Australian industry input to future submarines project must be at least 60 per cent, Christopher Pyne writes
Exactly how much local input will go into the $50 billion future submarines project at Osborne has become a hot topic. Find out what we can expect to see, from the man who inked the deal with Naval Group.
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As the old adage goes, “never let the facts get in the way of a good story”.
So it was last Thursday, after an interview with the chief executive officer of Naval Group hit the newsstands. The media reporting of the progress of the Attack Class submarines project went into overdrive.
Many news outlets across Australia claimed that the Australian Government had promised there would be 90 per cent local content in the project. Anything less would be a catastrophe of armageddon-like proportions.
Here are some facts from the person who would know – the minister who awarded the contract and negotiated the deal with the French Government – yours truly.
The Australian Government never promised 90 per cent local content in the build of the Attack Class submarines.
One of the then senior executives of Naval Group did a radio interview way back in 2016 in which he stated that Naval Group hoped that 90 per cent of the work would be sourced in Australia.
The Australian Government promised that the submarines would be built locally, at the shipyards at Osborne in Adelaide, South Australia.
They will, every single one of them, from the first to the twelfth.
A local build is defined as 60 per cent. That is what the Australian Government promised. That is what Naval Group is obliged to deliver.
That is at least 60 per cent of a $50 billion project. The biggest construction project in Australia’s history. I am absolutely confident that will be delivered.
Other projects of great scale, like this one, have achieved at least 60 per cent Australian industry content.
The Collins Class submarines, built at Osborne and maintained at both Osborne and Henderson in Western Australia, are now at around 80 per cent.
The Air Warfare Destroyers, all three of them, were built at Osborne and have achieved over 60 per cent Australian industry content already.
That will continue to increase as the AWD’s are maintained and enhanced in Australia.
Achieving such levels of Australian industry content doesn’t just happen overnight.
Building a ship or submarine isn’t like going to Bunnings and buying a watering system.
The Arafura Class Offshore Patrol Vessels are being built at Osborne and Henderson. They began, on time, in 2018 and are going apace.
Preparation for the building of the Hunter Class Anti Submarine Warfare frigates began in 2018 and that project is slated to “cut steel”, which is the beginning of the build process, in 2020, on time.
Preparation for the building of the Attack Class submarines is going on right now. There is a team of Australians at Cherbourg in France learning how to build and design submarines.
That is scheduled to cut steel in 2022. There has been no alteration to that date, nor the date for the delivery of the first submarine in the early 2030s.
If you drive to the Osborne shipyards you will find a hive of activity. It is a mini city within a city.
The sheds in which the Offshore Patrol Vessels, Air Warfare Destroyers and Collins Class submarines were built have been dwarfed by three huge new sheds to accommodate the Hunter Class frigates.
The first sod has been turned and planning is well under way for the creation of a new shed for the Attack Class submarine build that is bigger than the Adelaide Oval stadium.
Imagine the steel, concrete, cabling, glass and fit out that goes into such an enormous construction.
All of that is growing our economy and creating much needed jobs for Australia.
Naval Group and the Department of Defence issued a media statement last Thursday pointing out that 137 Australian companies have already won subcontracts on the Attack Class submarine project.
All of these companies will employ new staff, invest in training, equipment, buildings, research and development of their products and services to improve their capability and achieve the world standard that the Australian Government expects in a project of this importance.
None of this happens overnight. Australian industry needs to step up. No one in business can expect to win contracts just because they are domiciled in Australia.
They must win because they have the capability to deliver.
When it comes to defence, we expect the best.
Travelling in those submarines, frigates, destroyers and patrol vessels will be the men and women of the Australian Navy.
The National Security Committee of the federal Cabinet will not put those brave souls into a substandard product.
Our national Naval Shipbuilding Enterprise is, first and foremost, a project for our national defence.
Its secondary impact is as an industry project to grow our infrastructure, science, technology, engineering and mathematics capability.
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That’s why we did not require a mandatory minimum percentage of Australian industry content in the Strategic Partnering Agreement that I signed with the French Government and the contract the Department of Defence signed with Naval Group.
Neither Liberal nor Labor governments over the past several decades required a minimum percentage of Australian industry content in critical platform contracts of this size. Nor should they.
Competition ensures that everyone must perform at their best and provide the very best content in these projects – from the missiles and torpedos to the hull and engines. Anything less would be a dereliction of duty.
It’s easy for populist politicians and media commentators to make an easy hit on their political opponents or grab a cheap headline by criticising decisions for which they will never have to take responsibility.
Good governments make the right decisions weighing up all the factors that will protect the nation and its people for both national security and economic reasons.
They don’t just make short term decisions that give them a positive headline today, but might be catastrophic for the many decades that these ships and submarines will be in service for Australia’s defence.