Paul Barratt and Chris Barrie. The case for building the future submarine in Australia

When charting a trajectory to a desired end point it is as important to have an accurate fix on the starting point as it is to know where one wants to end up. So it is with SEA 1000, the Future Submarine (FSM) project.

Much of the commentary is based on a politically inspired perception that the Collins Class submarine project (‘Beazley’s subs’) was a disaster characterised by cost over-runs, delayed delivery, intractable technical problems, and chronic unreliability once introduced into service.

The facts are that the submarines were built to within 3-4 per cent of the original contract price after allowing for inflation, that the average delay in delivering the submarine compares well with other major projects, and that the overwhelming consensus among military insiders is that the submarine project was a great success, with regular claims being made that the Collins Class submarines were the finest conventional submarines in the world[1]. Certainly they are highly regarded by the US Navy.

Furthermore, in 2000 the Government acquired all of the shares in the Australian Submarine Corporation (ASC – now ASC Pty Ltd) so it began the new century in possession of a highly capable submarine builder and maintainer, with associated facilities and skilled workforce.

Some of these painfully acquired advantages were compromised in the first decade of the 21st century by the fact that the submarines were introduced into service without a validated strategy for sustainment throughout the life of the class[2], and without an adequate inventory management system[3]. This in turn compromised availability, with flow-on consequences for crew training and inevitability the availability of trained crew. These situations have largely been rectified.

Our industrial advantages were further compromised by the fact that from the moment the Howard Government acquired the outstanding shares in ASC, it saw ASC as something it was preparing for sale. This got in the way of Governments reaching the simple and obvious conclusion that the successor to Collins should be built onshore by the successful submarine builder it already owned, with the focus of attention being on the required characteristics of the replacement submarine and which overseas submarine builder should become our design partner for the FSM project.

This ambivalence towards ASC, and the feeling that there might be someone out there who would give us an off-the-shelf solution or a bespoke submarine, has led to a succession of governments spinning their wheels for so long that we are now committed to a multi-billion dollar life extension of the obsolescent Collins submarine as well as the cost of FSM, so any potential savings have long since vanished.

To compound this error, there is strong circumstantial evidence that former Prime Minister Tony Abbott did a handshake deal with Japanese Prime Minister Abe to acquire Soryu submarines from the Japanese – a deal he walked away from on the eve of the first challenge to his leadership. In walking away from the deal he set up a ‘competitive evaluation’ (whatever that might be) of potential partners, a process which over time seems thankfully to have drifted back in the direction of being a thoroughgoing evaluation of potential partners.

Is there a military off-the-shelf (MOTS) solution out there? Many of those who see proposals to build a purpose-designed submarine in Australia as an indulgence and/or a branch of industry policy rather than defence policy would assert that there is. The Abbott Government seems to have thought so, based perhaps on advice in 2010 to then Opposition Defence Spokesman David Johnston by Vice-Admiral Robert Thomas, Commander of the U.S. Seventh Fleet: ‘you want to find the finest diesel-electric submarine made on the planet – it’s made at Kobe works in Japan’[4]. “Finest submarine for what?”, one might ask.

Those who think the Japanese Soryu submarine is the solution would do well to read Option J for FSM – a Japanese solution?, Rear Admiral (Retd.) Peter Briggs’s comparison of the Soryu with the Collins Class published by the Australian Strategic Policy Institute.

We would contend that there is no off-the-shelf solution, and this is the testimony that a range of expert witnesses gave in 2014 to the Senate Economics References Committee inquiry into naval shipbuilding, leading the Committee to recommend that

  • the Government formally and publically rule out a MOTS option for Australia’s future submarines
  • the Government focus its efforts on the ‘new design’ or ‘son-of-Collins’ options for Australia’s future submarines and suspend all investigations for acquiring a MOTS submarine, including the current Japanese Soryu-class[5].

Having heard a range of evidence on the advantages of a local build, the Committee concluded:

Given the weight of the evidence about the strategic, military, national security and economic benefits, the committee recommends that the government require tenderers for the future submarine project to build, maintain, and sustain Australia’s future submarines in Australia.

When selecting its preferred tenderer the government must give priority to:

  • Australian content in the future submarines; and
  • proposals that would achieve a high degree of self-reliance in maintaining, sustaining and upgrading the future submarines in Australia for the entirety of their lifecycle[6].

We agree with this conclusion, based upon the evidence presented to the Committee. We note in particular the evidence of Rear Admiral Briggs that the ability to build, sustain and evolve in country puts us in a much better position to manage the cost of ownership[7], and the evidence of Commander Frank Owen of the Submarine Institute of Australia regarding the experience with sustainment of the Oberon Class:

We were second cousin, twice removed of the logistics support capability surrounding that submarine. When the host nation stopped operating them, the supplies dried up and we had occasions [where] submarines were unable to sail because of vital components and spare parts that were unavailable[8].

We also agree with Rear Admiral Briggs that there is no point in buying a submarine that does not do the job:

There is no point spending any money on a submarine that does not do what you need it to do. You have to modify and extend to get a new Collins-like capability. Buying an off-the-shelf submarine with a 6,000-mile range would be worse than a waste of money; it would be an illusion. You will think you have submarine capability and the day you want to use it you will find that it cannot get there or stay there and do the job[9].

Finally, there are some important geo-political considerations to be brought to account. Former Prime Minister Tony Abbott commented in Tokyo in February that “for Japan this submarine deal is strategic: for the others, it’s commercial”. That seems to us a good reason to stay away from the Japan option, not only for the reasons cited by Hugh White and many others, but because our interests would be better served by a partnership with an experienced exporter that values its commercial reputation. Japan’s main interest would be served the day the contract is signed; for the Germans and the French, to protect their commercial reputation, the objective is successful, timely delivery of the project.

Second, the submarine arm of the US Navy has demonstrated a high regard for the capability of our purpose-designed submarines, and for working with us in relation to submarine training, exercising and operations. If we simply became the operators of Australian-crewed Japanese submarines, would they sustain that interest?

Our conclusion is that the Government should proceed with all due diligence in accordance with the November 2014 recommendations of the bipartisan Senate References Committee, and not be distracted by the siren-songs of those who would argue that there is a cheaper, lower risk, “adequate” option to be found elsewhere.

Paul Barratt AO, Former Secretary, Department of Defence

ADM (Retd.) Chris Barrie AC, Former Chief of the Australian Defence Force.

 

 

[1] Yule, P. and Woolner, D., Steel, Spies and Spin: The Collins Class Submarine Story, Cambridge University Press, 2008, pp. 325-6.

[2] Australian National Audit Office, 2008-09, Management of the Collins-class Operations Sustainment, paragraph 3, at

http://www.anao.gov.au/Publications/Audit-Reports/2008-2009/Management-of-the-Collins-class-Operations-Sustainment/Audit-brochure

[3] Ibid., paragraph 11.

[4] Bloomberg 2014, ‘Australia Mulls Japan Submarines Under China’s Cautious Gaze’, Bloomberg Business, 18 December, at http://www.bloomberg.com/news/articles/2014-12-17/australia-mulls-japan-submarines-under-china-s-apprehensive-gaze.

[5] Senate Economics References Committee, Part II: Future of Australia’s Naval Shipbuilding Industry: Future Submarines, page 38.

[6] Ibid., p. 21.

[7] Ibid., p. 29

[8] Ibid., p. 31

[9] Ibid., p. 61

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One Response to Paul Barratt and Chris Barrie. The case for building the future submarine in Australia

  1. Christopher Skinner says:

    This article from two authoritative authors is disappointing in that it reflects a valid view in first quarter 2015 when the Competitive Evaluation Process [CEP] was started. What has developed since is an effective competition that addresses the issues in this paper and many others of critical importance. The CEP has highlighted the selection is for a design partner that will work with Australian industry and academia to develop the Australian unique design the authors desire, but with the credibility of proven submarine building expertise from their home country. ASC Ltd has vital expertise but as the RAND study found has nowhere near the necessary capacity which will be the most important challenge to be met over the next three years to a construction contract in 2019

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