Plight of the hunter: this may be worse than our submarine drama
While the focus has been on problems with our $90bn future subs program, a storm is brewing over five new naval frigates.
While the media focus has been on problems with the $90bn future submarine program, the first of the future frigates has been delayed by up to 18 months while the estimated cost of the whole project has been adjusted up from $35bn to $45bn.
“The submarines have had all the attention but a lot of signs are indicating that the future frigate program may be facing significant problems, if not worse,” says Marcus Hellyer, a senior defence analyst with the Australian Strategic Policy Institute. “We’ve seen some pretty clear signs from Defence, out of the Senate estimates for example, that the schedule is under a lot of pressure.”
So what is going wrong with the project to build the new frigates – the core of the navy’s future fleet – and why do these sorts of problems continue to plague Australia’s naval shipbuilding industry at enormous cost to the taxpayer?
The first problem, according to many defence experts, is that the Turnbull government chose the highest risk option in June 2018 when it selected as Australia’s future frigate the British Type 26 Global Combat Ship with significant Australian modifications.
Unlike the two other competitors in the tender – an Italian Fincantieri FREMM and a Spanish Navantia F-5000 – the British option was the only one that was not already based on an existing ship currently in service.
“The main issue is that despite the government wanting to select a mature design that was in service and in the water, on Defence’s recommendation it selected a design that wasn’t mature,” Hellyer says.
“They picked the UK’s Type 26 design even though it had barely started construction, it was years away being in the water and being in service. Then on top of that the government agreed to five very substantial modifications including the radar, the combat system and all the weapons.
“So you are starting with what was already an immature and incomplete design and then on top of that we were doing a number of very, very substantial modifications to that design.”
Independent senator Rex Patrick, a former submariner, says: “The tender for the future frigate explicitly required the ship design to be based on a military off-the-shelf design with minimal changes and that has not happened.”
The Turnbull government argued the Type 26, which will replace the current Anzac-class frigates from the early 2030s, would give the best anti-submarine warfare capability, which is a critical mission for the new frigates as China expands its submarine fleet. It denied that the decision to go British also was linked to geo-strategic alliance issues including fostering closer strategic and trade links with a Brexit-era Britain.
Either way, the downside of choosing an unproven design has come back to bite the government even before the first steel is cut.
The development in Britain of the Type 26 frigate for its own Royal Navy has been delayed by design and weight issues, the consequences of which have flowed to the Australian program where the new frigates will be called the Hunter-class. The Covid crisis in Britain also has not helped.
Department of Defence secretary Greg Moriarty told Senate estimates in March that the level of risk in the project was high and that the Type 26 program in Britain was facing technical challenges that had contributed to British program being “delayed and running behind schedule”.
Peter Dutton, who inherited this problematic project when he was appointed Defence Minister in March, has confirmed for the first time publicly that the first Australian frigate will be delayed by up to 18 months.
Dutton says the delay is “directly related to the UK’s Type 26 frigates design maturity which flows through to our program”.
“It is frustrating to see an up to 18-month delay to the start of construction of ship one but, importantly, this delay will be recovered over the term of the project,” he has told Inquirer.
Dutton says he has delivered a blunt message to all of the prime contractors on the frigate project that the overall project must be delivered on time and on budget.
“I am working my way through each of these major procurement projects to tidy things up and make sure they are on track,” he says. “Our strategic circumstances with regards to the CCP (China) in our region mean I don’t intend to just sit back and let these projects drift.”
One of the key issues is that the plan to modify the British frigates – by adding a heavy Australian radar and an American Aegis combat system among other things to the British Type 26 design – is causing the Australianised version of the ship to be heavier than expected, posing a potential risk to the life and effectiveness of the warship.
The evolving design work on the Hunter-class has seen the ship’s weight jump from a full displacement weight of 8800 tonnes to more than 10,000 tonnes. The vessel’s weight margin – in other words, the margin of growth to place future systems on the warship in years to come – is only 270 tonnes, or 3.3 per cent. By contrast the Anzac-class frigates had an initial weight margin of growth of 10 per cent, although Defence says this was larger than normal because the Anzacs initially were built without several key systems, unlike the Hunter-class boats.
Even so, many defence experts worry that this 3.3 per cent margin is too small to allow the frigates to be fitted with new systems in the decades ahead as technology evolves.
“The risk is that you won’t be able to evolve the vessel over its career because essentially you have used up the weight margin to add future systems to it as the threat evolves,” says Hellyer.
Patrick says: “As things stand we have significant weight issues for the vessel and we haven’t even completed the design. This is hugely problematic because we will have little scope of upgrades to the capability of the vessel through its life with rapidly changing technology.”
BAE Systems Maritime Australia managing director Craig Lockhart denies that the ship is too heavy and says its weight will not detract from its performance.
“The Hunter ship is not overweight and is within the design criteria to meet key whole-ship performance characteristics,” he says.
“The Global Combat Ship is a highly capable and versatile multi-mission warship designed to support anti-submarine warfare, air defence and general purpose operations anywhere on the world’s oceans.”
The system definition review for the Hunter-class boats already has been delayed from May to November and the new 18-month delay means construction of the first ship will begin in 2024 instead of late next year, as was initially planned.
This would mean the first frigate would not be completed until 2031 and would not be in service until 2033, at a time of growing strategic uncertainty in the region and a rapidly expanding Chinese navy. The federal government says the delay of the first ship will not delay the entire project and that the project will be back to its original schedule by the time the fourth frigate is built, and that all nine boats still will be delivered as planned by 2044.
A contentious aspect of the future frigate project is that despite growing concern about China, the construction schedule of the nine frigates has been deliberately slowed down to ensure the creation of a continuous naval shipbuilding industry.
The construction of the Hunter-class frigates at the Osborne Naval Shipyard in South Australia will form the centrepiece of the government’s plans for a continuous naval shipbuilding industry to remove the so-called Valley of Death job and skill losses associated with the previous stop-start naval shipbuilding industry.
The Turnbull government’s 2017 naval shipbuilding plan sought to reduce what the Rand Corporation said was the estimated 30 per cent to 40 per cent extra cost of building navy ships in Australia compared with the US by improving efficiency through a continuous build.
But to ensure that, the government has slowed the construction cycle to one ship every 2½ years rather than the one ship a year speed the shipyard would otherwise be capable of. This, in turn has added to cost and is the major factor in the official price of the project jumping to $45bn.
As senior fellow David Feeney wrote in a recent study of the frigate program for the Australian National University’s Strategic and Defence Studies Centre, the taxpayer is paying a significant cost for the slower build program.
“Government is constructing the nine Hunter-class frigates at a tempo that is tailored to sustain a continuous build between 2022 (and) 2044,” Feeney writes.
“This extended schedule means the shipyard will not be working at a tempo that enables the most efficient and productive utilisation of the infrastructure and workforce. The Departmentof Defence admits that extending the shipbuilding schedule out to 2044 was a $9.3bn decision.”
Feeney argues the raison d’etre of a continuous shipbuilding program is to achieve higher productivity that realises better outcomes in terms of price, quality and schedule.
“It seems that Defence has surrendered much of these productivity benefits so as to establish a slow rate of shipbuilding. The government’s approach to continuous shipbuilding would appear to undermine the economic case for its very existence,” Feeney writes.
ASPI’s Hellyer also is concerned that the future frigate project is adopting a “robbing Peter to pay Paul” approach by accepting a higher cost of the program to pursue a continuous build.
“We’ve spread out the delivery of these vessels so we are not producing them in the most efficient manner possible, which drives up the cost,” he says.
But Hellyer is concerned about what it means for the defence of Australia to have its new frigates arriving later than they need to be at a time of a rising China.
“Building these frigates slowly might keep South Australian shipbuilders in work but you are also not getting the capability when you need it. We have put the industry cart in front of the capability horse,” he says.
Hellyer also is concerned that by the time the frigates are in the water they potentially will be outgunned by their rivals because they carry relatively fewer missiles than comparable ships.
“The future frigate we selected is a very expensive vessel and yet it has only 32 missile launch cells,” he says. “Naval warfare is now all about missiles. The ship exists to carry a number of missiles and yet we are spending nearly $3bn a vessel for only 32 launch cells. The American (comparison) vessel is their Arleigh Burke (warship). It weighs slightly less than the Hunter-class but it has 96 missile launch cells, so three times the number of missiles. And if you look at the most contemporary Chinese designs they also are carrying substantially more missiles than the Hunter-class.
“So one concern I have is that even though it’s not going to arrive for another decade, by the time it does arrive it may be outgunned by the kinds of ships that will be in our region.”
BAE’s Lockhart says the missile-carrying capability of the Hunter frigates “could potentially” be increased if the navy wants more firepower.
Australian naval shipbuilding has a troubled tradition – think the Collins-class submarines and the recent air warfare destroyers – of bungling projects early on, yet ultimately delivering a capable platform even if it is late and over budget.
It is too early to tell whether the future frigates will follow a similar pattern, but the warning signs are clear that the project is already in trouble at a very early stage.
Dutton says he is working overtime to manage the problems, which so far have been out of his control. But the frigate program will need the highest level of scrutiny to ensure it does not deliver a bad outcome for Australian taxpayers or undermine Australia’s defence at a time of growing strategic uncertainty.
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