The bill for the Future Submarines hits $100 billion as Defence reveals why it doesn’t want Adelaide’s ASC to help with construction

THE estimated bill for the navy’s new submarine fleet has hit $100 billion and more accurate costings won’t be known until design work is completed in 2022.

THE estimated bill for the navy’s new submarine fleet has hit $100 billion and more accurate costings won’t be known until design work is completed in 2022.

Senior Defence officials have told a Senate Estimates hearing they don’t believe Adelaide-based shipbuilder ASC has the skills needed to help France’s Naval Group build the 12 Future Submarines.

Defence submarines chief Rear Admiral Greg Sammut revealed that the cost of sustaining the new submarines until 2080 was estimated to be about $50 billion.

This was on top of the $50 billion estimated acquisition cost.

Rear Admiral Sammut said more detailed costings would depend on decisions to be finalised when a critical design review was conducted in 2022. Before winning the submarine tender in 2016, Naval Group proposed using 1700 ASC shipbuilders on the project.

Illustration of the Shortfin Barracuda submarine the French company Naval Group will build in Australia. The estimated bill for building and maintaining the 12 new submarines has hit $100 billion.

But Rear Admiral Sammut said it was preferable for the same company to design and build the submarines.

He said ASC had lost the capability to build submarines since the last of the Collins Class boats was completed in the early 2000s and the local industry’s skills had “atrophied”.

“It is a submarine sustainment company without all of the skill sets required to build a submarine which is designed in this century and to do so in a way which we also hold Naval Group properly accountable for the capability that we’re seeking to deliver,’’ Rear Admiral Sammut said.

Rear Admiral Greg Sammut.

Outside the hearing, Centre Alliance Senator Rex Patrick said ASC staff were entitled to feel insulted by Defence's assessment of the Federal Government-owned company.

He compared it to former Defence Minister David Johnston’s 2014 comment that the ASC couldn’t be trusted to build a canoe. “It is clear that ASC was to be excluded from the start,’’ Senator Patrick said.

“Defence’s claim that ASC’s risk profile was too high is just official speak for ‘ASC couldn’t build a canoe’.”

Senator Patrick questioned the wisdom of the Government entering binding construction agreements with Naval Group before there was more clarity about the cost of the submarines.

Rear Admiral Sammut said it was still possible that ASC could have a role in the Future Submarine project.

The inquiry also heard that the new naval shipbuilding college was expected to accept its first students in August.

The cost of phase one of the college has risen from $25 million to $62 million. The college will be headquartered in Adelaide but also offer courses in other states.