27 September 2017
The Turnbull government has hit back at a scathing independent report into the $50 billion plan for a fleet of French-built submarines, declaring it had been produced by “individuals who have no experience in designing, building or operating submarines”.
Commissioned by Sydney businessman Gary Johnston, who launched a push to torpedo the French-built submarines last year, the report from Insight Economics says the selected Shortfin Barracuda submarines carry “excessive costs” and come with strategic, economic, technical and industrial risks.
The report, Australia’s Future Submarine: Getting This Key Capability Right, urges the government to urgently move to acquire a fleet of military off-the-shelf submarines if Australia is to avoid a “very serious capability gap of several years”.
“The most immediate and possibly the biggest risk flowing from the decision to acquire the Shortfin Barracuda — a submarine that is yet to be designed, let alone built — is the inevitable long schedule for its delivery,” the report states.
“Even on the best possible scenario where everything goes according to present plans, the first Shortfin Barracuda becomes operational only in 2033, while the Collins Class submarines are scheduled to be progressively withdrawn at the age of 30, between 2026 and 2033. Even then, under these very benign circumstances where everything goes according to plan, the Navy will have only one submarine in 2034 and perhaps four by 2040. This capability is clearly inadequate.”
Defence Industry Minister Christopher Pyne called the 11-page document a “hatchet job” while Defence Minister Marise Payne said it appeared to be a “beat up” rather than an authoritative contribution to the submarine capability discussion.
The ministers said the consistent advice from Defence and “actual experts in the field” was that there was no military off-the-shelf submarine options that met Australia’s “unique capability requirements”.
“Much of this report is inaccurate and not informed by the facts. The writers of this report have not been involved in the process of the tender or the projects since the tender was completed,” Mr Pyne said.
“The submarine project is on schedule; on budget and will deliver the most lethal and effective weapon in the navy in the 2030s as planned. The Collins Class life of type extension will ensure there is no capability gap in Australia’s submarine fleet.”
Buy off the shelf’
The report blames “both persuasions” of government, from the Rudd government through to the Turnbull government, for the “predicament in which we now find ourselves” and estimates a “whole of life cost” for the 12 new submarines, including the acquisition, sustainment and a possible life extension for the Collins Class, of $180bn.Insight Economics says the question is not whether the Navy needs to renew its submarine capability but what would be the most appropriate type of sub and how many are needed.
While it notes the proposal to extend the life of the Collins class submarines to help maintain “some capability into the 2030s and perhaps beyond”, the report suggests acquiring an evolved version of a military off-the-shelf submarine “built at a fixed price and modified for Australian conditions and requirements”.
“To avoid long and fatiguing transits, this fleet of smaller submarines would be serviced by a tender (mother) ship that could operate much closer to the submarines’ area of operations,” it states.
“This option should cost under $10bn for a 30-year life; much less than (extending the life of the) the Collins option and for a submarine that would have a longer life and be less at risk of detection. Importantly, this approach would also offer an insurance policy if the Shortfin Barracuda program failed, in that more of the military off-the-shelf boats could be acquired. A Collins (life of type extension) would not offer this very important benefit.”
Senator Payne said a modified off-the-shelf submarine was an “oxymoron” and any suggestion the future submarines would not be in service until the 2040s was “uninformed scaremongering”.
“Submarines are among the most complex pieces of machinery on earth. Contrary to the claims made today, modifying an existing submarine to substantially extend its range would involve a complex and risky redesign process,” she said.
The report’s co-author Hugh White, professor of strategic studies at the Australian National University and a former deputy secretary for strategy at the Department of Defence, said he was not surprised by the government’s response.
“There’s a very serious risk, a very evident risk, that the project they now have underway to build a very sophisticated submarine in a very technically risky way is likely to deliver submarines too late after our present submarines are gone out of service,” he told Sky News.
The report argues the government took the “most risky option possible” when it chose the Shortfin Barracuda, which it labels a “new bespoke design”, and says there was “very little cabinet consideration of this enormous investment”.
“While the National Security Committee of Cabinet met five times to consider the Air Warfare Destroyer acquisition, which was basically a MMOTS (modified military-off-the-shelf) platform, ministers had only a very limited time around the Anzac Day long weekend to consider Defence’s much more complex, costly and risky FSM (future submarine) proposal,” the report states.
Mr Johnston, who owns Jaycar Electronics and runs a website for “those concerned about Australia’s future maritime defence”, said he decided to commission a “thorough investigation of the acquisition process” for the future submarine project after the government agreed last year to spend $50bn on the 12 new French subs.
He said the program will not be “regionally superior” as the waters to Australia’s north “teem with nuclear submarines in the 2030s”.
“In a time of a heightened strategic threat, we may lack any credible submarine
capability for a decade or more. And it takes a long time to restore that capability, not
just in terms of platforms but in retaining personnel and being able to train new people,” he said.
“The way forward would not require the government to change existing policy decisions.”
Mr Johnston said the Insight Economics team had consulted “very widely” with local and international strategic experts, admirals, former submarine commanding officers, engineers, shipbuilders and former defence officials to write up the report.
Insight Economics was founded in 2006 and says it is a consulting firm “uniquely focused on both public policy and corporate strategy”
Michael Keating, one of the firm’s directors who helped launch the report at the National Press Club today, is a former head of the Australian Public Service and secretary of three Commonwealth departments, including Prime Minister and Cabinet.
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