Secrecy adds to uncertainty about General Purpose Frigate program

The next big thing for naval construction in Australia is the General Purpose Frigate program, but there is uncertainty about when it will happen and who will do it.

Austral chief executive Paddy Gregg and Naval Shipbuilding and Sustainment Group deputy secretary Jim McDowell signed a Heads of Agreement to establish a strategic shipbuilding agreement between Austal and the Commonwealth. Picture: Department of Defence

The next big thing for naval construction in Australia is SEA 3000 – the General Purpose Frigate (GPF) program. Though not well defined, the current intention of the federal government is to acquire up to 11 ships with the first three constructed in an overseas parent shipyard and the balance in Western Australia.

The independent review into the structure of the future surface fleet has nominated designs from four countries: Germany, Japan, South Korea and Spain. However, there is reason to doubt the thoroughness of the process to date – for example, there seems to be three South Korean designs to choose from made by two different companies rather than the single one named in the study. There is also uncertainty about the exact parameters of the German and Spanish ships.

The process has been hampered by an obsessive level of secrecy about the acquisition with the prime contractors banned on penalty of being jailed from speaking with Australian companies, let alone the media. What is known is that in early to mid-June all of them were given the opportunity to separately visit the Henderson shipbuilding site, also known as the Australian Marine Complex, to help them develop their plans for local construction.

The ships under consideration are in the 3500- to 4500-tonne range, and producing eight of them will be a major undertaking lasting several years and needing a highly skilled workforce of many hundreds, possibly thousands, of tradespeople. Without doubt WA has suitable facilities and people, but they are divided among several companies with no particular incentive for them to work together.

Austal is probably WA’s best-known naval shipbuilder with a strong record of success, especially in the US. The federal government seems to have made an “in principle” decision that Austal needs to be central to the plan, but it is unclear how this is expected to work in practise. A strategic agreement is being finalised with the company that will allow the construction of army landing craft to begin under project LAND 8170 Phase 1 and, if successful, will flow on to the GPFs.

There are several complications. Most importantly, all the bidders are banned from speaking with Austal. Second, army landing craft and navy frigates are quite different platforms in size and especially complexity. The army platforms are one tenth the weight and lack complex sensors, weaponry and systems of even modestly armed frigates. Third, the ownership of Austal is in doubt with one of the bidders, Korean company Hanwha Ocean, already making an unsuccessful attempt to buy it and other entities known to be interested.

Regarding facilities, the bidders say – anonymously – that the large assembly hall owned by Civmec is impressive and could be used to build the frigates.

However, Civmec had a bruising experience with naval shipbuilding as a subcontractor to Germany’s Luerssen for four Offshore Patrol Vessels (OPVs) currently under construction. The two companies have had a serious falling out for reasons that are opaque.

Overall, the contract known as SEA 1180 has not gone well, mainly because the RAN has continued to tinker with the OPV design and at last count had made an extraordinary 800 changes after the contract was signed. Rather than take the blame and fix the problem, Defence is doubling down, claiming that everything is the fault of Luerssen for not better understanding the Australian regulatory environment – without themselves having done anything about the issue during the comprehensive ship design process.

The collective result is that the GPF bidders seem confused and uncertain about what the federal government wants as a build strategy. This is not helped by the RAN saying that not only will the first three ships be built in the parent yard offshore to a design for another navy, but that the next three built in Henderson will have exactly the same suppliers.

This is creating the prospect of barges full of hardware from Germany, Japan, South Korea or Spain arriving with all the equipment to be installed in the locally made hulls – including the engines and propellers, with all signs, gauges and dials in a foreign language.

Such a situation looks unsustainable, but the federal government keeps chanting “no design changes”, which is echoed back to them by senior RAN and Defence personnel who, frankly, should know better.

The upshot is uncertainty about what WA will receive, when it will happen, and who will do it. Another complicating factor is that with the Arafura contract reduced from 12 to six ships, once work on those wraps up there will be a gap of several years until frigate construction starts, with a consequent crippling reduction in the skilled workforce.

Luerssen has come up with the perfect solution that also addresses the RAN’s alarming capability shortfall caused by the early retirement of Anzac frigates. This is to morph the OPV project into the construction of six slightly larger, heavily armed corvettes based on the Arafura design. This would use the existing WA workforce and large local supply chain without skipping a beat. The first ship could be in the water in 2027, with subsequent launches every nine months.

The offer has been inexplicably ignored by the federal government.