New offshore patrol vessels should not be built in SA, says ex defence procurement chief Warren King

FORMER defence procurement chief Warren King says Australia’s new offshore patrol vessels should not be built in South Australia — which industry figures say would put the state’s entire shipbuilding industry at risk.

Spanish Navy F100 frigate ship. military /Ships

FORMER defence procurement chief Warren King says Australia’s new offshore patrol vessels should not be built in South Australia — which industry figures say would put the state’s entire shipbuilding industry at risk.

It comes as the Federal Government appears to be backing away from a strong indication by former Prime Minister Tony Abbott in August last year that the OPV build would start in Adelaide and lead into the Future Frigate program by 2020.

Yesterday, Mr King (who left the Defence Materiel Organisation last year) told a Senate inquiry into shipbuilding that he would prefer to see the OPVs built elsewhere and the Future Frigates program brought forward because there could be a “conflict” in Adelaide doing both.

But Defence SA, industry insiders, and international experts warn the OPV build is a crucial precursor to building the $39 billion Future Frigates in Adelaide, and that the frigates in turn are a crucial step to being able to build the $50 billion Future Submarines.

That continuity is the only way to maintain the workforce and expertise, they say.

Former Prime Minister Tony Abbott announced in Adelaide in August last year that $89 billion would be spent building ships for the Australian navy in coming years, promising it would save SA jobs.

At the time, he said: “The Corvette (OPV) build is likely to start in Adelaide. It will stay in Adelaide until the frigate build starts in 2020.”

What they’ve said

The cost of the OPVs is rolled into the $39 billion cost of the Future Frigates program.

But the Government has now backed away from its position that the fleet of OPV would likely be built in Adelaide.

WA is actively campaigning to build the OPVs. Defence has now said that no decision has been made on where they will be built, and yesterday Mr King shocked local observers by saying they should not bebuilt in Adelaide.

Defence SA chief Andy Keough warned that if the OPVs are built in WA, the frigates will have a “cold start” because the ASC workforce will have dwindled to almost nothing by then.

He said the Government-commissioned RAND report into the future of Australian shipbuilding showed the need to build both fleets in the same place.

“Ultimately the issues were considered by the RAND report and in their deliberations and extensive study they looked at a number of these factors including where the OPVs should be constructed,” he said.

“In their opinion one of the best options to mitigate the risk to Future Frigates was to construct the OPVs in the same location, reducing the risk of significant blowouts.”

Defence Teaming Centre chief Chris Burns pointed out that the RAND report (which the Government has said it will follow closely) also showed you could effectively get the first four OPVs “free” because of the savings from ending the “stop-start” nature of shipbuilding.

“Building the OPVs where we built the Air Warfare Destroyers we’ll bridge the Valley of Death because we’ll pick up the workforce from the AWDs and maintain those skill sets to transition across into building the frigates,” he said.

WA should focus on sustaining the ships once they were built, state Defence Industries Minister Martin Hamilton-Smith said. “Adelaide is where they should be built. Perth and Sydney is where they should be sustained.”

A Defence Department response to a request from Labor Senator Stephen Conroy to confirm where the build would be only said “Australia”.

“Defence is unable to provide any further details,” the written response said.

As the mining boom wanes, though, WA is agitating for the work — WA shipbuilders Austal have built the Navy’s patrol boats in the past and the WA industry and Government have reportedly formed a “war council” to fight for the contract.

Mr King said yesterday there could be a “conflict with resources” if SA built both the OPVs and the Future Frigates.

“I think there is a risk at least that we want to be aware of that the OPV could be a negative on the Future Frigates rather than a positive.”

Defence Minister Marise Payne’s spokesman yesterday pointed to the August announcement that the Future Frigates would be brought forward by three years to save more than 500 jobs, and that they would be built in SA, and that the OPVs would be brought forward by two years to save 400 jobs. He did not detail where those jobs or that build would be.

Billion-dollar deals in turmoil

Analysis — Tory Shepherd

THERE’S going to be lots of work created and lots of money spent building warships and submarines for the next few decades.

You’d think everyone would be happy.

But the process so far — bearing in mind we haven’t even cut steel yet — has been chaotic, fraught with political tensions, blame shifting, and interstate rivalry.

That tends to happen when there are billions of dollars theoretically there for the taking.

Add to that the shifty figures that get bandied about, the shifting language, the shafting of former prime minister Tony Abbott, and you have a mass of confusion.

Most of the angst has been centred on the Future Submarines. But to get to them, first we have to get through the Offshore Patrol Vessels and the Future Frigates.

The $50 billion Future Submarines project is Australia’s biggest ever Defence acquisition, and will play a critical role in the state’s future.

The other projects sometimes get a little lost.

But, according to all the people who should know — not least the prestigious RAND Corporation tasked by our Government to lay out our best options — all the projects are needed to link together to form a continuous building program. That’s the only way to have a viable industry in Australia.

WA wants a slice of the pie that we think is rightfully ours. Politically, it would be palatable to share the building work around. But (almost) everyone thinks that would mess with efficiency, productivity, and workforce levels.

It will be a long time before we know what jobs, and what money, will flow in SA. The fun is only just beginning.

What lies ahead?

OFFSHORE PATROL VESSELS

The OPVs will replace the existing Armidale Class Patrol Boat fleet. Up to 20 of these smaller boats are used to patrol the waters around Australia and intercept other vessels — such as asylum seeker boats — at sea. Work is set to start in 2018. The cost is unclear as it is included in the $39 billion estimate for the Future Frigates.

FUTURE FRIGATES

The Future Frigates will replace the Anzac Class fleet. They will be larger warships with anti-submarine capability. They will go to war, protect Australia’s borders, and be involved in fighting terror and pirates. Work is set to start in 2020. The Government has said they will cost $39 billion, including the OPVs.

FUTURE SUBMARINES

The Future Submarines will replace the Collins Class fleet. These submarines will have hi-tech stealth capabilities, which will be used to gather information. They will play an important role protecting our trade routes particularly as tensions rise in the South China Sea. The Government has said they will cost $50 billion.