Industry bewildered at proposal to scrap $50 billion Future Submarines program
DEFENCE industry insiders are bewildered by a sudden push from South Australian senators to scrap the Future Submarines program.
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DEFENCE industry insiders are bewildered by a sudden push from South Australian senators to scrap the Future Submarines program.
Most believe that the crossbenchers’ idea is misguided and would require a complete overhaul of Defence’s strategic requirements, and that the very thought of it is a confusing distraction.
Centre Alliance’s Rex Patrick and Stirling Griff, joined by Australian Conservatives Senator Cory Bernardi and independent Tim Storer say the program’s cost has blown out.
Senator Patrick says the $50 billion program for 12 submarines, to be designed and built by France’s Naval Group, should be put aside for 20 “near off-the-shelf submarines” that he says would cost less than $20 billion.
The deal with Naval Group was made two years ago after years of dithering over how to replace Australia’s ageing Collins class submarines.
Former Prime Minister Tony Abbott was in favour of buying off-the-shelf submarines from Japan.
However, extensive investigations and multiple defence experts said there was no off-the-shelf option that would meet Australia’s needs, and the modifications needed to get them up to scratch would be so extensive it would be better to get a new submarine.
That led to the competitive evaluation process that saw Naval Group (then DCNS) brought in.
When The Advertiser asked various industry people what they thought of the idea to start again, the most common response was “WTF”, which is thought to be shorthand for “what terrible form”.
One of Senator Patrick’s concerns is that progress on the critical Strategic Partnering Agreement between Defence and Naval Group has “stalled”, delaying the project.
The negotiations, which will cover decades of work, are in uncharted waters and have hit several stumbling blocks. The two governments are determined to resolve the issues one way or another.
Another concern is a potential cost blowout, mostly relating to confusion over different amounts to build the submarines and to keep them going, and over whether the $50 billion price tag is in 2016 dollars or adjusted for inflation over the decades the submarines will be built.
Defence Minister Christopher Pyne says the project is on budget and on track for construction to start in 2022.
Even more concern has been sparked this week by reports that the Collins class was going to have to keep going until 2050 — which is actually the year that they have always had to go to.
The question is how many of the six-strong fleet will have to keep getting serious, deep maintenance and for how long and whether there is scope for that work to keep being done in Adelaide or whether it needs to shift to Western Australia as Osborne fills up with all the other projects.
Among all of those concerns are issues being considered at the highest levels of the workforces for the various projects — the Collins class sustainment, the Future Submarines, and the Future Frigates.
But rather than worries about jobs being lost, the bigger worries are about there being enough people in the right place and with the right skills to do them.
The industry in South Australia is aware of all these issues and working through them.
The Defence Teaming Centre said the suggestion that the biggest project, the Future Submarines, should be radically overhauled, was not helpful.
“Anything that delays the awarding of contracts and the beginning of the flow of work and jobs and cash is going to be a bad thing,” chief executive officer Margot Forster said.
“At the moment industry is working to a timeline that’s been advised by the government to build up their capability to deliver. If that is then delayed it throws all of those plans into chaos and could drive businesses out of business.”