Future Frigates ‘problems’ put pressure on SA defence contracts: Martin Hamilton-Smith

Former state defence minister Martin Hamilton-Smith says there’s a chance SA could “lose” its defence contracts, as a new report reveals concerns about delays and performance of the Future Frigates.

Former state defence minister Martin Hamilton-Smith says concerns being raised about the reliability and performance of the Future Frigates being built by BAE Systems are “very worrisome’’ and there is a chance the state could “lose the lot’’ if problems with the process are not ironed out.

News Corp Australia reported on Tuesday that an internal defence department report has warned that the $45bn Hunter Class frigates will be “substantially’’ slower, have a shorter range than originally intended and could be vulnerable to detection by enemy vessels.

The report has also warned that local defence companies are being passed over for contracts with BAE claiming local ­industry content requirements are “a complicating factor for system design maturity”.

Mr Hamilton-Smith, who now heads up the Australian Sovereign Capability Alliance (ACSI) said concerns were certainly being raised by local defence industry suppliers that they were not being adequately involved in the project – mirroring concerns which were raised about the Naval Group Future Submarines contract, which the federal Government threw out last year.

A new report reveals problems with the Future Frigates project.

Mr Hamilton-Smith said if the BAE contract went the way of the Naval Group contract there was a real risk South Australia could lose the decades-long build process to overseas suppliers, with rumours already swirling that an overseas build is an option for the new AUKUS submarine project.

Mr Hamilton-Smith has reiterated that the nation needs a national shipbuilding authority, headed up by a “supremo’’ with deep experience delivering multi-billion dollar projects – such as someone with a history in the mining industry who has form bringing in large projects on time and budget.

“You really need a shipbuilding authority with a supremo, some sort of senior business person, a CEO, a corporate person with a board full of really high-quality people from the business community to grab all of these shipbuilding tasks and start smashing heads together and get things delivered on time and on budget,’’ he said.

“If we keep leaving it to the defence department we’ll keep getting the results we’ve always got which is frankly very troubled and we need a completely new approach.’’

“The way this is shaping up, is we could lose the submarine work if they decided to do it overseas which is highly mooted at the moment … if this frigate project gets into trouble as well and you finish up going down the path the submarine project has gone down, what’s going to be next?

“Are we going to finish up with an overseas-built frigate as a last ditch plan, and we could lose the whole lot.’’

“You’d have to say that both the submarine project and the frigate project are in trouble.

“Look what management by committee has given us – a highly troubled submarine project and now a highly-troubled frigate project.’’

Mr Hamilton-Smith said there was also a risk, with a federal election looming, that a change of government could trigger a change in strategy.

“With a fresh set of eyes you have to assume that everything’s on the table.’’

Mr Hamilton-Smith said the “hearts, minds and bank accounts’’ of the companies tasked with delivering Australia’s shipbuilding program were all offshore, which was the wrong approach.

The report, sighted by News Corp Australia, warns that the inclusion of a US combat system and ­Australian-designed CEAFAR2 radar have pushed the ships’ “space, weight, power and cooling margins” to their limits, posing “significant potential risk”.

Hunter class frigate. Picture: ASC Shipbuilding, BAE Systems Australia.

The proposed ships are now “substantially heavier” than BAE’s original Type-26 frigate ­design, which has also faced ­delays and design headaches, ­requiring a modified hull to ­accommodate the additional weight and design changes.

The report warns that the changes have caused serious ­design issues that have cascaded through the program, driving up electrical power consumption with “a negative impact on speed and range”, and causing problems with the cooling of the vessel’s combat system.

“The overall power demand of the Hunter-class frigate still ­exceeds its ­generating capacity … and is exacerbated in tropical and antarctic environmental conditions,” it says.

“Vessel maximum speed at start of life will be substantially lower than comparable RAN surface combatants.”.

Last July, Defence Minister Peter Dutton approved a delay in commencement of construction on the first boat, from December 2022 to June 2024, but the report says this deadline is now tight.

It warns more schedule delays are expected, and there is a “very high risk” that increasing supply chain costs will “threaten project viability”.

A Defence spokeswoman said the document was an internal management tool that provided a snapshot of program risks at a point in time, and solutions to the problems were “well underway”.

Chief of Navy Mike Noonan said he was “absolutely confident” that the Hunter-class frigates would be “a world-leading warship with state-of-the-art anti-submarine capabilities”.

Under the revised timetable, the first ship will not be completed until 2031 and will enter service in 2033. The final frigate is scheduled to enter service in 2044.

BAE said that it had not seen the report, and that “Identifying risks is part of a normal design risk management process’’.

“All large projects go through an engineering phase to identify and mitigate potential issues and we’re working to deliver the best outcome for our customer.

“The Hunter Class Frigate Program is making strong progress towards the delivery of a superior anti-submarine warfare capability for the Royal Australian Navy.’’