Christopher Pyne: Only risk to future submarines project is Naval Group not holding up their end of the deal

The man who helped seal the $50bn future submarines deal says there is only one main risk to the project – Naval Group not holding up their end of the bargain.

There is a certain weirdness about how the Attack Class submarine project being conducted by the Australian Government is debated in Australia.

It is mystifying to most people in the know around the world.

Perhaps the project is too big and too complicated for our polity to digest?

It is easy to pick at a program of such magnitude but is it wise or intelligent? To me, it smacks of a lack of maturity among those in Australia who profess an expertise or interest in defence.

In the last fortnight there has been a pile on to suggest that the Australian Government was about to abandon the ongoing contract with Naval Group and either walk away from submarines altogether or award the contract for twelve submarines to another company to deliver.

It has been suggested variously over the years that the project is suffering cost blow outs and delays.

The silliest commentary has been that submarines are obsolete and the Australian Defence Force is investing in old kit not fit for purpose for warfare in the future.

Then there is the nonsensical argument that the Attack Class submarines are no good because they aren’t nuclear.

An artist’s impression of the of the Attack Class submarine, 12 of which will be built by Naval Group in Adelaide over the next 30 years.

Almost all of these arguments are driven by people who either know nothing at all about submarines and defence or have outdated information that is no longer relevant.

The Attack Class submarines will be the best long-range, Australianised, lethal weapon that a country without a nuclear industry can create.

They will carry a Mark 48 torpedo that will destroy any other vessel in the sea and will operate a Lockheed Martin weapon system which is unparalleled anywhere in the world outside the Five Eyes countries that have submarines in their arsenal.

Australia does not have a nuclear industry. One cannot be created overnight. Even if there was the political will to create one, which there isn’t, what political party is going to waste its political capital on creating a legislative framework for a nuclear industry that can sustain nuclear submarines, that has zero chance of passing any Upper House in any jurisdiction in Australia.

Think about it. There’s more chance of me winning the 100 metres sprint at the Tokyo Olympics.

There is no cost blow out in the program. In current dollars the price tag for the program is $50bn.

That’s the cost when it was announced. That is still the cost.

In Senate Estimates a year or so ago, the government indicated that the cost in “out turned dollars”, in other words, the cost in future dollars that takes into account inflation and currency movements is potentially $89bn. That’s cast forward to 2050. Who knows what the real figure will be over the next thirty years?

But that figure has been leapt upon by opponents of the program to pretend there has been a cost blow out when that is an utter falsehood.

Another canard is that the program is behind schedule. It is not.

The component parts of the schedule move around. You would expect them to in the biggest submarine acquisition project in the world right now.

Naval Group are building an Australian submarine that needs to be designed, a workforce needs to be trained, a new submarine yard at Osborne needs to be built, the submarines need to be built and constantly updated and changed over the next thirty years as technology and capability changes.

Designing, building and testing a submarine, that has over one million parts, is not like creating a suburban home watering system.

Of course its going to keep changing and the schedule will move around.

But the fundamentals are on track. The submarine yard at Osborne is well underway, next to the Hunter Class frigate shipyard which has also been built to deliver the nine anti-submarine warfare frigates for the navy.

The design contract has not reached every milestone but the 2023 date for the cutting of steel on the first submarine remains the same.

There are those who wrongly say that submarines are yesterday’s technology and investing in them as a military capability is a waste of money.

What planet are they living on? Because our planet is seeing an explosion of new submarine capability across the developed world.

Almost every major nation with an interest in defence is building submarines.

By 2030, half of the world’s submarine fleet will be operating in our Indo Pacific region.

If we are making a mistake investing in submarines so are all our allies and rivals.

There is one area where the jury is still out on the success of the program and that is the level of Australian industry content and the transfer of intellectual property and technology.

Naval Group promised to deliver at least 60 per cent Australian industry content.

It is too early to say that they have failed to do so, but they will need to be kept to that promise.

In doing so, the technology and intellectual property transfer to the Australian subsidiary must also be achieved.

The ambition of the largest infrastructure project in Australian history so far is that as the program ends, Australia will have its own sovereign capability to design, build and operate submarines.

The same is true of the Hunter Class anti-submarine warfare frigate project with respect to surface ships.

Australia already has the sovereign capability to sustain, maintain and upgrade the Collins Class submarines.

We want to move to the next level and Naval Group must help us to achieve that without qualification.