A report released today shows that Australia’s future submarine (FSM) project is extravagantly expensive, highly risky and, in an era of heightened tensions in the Asia Pacific, compromises the future defence of Australia.
The report shows that the proposed acquisition will be Australia’s biggest ever defence acquisition project, will cost far more than necessary and, because of its extended delivery schedule, will probably leave a very serious capability gap of several years when Australia may have no operational submarines at all.
Mr Gary Johnston, a Sydney businessman and owner of the website Submarines for Australia, today published the independent report on the FSM that he commissioned from Insight Economics – Australia’s Future Submarine: Getting this Key Capability Right.
“I have been very concerned about Australia’s defence acquisition process for a long time,” Mr Johnston said.
“The Super Seasprite helicopters failed completely at a cost of $1.4 billion, enough to pay for two teaching hospitals.”
“When I saw last year that the government proposed to spend $50 billion on twelve new French submarines with only a design concept and no proper evaluation or competitive tender process, I thought ‘enough is enough’. I decided to commission a thorough investigation of the acquisition process for the FSM and see if there wasn’t a better way forward, with a lower cost and fewer risks.”
“This report by Insight Economics, to be launched by Professor Hugh White at the National Press Club in Canberra today, is the result of that process.”
“The Insight Economics team has consulted very widely in Australia and overseas with strategic experts, admirals, former submarine commanding officers, engineers, shipbuilders and former Defence officials.”
Mr Johnston said that it was clear that governments from both sides of politics were to blame for the situation we currently are in. To quote from the report:
‘In 2009, the Rudd/Gillard governments talked a good game in terms of acquiring 12 advanced submarines and then did virtually nothing over the following four years to begin the acquisition process. The Abbott and Turnbull governments approved a grossly inflated acquisition budget for the submarines, established a flawed process that resulted in the costliest and most risky acquisition approach possible over an unacceptable timeframe and then, for political reasons, stated that the submarines must all be built in Adelaide, regardless of cost.’
“The report shows that by selecting a design partner rather than a platform, Defence was able to avoid being subject to all the checks and balances that had been established so carefully over the years to reduce the risk of procurement disasters. There was no competitive process between two or three contractors for a project definition and fixed price contract, no off-the shelf option to be considered and, as far as we can tell, limited scrutiny by Ministers and other departments of State.”
“And the decision to build all the submarines in Adelaide regardless of cost was made by one Minister on the hop. Defence and the government-owned naval shipbuilder have not performed well recently. Three air warfare destroyers have cost us three times as much as they should have done and will be delivered three years late. On the other hand, local industry has provided value for money in past naval projects that were managed competitively with the private sector mainly building the ships with fixed price contracts.”
“The cost of the 12 submarines beggars belief,”said Mr Johnston.
“The report estimates a whole of life cost, including acquisition, sustainment and a life extension for the Collins class, of $180 billion. The current forecast acquisition cost of each new submarine is $3 billion, over four times that of the latest Japanese submarine, a relatively large platform like Collins, which cost under $700 million.”
“The report sets out in vivid detail the high risks surrounding the acquisition. Based on painful experience, it is almost certain that, as a new design, the cost and delivery will blow out substantially. There are major technical risks in building such a big, developmental submarine and significant risks in operating it ‘up threat’ in North Asia.”
“The government says the FSM will be ‘regionally superior’. It will not. For a start, the waters to our north will be teeming with nuclear submarines in the 2030s. It is also highly disturbing that the FSM reportedly will not deploy air-independent propulsion or Lithium-Ion batteries, two breakthrough technologies that can allow conventional submarines to remain totally submerged for up to three weeks.”
Mr Johnston said that the greatest risk was of a capability gap.
“The report shows that there is a strong possibility that the first FSM won’t be operational until 2040. With the Collins class reaching the end of their lives in 2026 to 2033, this is a terrible situation. The government is looking to extend the six Collins boats for ten years – at a reported cost of $15 billion, enough to buy 18 new submarines with a thirty-year life. Experience shows that upgrades to 1980s designed platforms just don’t work.”
“So 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 by building platforms but in retaining personnel and being able to train new people.”
“The report proposes a way forward to address the capability gap in the future and, by introducing some competition, provides an insurance policy against the excessive cost and risks around the Shortfin Barracuda in the longer term.”
“The way forward would not require the government to change existing policy decisions.”
“First, rather than extend Collins, take urgent steps to acquire six off-the-shelf submarines, modified to extend their range and built in Adelaide if cost-effective. And also, because of the long transits to the Navy’s areas of operations, acquire a submarine tender – a mother ship – that could be forward based on Australian territory and provide a better amenity for the crews. Together this should cost under $10 billion.”
“Second, bring forward the review of future submarine technologies flagged in the 2016 Defence White Paper. The review would consider whether we should either acquire more, much cheaper, modified off the shelf submarines; or build the Shortfin Barracuda; or set in motion the lengthy and costly process to acquire nuclear submarines. The criteria would be capability requirements and value for money.”
Mr Johnston said that in his view two of the prime responsibilities of government were to provide for the effective defence of Australia and to spend taxpayers’ money in a considered and responsible manner.
“Government has failed badly on both counts in the submarine acquisition. It urgently needs to lift its game.”
Once again the people who are in charge of the development of Australia’s future submarine are saying the same things that got them into trouble in the past.
In the Weekend Australian Oct 29-30 2016, Rear Admiral Stephen Johnson (US Navy retired) claimed that, anyone who says that you can’t put a diesel engine into a nuclear submarine design doesn’t know what they are talking about. Mr. Johnson now has the job as General Manager, Submarines, in the Australian Defence Depts Capability and Sustainment Group (CASG.) Of course he would say that.
He further claims that many aspects of the future diesel design, e.g. cooling and generation systems, galley arrangements, hydraulic steering, (etc) will be similar. He does not mention that over 22,000 pages of sensitive classified information on DCNS submarines have been leaked to the public allegedly by disgruntled ex-employees. So much for security!
They are tarred with the same brush.
Rear Admiral Greg Sammut, head of the Future Submarine program at CASG notes that (the submarine), ..”it’s a new design because no existing design meets our requirements.” (Echoes of the SeaSprite fiasco.)
He also said, “it’s going to take a period to get sufficient design maturity before we start construction.”
What they do not understand is this:
Australia cannot afford the luxury of a custom-designed submarine. Why?
- Because there is NO TIME to do this.
- By their public statements, Defence Dept have admitted that the design (even if they manage to fit a diesel piston engine to a nuclear sub) will take 15 years at least including testing and evaluation
- By the best estimate the deeply flawed Collins class submarines will be worn out completely by 2025. They may not even last that long.
- A decision by our Defence Dept to build a custom designed Future Submarine should have been made about 15 years ago. This would have been right in the middle of the SeaSprite custom helicopter fiasco and politically difficult. So they sat on their hands for 15 years. This is woefully delinquent.
- We will now have a situation where, if the Defence Dept and their cronies have their way we will be without a front line submarine fleet for at least 15 years. That’s like owning a house in a dodgy neighbourhood without a front door.
A common management mistake in the sporting world is to make “Managers” out of people who have retired from sport. Frequently these people are hopelessly unqualified for the job, and are only hired in the first place out of “loyalty.”
Note that the “Management” in the case of the Future Submarine project are ex-boat drivers. They have no actual expertise in project management but get a job anyway.
It is these hopelessly out-of-their depth people who are tasked with the job of spending $50 billion of taxpayers money.
Worse, they have no sense of urgency, because they have only ever worked in bureaucracy.
The potential gap of up to 20 years in a front line submarine fleet is the massive consequence of the absolutely inept Dept of Defence.
Submarines For Australia
On April 26 this year, the Turnbull Government announced that the French shipbuilding consortium, DCNS were awarded the rights to design and build our next diesel (piston) submarine in Adelaide. It appears that they have not actually drawn up a design or signed a contract yet, just made an announcement.
Even though the April 26 announcement was fairly vague (and it appears there have been no further press releases or updates since) this original announcement is astonishing.
- Right now, there is not one operational French Barracuda submarine in service. The first version is still in a shipyard, yet to be launched. Sea trials and operational work up will take years.
- That submarine is nuclear powered, not diesel
- The boat that the Australian Government has chosen is a version of above retrofitted and re-designed with a diesel piston engine. As far as we can tell no–one ever in the history of submarine construction has tried to convert a nuclear submarine to a diesel one.
- As you can imagine, the lead time to make this version is open-ended. There has been no estimate in the April 26 press release to give a timeline. It is therefore quite likely that under this scenario, Australia will not have an operational submarine fleet in this hiatus.
- They could have chosen a workable state-of-the art existing diesel submarine from either the Germans or the Japanese but chose a very complicated option.
- This is horrifyingly reminiscent of the “Seasprite” helicopter fiasco when we tried to make an ASW (Antisubmarine Warfare) helicopter from airframes that had been in the Arizona desert since the ‘60’s. The exercise was aborted after we spent $1400 million ($1.4 billion). They never entered service in Australia. This time we are looking at a $50 billion dollar experiment with frightening parallels to the Seasprite fiasco.
- By the time all of this pans out, everyone else will undoubtedly have a nuclear attack submarine fleet. Putting a diesel piston submarine against a nuclear one is like putting a piston/propeller fighter up against a modern jet. We will be condemning our sailors to their graves.
- Ask yourself: Why would the Government do this?
We think that we know the answer.
WHAT WE NEED TO DO:
It is clear that if the Government goes ahead with the Diesel Barracuda idea the design phase will take so long that deciding to make the submarine in Adelaide is meaningless. The workforce will have dissipated by then.
If it turns out that we wake up to ourselves and decide to buy nuclear powered submarines for our future fleet, then building them in Adelaide will be impossible.
The Governments own estimates are that building the submarines in Adelaide will create 2800 jobs. This is a very small figure compared to what it would cost, i.e. $50 billion.
It would be far cheaper to subsidise the car industry and keep 10’s of thousands of jobs and skills in Australia – and not just Adelaide.
We definitely need a submarine fleet, but it makes real sense to buy them from a reliable supplier, who will both guarantee delivery and undoubtedly be at least 30% cheaper.
Right now, in a time of relative peace, we may naively think that military hardware is no longer a sound investment, but over the next 50 years, (and this is the time span we are talking about) the likelihood of conflict is great. We are only one catastrophe away from armed conflict. Just look at the Spratly Islands right now.
Debate over Defence matters generally does not excite the public or the media. This must change. It is far, far too serious an issue to not have full public coverage and disclosure of this.
Australia has had a policy of forward defence for well over 100 years. This policy has served us well and the forward defence that a submarine affords us is a sound continuation of that.
WHO ARE WE?
This ad has been placed by a number of concerned businessmen some of whom have paid for it as a patriotic gesture. We hope to run the ad a number of times to embarrass both the Defence Dept and the Government into “coming clean” over this matter. We are not affiliated with any political party nor do we represent any military contractor.
The names of the individuals who have started this appear below. We have nothing to hide.
– Gary Johnston (Spokesman, Sydney)
– Dick Smith (Sydney)
– John Singleton (Sydney)
– Boyd Munro (Dunblane)
– John Tait (Bendigo)
We encourage your feedback (however the website is still in an embryonic stage).