Which state should repair the Collins Class subs?
Twelve new submarines, six old. Nine futuristic frigates. Twelve patrol vessels. $90 billion over four decades. But for now, the headlines are all about 700 jobs, as Tory Shepherd reports.
- WA doesn’t have the skills to take sub maintenance work – Marshall
- Submarine supply chain businesses in the firing line
For years defence insiders have seen it as “inevitable” that a stack of submarine work would move from South Australia to Western Australia.
Major reviews have suggested the move is bound to happen, senior Defence bureaucrats have said there won’t be enough room at the Adelaide ASC shipyards, and there is a review underway to look at options for going west.
ASC has previously said that the possible move has been an “open conversation” with staff.
But Premier Steven Marshall says the State Government will make sure there is room, and that the workforce is there, and says SA can do it better anyway.
Former (homegrown) defence minister Christopher Pyne consistently said there were “no plans” to move the Collins Class sustainment to WA, and current (WA-based) Defence Minister Linda Reynolds uses the same words.
Everyone is waiting for the outcome of a review due later this year.
But in the meantime, the WA State Government is fighting for the work to go west, and the defence portfolios already have.
WA (through ASC West) already does serious maintenance on the ageing but competent Collins Class submarines.
Those six boats, or most of them anyway, are going to have to keep chugging along until the 12 swanky new Barracuda Class submarines are ready.
That means they need some extra TLC. For now, they get that at Osborne. ASC does the major services, known as full-cycle dockings or FCDs.
An FCD takes two full years every decade, and hundreds of workers. ASC workers cut through the hull of the submarine, take out the main motor and engines. It’s a decent overhaul.
It’s a big job, and about to get bigger, because the Collins Class will have to keep on keeping on until the Barracuda Class submarines are ready. So they will start getting what is known as a Life Of Type Extension (a LOTE), which is a supercharged FCD. Think of it as a major overhaul, with all the bells and whistles thrown in. That could mean new sonars, weapons technology, and so on.
This work sustains about 700 jobs in Adelaide, jobs that WA is eyeing off jealously. But old green eyes out west didn’t just pop out of the clear Nullarbor air. There are arguments for and against moving those jobs. And then there’s politics.
Is West best?
Naval Group is building the 12 new submarines at ASC, and many think that won’t leave enough room to keep doing FCDs, which means that work - along with the 700 jobs – will be squeezed out and snatched up by WA.
The WA State Government was slow off the mark on defence jobs.
While the Federal Government was preparing to announce billions of dollars of investment in submarines and frigates, SA was already showing its wares.
Now WA is on the case. On Monday it dramatically escalated its arguments to do the FCDs and LOTEs, releasing two studies that thundered that leaving the work in SA would threaten the national interest.
A PricewaterhouseCoopers paper the State Government commissioned argues that it is less risky to do the work in WA because the State Government is committed to investing in it, because WA will do a better job of pulling together a skilled workforce, because they are worried SA will not have enough skilled workers, and because WA is on the Indian Ocean and that’s where future threats are likely to come from.
The paper argues that there are “significant land constraints” in SA, while WA will have the infrastructure and space.
A separate report from ACIL Allen argues that the work is worth almost $8 billion, and more than 3000 jobs. WA Premier Mark McGowan said yesterday that WA had world-class facilities. “Moving FCDs to WA will grow the defence industry’s capabilities and it is considered best practice to conduct sustainment activities alongside where the submarines are based,” he said.
Is SA greater?
SA is already doing the work. ASC has pulled the Collins, which were known as the “dud subs”, off the list of troubled projects.
Premier Steven Marshall on Monday admitted that there would be skills shortages in SA.
“There are going to be more jobs than there are people at the moment,” he said, before swiftly going on to say that his Government would work to make sure those gaps were filled.
He argues that all the risk lies in moving the work to WA.
“We have the expertise here in SA, they don’t have it in WA,” he said.
“Yes, they’re after our work but I’m absolutely convinced that this is the best place for the nation to base its full-cycle docking and that’s precisely what we’ll be promoting in Canberra.”
Mr Marshall also suggested that WA was just trying to find work for miners in the wake of the mining boom – and that as soon as another boom kicked in those people would go back to mining and abandon the submarine work.
Meanwhile, he says, in the “unlikely” event that space gets tight, SA would make expansion possible.
Straight down the middle?
Marcus Hellyer, a senior defence analyst from the Australian Strategic Policy Institute, says there are risks involved in staying. But, he says, there are also risks involved in moving.
Meanwhile, he says if the move is on, it should happen “sooner rather than later”.
It will take years to get the infrastructure and the workforce in WA up to scratch and Australia can’t risk going straight to the hardcore LOTE in WA without them doing at least a FCD first.
A speedy decision is also needed, Dr Hellyer says, because the shipyard for the Barracuda Class submarines is being designed, and a designer would want to know whether they have to cater for enormous old submarines up on blocks cluttering up the space.
So what happens now? The review might come back and say there’s no way SA can do FCDs along with everything else.
That will make WA happy, but not the SA Government, nor SA Senators that the Federal Government would like to keep onside. It might recommend that the work go to WA and give options for how and when that should happen – possibly as early as 2022. The question then will be whether governments of either persuasion or level accept the recommendations of that review.