Taxpayers sunk by $3.5bn Collins-class submarine refit

Australia’s Collins-class sub­marines will need a multibillion-­dollar refit to keep them active for another decade due to the delayed rollout of French submarines.

Australia’s rapidly ageing Collins-class submarines will be given a refit that will cost taxpayers at least $3.5bn.

Australia’s Collins-class sub­marines will need a multibillion-­dollar refit to keep them active for another decade due to the delayed rollout of the next-generation French submarines, which won’t be ready for operational service until the mid-2030s.

The refits, worth “greater than $3.5bn” — at least $583m per ­submarine — will replace the boats’ motors and diesel generators, and upgrade key systems.

The works will keep the six Collins-class submarines in the water for an additional 10 years beyond their scheduled retirement, guarding against a capability gap as French company Naval Group builds a $90bn fleet of new Attack-class submarines.

The life of the first of the 1980s-designed Collins subs will be extended until 2038, while the last of the refurbished boats will now ­retire as late as 2048.

The first of the nation’s 12 next-generation submarines — acquired under the deal with the French company — won’t be ready for operational service until at least 2034.

Defence revealed to a parliamentary committee that the minimum cost of the Collins-class “life-of-type extension” program was $3.5bn, but wouldn’t provide the exact budget for the program.

Collins-class submarines HMAS Collins, HMAS Farncomb, HMAS Dechaineux and HMAS Sheean in Cockburn Sound, Western Australia. Picture: Royal Australian Navy

The figure does not include the additional sustainment costs required to keep the boats operating for another decade.

Defence officials have previously speculated that the works could cost up to $6bn, given the scale of upgrades, with one estimate putting the cost at $15bn.

A Defence spokeswoman told The Australian: “The actual provision remains commercially sensitive, as contracts and supporting subcontracts that will be let to support the delivery of Collins LOTE are yet to be finalised.”

She said under current plans, the life of all six Collins-class submarines would be extended.

The final decision on the ­number of Collins-class boats to undergo the refits would be determined by the government in 2020-21, the spokeswoman said.

The government is also yet to reveal whether a proposed re­location of submarine maintenance from Adelaide to Perth will go ahead.

When former defence minister Kevin Andrews announced a competitive process in 2015 to choose a replacement for the ­Collins-class boats, he said the first of the new submarines would be built by the mid-2020s. Twelve months later, a Defence white paper said the first of the submarines was likely to “begin entering service in the early 2030s”.

Former prime minister Tony Abbott said at the time he was “flabbergasted” at the new timetable, agreed by his successor, Malcolm Turnbull.

In January, the Auditor-General revealed Naval Group was running nine months behind schedule in the subs’ design phase, but Defence said the time would be made up later.

Labor’s assistant defence spokesman, Pat Conroy, said taxpayers were paying a massive price for the “mismanagement” of the submarine program, which would keep the Collins-class boats in the water nearly 60 years after they were first designed.

“The government must come clean with the Australian people on what is happening with this very troubled and challenging project,” Mr Conroy said.

“For the first three years of the Coalition government, the plan was that the first Future Submarine would be delivered by 2025.

“Defence has admitted that due to delays … and the desire to get an even more advanced submarine, the first submarine will now not be delivered until the mid-2030s. This is clearly a 10-year delay … leading to the massive capability gap they now admit we face.”

Australian Strategic Policy ­Institute defence budget analyst Marcus Hellyer said $3.5bn would be “the absolute minimum” cost of the life-extending works.

“There are thousands of components in them and a lot of the companies that made them just don’t exist any more,” he said.

“So they will have to find new suppliers just for basic stuff, before they even get to the high-end equipment.”

Despite early problems, when they were said to be “louder than a rock band”, the Collins-class subs are now reputed to be the best conventional subs in the world. But Dr Hellyer said maintaining their regionally superior performance would become “pretty challenging” as time went on.

That would matter less if the intention was to keep the boats operating to train new sub­mariners, he said. But if the ­priority was maintaining a regionally superior capability, the refits would have to be more extensive, Dr Hellyer said.

The Australian revealed last month that the estimated cost of the nation’s Future Submarines had hit nearly $90bn.