australian Prime Minister Tony Abbott and Japanese Prime Minister Shinzo Abe privately agreed last year that Japan would get the contract, which also involves maintenance of the vessels. Both sides have denied such a deal.
The issue dominated a news conference held by the Japanese delegation.
"The current situation has us a little bit perplexed and confused why such speculation is still being voiced," said Masaki Ishikawa, director general for acquisition reform at Japan's Ministry of Defence.
Ishikawa declined to be drawn on whether Japan would build the submarines in Australia.
Abbott has described Japan as Australia's "closest friend in Asia.” The United States is also keen to spur security cooperation between two key allies.
Officials in Adelaide, capital of South Australia state, insisted on at least 70 percent local worker participation in the project.
"The French and the Germans have been out there in the public domain making their case and, look, that's understandable because this is an argument that will be determined in the court of public opinion," South Australia defence minister Martin Hamilton-Smith said in an interview.
Influential independent Senator Nick Xenophon, who met with the delegation privately, told Reuters the Japanese had put themselves in a position to play catch up.
Senator Sean Edwards, chairman of the economics committee in the upper house of Australia's parliament, said he had repeatedly told the Japanese officials the political importance of pledging to build in Australia.
"They get it," he told Reuters.
The Japanese declined to meet with labour union leaders, said Glenn Thompson, assistant national secretary of the powerful Australian Manufacturing Workers Union.
"We would have thought the Japanese ... would have liked to have talked to the unions," he said.
Each of the bidders has been asked to provide three estimates: one for construction overseas, one for a partial assembly in Australia and one for a full build in an Australian shipyard.
An expert advisory council is expected to deliver its recommendation in November.
($1 = 1.4047 Australian dollars)
(Additional reporting by Tim Kelly in Tokyo; Editing by Lincoln Feast and Dean Yates)

Australian military to get cozier with U.S.

Defense Minister’s Speech Thursday Will Preview Coming White Paper’s 20-Year Military-Upgrade Plan

Rob Taylor, Wall Street Journal

27 August 2015

SYDNEY – Australia’s coming strategic blueprint will call for more closely entwining its military with its U.S. counterpart, including a more visible presence in the country of U.S. naval ships and warplanes.
Defense Minister Kevin Andrews was to give a preliminary outline Thursday of the 20-year, $300 billion Australia dollar (U.S. $214 billion) plan to boost the military, which will be detailed in a future white paper.
“Through this white paper, the government will seek to broaden and deepen our alliance with the United States, recognizing that the U.S. alliance will remain fundamental to our security and defense planning and the highest priority for our international cooperation,” Mr. Andrews planned to say in a speech to U.S. and Australian business groups. Parts of the speech were obtained in advance by The Wall Street Journal.
The much-delayed paper, now expected in October, is based on the long-standing belief that Australia’s security is most effectively underpinned by a strong U.S. presence in Asia, offsetting a more assertive China.
But while it will lay out a more muscular approach in line with Washington – and welcome the U.S. strategic rebalance toward the region, as Mr. Andrews’s speech says – it will also look to avoid overt criticism of Beijing.
Six years ago then-Prime Minister Kevin Rudd enraged China, Australia’s biggest trading partner, with a defense white paper that argued Beijing’s rise posed regional security risks.
Prime Minister Tony Abbott has promised to boost military spending to 2% of gross domestic product inside a decade, with a military budget of A$32 billion next year and a cumulative A$132 billion over the next few years.
Last year Australia ranked sixth globally in weapons imports, according to the Stockholm Institute for Peace Research, spending almost A$14 billion on arms.
A large chunk of the added spending will go to a stronger open-ocean presence for Australia’s navy, including eight new submarines, nine frigates and up to 20 corvettes at a cost of A$89 billion. Australia is also introducing two amphibious carriers and missile destroyers as well as stealth fighter planes.
Submarine makers from Japan, France and Germany are pursuing the business. Japanese shipbuilders and defense officials were in Adelaide on Wednesday to push a 10-year, A$50 billion deal for Soryu submarines. Japan is seeking to become a major weapons exporter for the first time since World War II.
“This white paper will deliver a future Australian Defense Force that is potent, agile and ready to respond whenever our interests are engaged across the world,” Mr. Andrews was to say in his speech, according to the excerpts.
It added that “Force Posture Initiatives” being discussed with the U.S. and likely to be reflected in the white paper would enhance the ability of their militaries to operate together, building on current rotations by U.S. Marines in Australia’s north.
“We are also continuing to develop enhanced cooperation between the Royal Australian Air Force and the United States Air Force, and we are examining a range of practical options to enhance naval cooperation,” the speech says.

Why India's submarine fleet is deployed for just 6 out of 10 days

Sudhi Ranjan Sen, NDTV
27 August 2015

Indian submarines, on an average, are available for just six out of 10 days for operational deployment. And of every 10 tasks allotted to the fleet, it has to drop at least one, a senior Naval officer told NDTV.
India needs at least 24 conventional submarines but only has 10 - which includes a nuclear submarine leased from Russia in 2002. The last conventional submarine was acquired in the late '90s. Each conventional boat in the fleet is around 20 years old.
In contrast, China has 60 -- 48 conventional and 12 nuclear submarines. Pakistan has five submarines and is acquiring 8 Shang class submarines from China.
The depletion of submarine fleet isn't the Navy's only cause of concern.
"We have major issues with spare parts that reduces availability of platforms," the officer told NDTV. India's efforts to reverse engineer spares have been successful, "but it is not perfect," the officer said.
"The aging fleet means that the stress to run the boat is more and leaves the crew with less and less time for critical tasks," the officers added.
Submarines are critical for "sea-denial" - refusing the enemy space to navigate and dominate the sea. Indian Navy's charter spreads over a vast mass of water stretching from Gulf of Aden in the West to the Straits of Malacca in the South.
In 1999, the government had approved a 30-year submarine building programme. The plan proposed building six submarines in India by 2012 and six more by 2030.
But although India signed up with French Weapons manufacturer DCNS to acquire six Scorpene Disel-Electric attack submarines in 2005, the process has been delayed by half a decade.
The first boat - INS Kalvari, being built in Mumbai's Mazagon Dock - will be out for sea trial this year and is expected to join the Navy in late 2016.
The plan to build six more submarines under the "Make in India" programme is yet to take off. South Block is yet to decide which shipyard should be given the contract.

Japanese delegation denies secret submarine deal between Japan and Australia

Susmita Pathak Mishra, International Business Times
27 August 2015

Japan delegation with a bid to build Australia’s next submarines has denied it is involved in rumoured secret dealings with the Australian federal government to win the contract.
Masaki Ishikawa, one of the representatives of Japan’s defence ministry, said during a press conference in Adelaide on Wednesday that such speculations did not come from Japan, and that they should not be blamed for it.
The Japanese delegation also said the federal government has already warned the bidders, which include France and Germany, about the “competitive evaluation process.” The final submission with all details will be submitted by the end of November 2015.
However, the delegation from Japan remained tight-lipped when asked about where they would prefer building the new fleet of Australian submarines if their contract is successful. Instead, representatives indicated that they planned on presenting three options, including building in Australia, in Japan and in both countries.
“At this moment we have not yet determined which is good and which is bad,” the head of the delegation, Admiral Takashi Saito said to the media.
Representatives of the bid said that if successful, the deal would strengthen the strong defence bond between both countries. It is the first time Japan is sharing its advanced and sensitive technology with another country.
In February 2015, Prime Minister Tony Abbott had denied any agreement was made on the submarine deal with Japan regarding replacement of old submarines with Japanese Soryu-class vessels. Today’s delegation in Adelaide introduced 200 representatives outlining the Soryu class submarines.
Defence Industries Minister Martin Hamilton-Smith of South Australia specified that the government is clear about building submarines in Australia, especially in Adelaide. He also mentioned that approximately $50 billion will be spent on building and maintaining the next fleet of Australian submarines.

Coming soon to the Australian Navy: Japanese submarines?

Geoff Slocombe, The National Interest
26 August 2015

If Australia is to choose the Japanese contender for their future submarine then it should be because it’s the best fit for our ongoing strategic requirements, fully meets project criteria, and is the most economically viable from now until the end of the 2060’s. This decision shouldn’t be a ‘captain’s pick.’
The Soryu-class (‘Blue Dragon’) submarine provides the capability the Japanese Maritime Self-Defense Force’s needs. But the current Soryu-class won’t meet
Australia’s requirements. We will need Soryu Mark Two (Goryu? ‘Australian Dragon’) as a completely new design, which will have cost, performance and schedule risks. It won’t be a Military off-the-Shelf (MOTS) acquisition, as some seem to think. Similarly, the hull can’t be built in Japan and fully fitted out in Australia.
The Soryu fleet includes six commissioned vessels, which have a surface displacement of 3,480 tons (compared with the Collins-class 3,100 tons) and are 84 meters long. A further five are in various stages of construction. There’s a continuous build program, with both Mitsubishi Heavy Industries (MHI) and Kawasaki Heavy Industries (KHI) involved and alternating the start of each new vessel.
There are a number of major changes required for Mark Two in evolving a design to meet RAN’s requirements. This is no simple matter and presumably the CEP will establish how this could be accomplished.
The Soryu-class are currently operated and maintained for a service life of 20 years. Australia will want 30 years. Welding techniques, the steel used, corrosion control and number of compression/decompression cycles from deep dives all affect service life. So too do the maintenance and upgrade arrangements—Japan will need to create a new upkeep plan for Mark Two.
Australia needs a greater range than the current Soryu. The Collins-class has a range of 11,500 nautical miles at 10 knots surfaced and 9,000 nautical miles snorkeling just sub-surface at the same speed. Fully submerged it has a range of 480 nautical miles at 4 knots, when running on lead-acid batteries. Soryu has a surface range of 6,100 nautical miles at 6.5 knots, faster underwater. This will need to be increased in Mark Two by more fuel-efficient engines and extra bulk fuel storage—perhaps by filling some water ballast space with fuel, to get longer range.
Remaining silently at depth for periods of up to 35 days, while travelling slowly for approximately 4,000 nautical miles in the patrol area, will be important for Australia’s next submarines. Although not specified explicitly in the CEP criteria, Australia needs an excellent Air Independent Propulsion (AIP) system and specialist batteries to give the required endurance.
The Japanese have obviously made significant progress with Lithium ion batteries (LiBs) to the point where they are proposing that the final two Soryus being constructed in Japan about 2020 abandon their Stirling AIP engines and have only LiBs. LiBs are much more energy dense, providing up to four times as much power in the same space as occupied by classic lead accumulators. If this happens, this is a major technology advance as currently no commissioned diesel-electric submarine in the world has gone to sea with LiBs.
Diesel engine-driven battery charging technology needs to adapt to the new requirements—the need for much more electrical power for faster charging possible with LiBs. Currently, Soryus have two chargers, while Collins-class have three. This has significant implications for detectable snorkel depth battery charging time, which means that Soryus currently may have the higher indiscretion ratio. Mark Two must do much better.
Soryu Mark Two will be offered with a permanent magnet synchronous electric motor, with the advantage that brings of high torque at low revolutions, keeping propeller noise to a minimum and avoiding the need for a gearbox.
The Soryu-class have a Hitachi command and control system, while Australia wants the U.S. AN-BYG-1 installed, a first for Japan. In terms of weaponry, the Soryus can launch Type 89 torpedoes, Harpoon missiles, and mines. Australia wants Mark 48 Mod 7 CBASS torpedoes, mines and probably the same UGM-84C Sub-Harpoon missiles as fitted in Collins Class. There will also be issues over which type of sonars should be fitted.
Cultural differences between the Japanese and Australian defense industries will be challenging. If they’re lining up an Australian-based partner to help them deal with the serious issues ahead, there’s been no public disclosure as yet.
The best chance for a successful Mark Two design and construction program with MHI and KHI, as Australia’s international partners, appears to be a hybrid build. The first one or two submarines would be built completely in Kobe, with heavy involvement by Australian designers and shipyard workers there, before construction shifts to Adelaide for the remaining vessels in the project.
In the political arena, given that China is Australia’s number one trading partner, what would be the impact of teaming with Japan and the U.S. in what will be seen by China as a strategic coalition to contain their naval expansion? Neither French nor German CEP contenders have this problem.

USS Seawolf completes 6-month Arctic deployment

Fast attack submarine USS Seawolf (SSN 21)

Commander, Submarine Group 9 Public Affairs, Navy News Service
25 August 2015

BREMERTON, Wash. – The fast-attack submarine USS Seawolf (SSN 21) returned to its homeport of Naval Base Kitsap-Bremerton Aug. 21, following a six-month deployment.
During the deployment, Seawolf conducted routine submarine operations, which included scheduled under-ice transits and under-ice operations.
"The crew performed superbly on multiple operations in the 6th Fleet area of responsibility," said Cmdr. Jeff Bierley, Seawolf's commanding officer, from Birmingham, Alabama. "We conducted two polar transits, including a routine surfacing at the North Pole. Operations under the Arctic are part of the Navy's continued commitment to maintain access to all international seas, and Seawolf was just part of that commitment."
The Navy has been operating in the Arctic for decades and it is expected that presence requirements will likely increase as maritime traffic in the region increases. Ships like Seawolf support the Arctic national strategy by developing capabilities, increasing maritime awareness and preserving freedom.
"Seawolf did an exceptional job; they had an accelerated fleet readiness training period so they were really pushed to get all of their preparations, training and certifications done before deployment, including preparations for the very challenging Arctic transit," said Capt. Douglas Perry, commander, Submarine Development Squadron 5, from Alexandria, Virginia. "Arctic transits are important, not just for us to be able to keep our fleet assets around the globe, but it also give us an opportunity to maintain undersea dominance of the Arctic spaces, an area that is very challenging and is changing dramatically."
This was the first deployment for many of the Sailors aboard Seawolf, awarding them the unique experience of visiting the North Pole.
"It was a very interesting deployment full of mixed emotions and the unexpected," said Yeoman 3rd Class Felipe Aparicio, from Los Angeles. "Surfacing at the North Pole was awesome. As you push through the surface it takes your breath away. You feel the ice hit the hull of the boat and you hear thumping back and forth all around you; then it just stops. It was a memorable experience. We got out of the boat, and the best way to describe the North Pole is that it's a cold, snowy desert."
These polar transits and the surfacing of submarines demonstrate the U.S. Navy's commitment to assure access to all international waters. USS Nautilus (SSN 571) was the first submarine to complete a submerged polar transit.
"We are very happy to be home to the Pacific Northwest, and we are eager to spend time with our family and friends," said Bierley.
Seawolf, commissioned July 19, 1997, is the first of the Navy's three Seawolf-class submarines. The Seawolf is significantly quieter than any Los Angeles-class submarine. It is also faster, has more torpedoes tubes and can carry up to 50 torpedoes or missiles, or 100 mines.
All of the Seawolf-class submarines are homeported in the Pacific Northwest – USS Connecticut (SSN 22) and Seawolf at Bremerton, Washington, and USS Jimmy Carter (SSN 23) at Naval Base Kitsap-Bangor.

Analysis: A meeting of fears, not minds

Growing Russian-Chinese military links belie deep differences between a rising and declining power

Jonathan Eyal, Singapore Straits Times
24 August 2015

LONDON – Western military planners, and particularly those in Washington, are watching closely as China and Russia launched their largest joint naval exercises last week, bringing together seven Chinese ships with 18 Russian vessels in the Sea of Japan. For, although Chinese officials have been careful to point out that the manoeuvres are "not targeted at any third party and are not relevant to the regional status-quo,” Russian Defence Minister Sergei Shoigu made no effort to hide his own country's opinion that the United States was the chief factor in China and Russia conducting more exercises.
"We believe that the main goal of pooling our efforts is to shape a collective regional security system," Mr. Shoigu said, in a clear reference to the enduring presence of U.S. naval power in the Pacific.
Facts speak for themselves.
While the Chinese and Russians have staged periodic naval exercises for more than a decade, the ships taking part in the naval manoeuvres – which are set to run until Aug 28 – are far better equipped than those put to sea in the past. Both nations are investing heavily in their navies. And both will be practising a joint amphibious assault on an imaginary enemy's land-based fortifications, just the sort of manoeuvre calculated to send shivers down the spines of leaders in Japan, the Philippines and Vietnam. Nevertheless, the growing Russian-Chinese military alliance should not be taken too seriously. For it is still not a meeting of strategic minds in Beijing or Moscow, but a haphazard arrangement between a rising and a declining power. The Chinese certainly understand this; the only question is whether the Russians, who are far needier in this case, also comprehend this reality.
Common Threats
The Chinese and Russian governments now describe their relationship as a "strategic partnership,” since the two nations see themselves as the victims of previous colonial wars and powers.
Both Russia and China are also ethnically diverse, vast countries which are hard to govern, with a history of domestic collapse and the loss of vulnerable bits of their territories. Preventing the recurrence of such troubles by insisting on tight domestic controls and a fierce defence of existing borders and international law concepts, such as the sovereignty of states, is a shared objective in Beijing and Moscow.
And both Russia and China see the West in general and the U.S. in particular as an obstacle and often a threat to their long-term strategic aspirations.
Yet the similarities end there. The current position and the future trajectories of Russia and China cannot be more different. In 1990, the USSR had one quarter of China's population, but the Soviet economy was 11/2 times bigger than China's. However, just a year later when the Soviet Union disintegrated, Russia ended up with one-eighth of China's population and only half of China's economy, the sort of abrupt change in the strategic balance seldom before encountered in the country's history.
And, since then, it's all been downhill for leaders in Moscow. Russia's gross domestic product is now less than a fifth that of China, and, by 2030, it may be no more than 12 per cent.
More significantly still, the Chinese military now outspends Russia's by a factor of two-to-one. In short, the Russians are no longer China's "Big Brother"; they barely qualify for the status of a poor uncle.
And although, for a variety of reasons, the Chinese have gone out of their way to be nice to the Russians and have been very good at indulging Russia's compulsive need to be treated as a Big Power – Mr. Xi Jinping made Russia his first port of call after becoming Chinese president, for instance – the reality is that the world views of strategic decision-makers in Beijing and Moscow remain vastly different.
For Russian officials, the key obsession is to avoid a further decline in their world rankings; for the Chinese, the main preoccupation is how to handle the country's rise without triggering off a global backlash.
Russia uses force first, and only later thinks of the economic consequences of its actions; meanwhile, the Chinese are masters at using economic might as a substitute to the iron fist.
The Russians see their sphere of influence as a defined landmass area which they physically control; the Chinese perceive their influence zones as a more fluid zones in which nations are allowed leeway, within confined but not always fixed boundaries.
And, finally, while Beijing views involvement with Europe and the U.S. as ultimately a transactional issue, a matter of a cold calculation between costs and benefits, Russia's relationship with the
West is all about emotions, about belonging to European culture yet often being rejected by the rest of Europe.
Comparison Of Two Navies
China and Russia deploy the second and third-largest navies by the number of ships, respectively. They also share an interest in acquiring new technologies, such as very quiet submarines, multi-role platforms and hypersonic anti-ship missiles.
But, yet again, the differences between the two navies are more important than the similarities.
Russian naval doctrine, essentially unchanged since the 1970s, emphasises a presence on the high seas and nuclear deterrence; the aim is to have up to a third of Russia's nuclear warheads on submarines.
But the Chinese emphasise asymmetric methods of maritime warfare, which means that China is not proposing to match U.S. naval capabilities, but rather acquire enough capabilities to project Chinese power overseas, protect key Chinese strategic objectives, and deny the U.S. complete freedom of action in the Pacific, especially in waters close to China's coastline, and to Taiwan.
The biggest difference between the two countries lies in the way they propose to use naval power. Russian President Vladimir Putin's intentions to pour large resources into his navy is domestically controversial, because Russian naval investment is usually associated with failure: the Russian navy last won a major battle in 1853 and, for the first half of the 20th century, its most stinging defeats were in Asia, courtesy of Japan.
By contrast, the Chinese navy is increasingly being seen as the true protector of Chinese national sovereignty. Rallying domestic political support for Chinese naval expansion is easy, particularly since the navy appears to be the only Chinese military service able to not only protect land Beijing considers as its own, but also humiliate the Japanese, keep the Americans at bay and hold the prospect of a military recovery of Taiwan.
In short, the entire way Beijing and Moscow look at the use of naval power is almost diametrically opposed. For China, the waters of the Pacific are an absolute priority and
necessity; for the Russians, the Pacific is largely a question of status. And then, there is the Arctic, where the Russian navy is actually deeply suspicious of any Chinese moves.
So, why are the Russians and Chinese navies bothering with the on-going high-profile exercise? The Chinese still rely on acquiring – through purchase, industrial espionage or reverse-engineering – technologies which the Russians have, particularly those which relate to special metals used in the construction of submarines as well as other naval engineering capabilities in shipbuilding.
The Russians are also determined to smother China with love, as the only alternative to manage Beijing rise. And both may have a short-term interest as well as deriving some pleasure from baiting Japan, or from poking a finger at the U.S. Navy.
But as Mr. Tony Brenton, a former British ambassador to Moscow and a noted observer of Sino-Russian relations once shrewdly pointed out, the links between the China and Russia are not about love, or even a marriage of convenience, but an "Axis of Insecurity,” an association driven by a range of shared fears, rather than an agreement on how to deal with them.