July 16, 2014

Australia's Future Submarine - a $40 Billion Risk?



[The following is under copyright]


The selection process to build 6 to 12 Australian future submarines involves many hurdles and pitfalls. It would be hugely wasteful for politicians, admirals and officials to again make hasty choices that again steer this country into a Collins disaster. When the 2014-2015 Defence White Paper is published next year it will be too early to “pick winners” because Japanese options are only starting to be looked at. At current estimates the up-front cost for 12 submarines may amount to $40 Billion (funds Australia doesn’t currently have). It is appropriate that Australia not be locked into another ASC build in South Australia madness – whatever Labor promised to the maritime unions in 2009 http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/Submarines#_Toc325531486  .

It is also vital for Australia to avoid the major integration problems caused by the purchase of essential systems (including hull, propulsion and combat systems, others?) from too many equipment companies of too many nations http://en.wikipedia.org/wiki/Collins-class_submarine#McIntosh-Prescott_Report_and_Fast_Track_program. Australia’s business model of locally built submarines and ships may well be over-ambitious and un-affordable. The poor current performance of Australian industry in naval construction should also be seen as a risk and uncertainty. The current Air War Destroyer project is increasingly seen as a project to build three destroyers for the price of four, with the usual suspects featured. “The problems had been compounded by the unwieldy set-up of the AWD Alliance, made up of the government military purchaser the Defence Materiel Organisation, the government-owned shipbuilder ASC and…” http://www.smh.com.au/federal-politics/political-news/navys-air-warfare-destroyer-project-blows-out-by-300m-20140306-34a8n.html With a timeline overlapping the future submarine project Australia also plans to build 8 future frigates http://www.defence.gov.au/dmo/id/dcp/html_dec10/sea/Sea5000.html - each expected to weigh 7,000 tons.

An additional layer of risk and uncertainty has been added over the last two weeks with reports that the Australian Government may see merit in selecting a Japanese submarine propulsion system and perhaps a complete Japanese submarine http://uk.reuters.com/article/2014/05/28/uk-japan-australia-submarine-idUKKBN0E82FG20140528 . It is Japan’s current Soryu class submarine that has caught Australian attention. The Soryu has a propulsion system (including the diesel-electric engine and AIP) that may be suitable for the very large conventional submarine that Australia is seeking. Problems for Australia in utilising a complete Soryu design are that Soryus very likely do not carry all the features that Australia probably wants including: Lithium-ion batteries and a Vertical Multi-Purpose Lock (VMPL) that can carry divers, undersea drones or extra Tomahawk cruise missiles.

The willingness of the Japanese government of Prime Minister Abe to consider exporting submarine technology to Australia has only come about via recent and radical departure in Japan from the traditionally pacifist political and constitutional approach in Japan. These new ideas may not be deeply or broadly held in Japanese politics. Hence there is a risk that a new Japanese government after Abe (perhaps a centrist-pacifist Democratic Party government) might effectively renege on any Japanese understandings, promises and contracts concerning submarines.

The sensibilities of the Japanese public and Chinese government pressures must also be considered in any Australian-Japan submarine deal. Japan has a strong public peace movement which can be highly antagonistic towards Japan’s military alliances (particularly concerning US bases). Significant numbers of the Japanese public might also see a Japanese-Australian submarine export deal as a security relationship that should be opposed. China, fearing a remilitarised Japan, may also exert political and economic pressure on Australia and on Japan (including the Soryu’s principal builders Kawasaki and Mitsubishi) to break up a submarine based security relationship. It must be remembered that the Quadrilateral Security Dialogue (Australia, Japan, the US, India) proposed by Prime Minister Abe in 2007 collapsed in 2008 when Australia pulled out of it due to Chinese pressure http://en.wikipedia.org/wiki/Quadrilateral_Security_Dialogue#Rudd.E2.80.99s_departure .
If the Australian Government insists a future submarine be built locally it is prudent for Australia to move slowly in its decision making. Australia simply doesn’t have the money, won’t have it for years and there are too many uncertainties over the Japan card.

The most likely outcome for Australia’s future submarine may be ASC working with a German, French, Japanese, Spanish or Swedish prime contractor to integrate a hull from that contractor with a Japanese propulsion system and American combat system. The latter two systems might be selected on their merits but with a tacit understanding that Pacific security alliances with Japan and the US are important determinants.

A far cheaper, easier and less problematic approach might be to choose just one foreign company as the prime contractor and provider of the systems. The most experienced companies, with the most reputable sales record, and the most experience building submarines outside their home countries are Germany’s TKMS-HDW and France’s DCNS. Spain’s Navantia falls down on having never designed or exported a submarine without heavy French involvement and there have been major program problems with Navantia’s current go-it-alone project – the S-80. Sweden falls down on having not being associated with a new submarine build since HMAS Rankin (of the Collins Class) was built in Australia in 2003. The association of Sweden with the Collins is not a positive selling point in Australian minds.

Just because submarines are a defence item doesn’t mean Australia’s future submarine project has to be excessively complicated and overly expensive. Australia has choices to make the process more simple, less risky and less expensive. A post Collins submarine selection process of selecting and managing a mixture of competing companies, nations and technologies for a locally built submarine is unnecessary. Australia can choose a major company like TKMS or DCNS to use its corporate experience and connections to identify and manage more efficient choices rather than diverse major suppliers. Australia could also decide to have the submarines built overseas in Germany, France or perhaps Japan. Having submarines built at the shipyards of these foreign submarine companies should free up $Billions that would have been expended in a local build process. Those $Billions saved could be spent on other industrial development purposes in Australia. 

Australia is having its F-35 jet fighters built in the US – therefore why not have Australia’s submarines built overseas? Could it be that aviation industries are mobile while shipbuilding industries must be locked in the shipyard past?

Pete

19 comments:

Anonymous said...

Dear Pete,

I have several remarks I want to add to your conclusions.

The first one is ASC should never build or touch any future Australian submarine. That has to be said about ASC’S management but not about workers and engineers.

Like you I can see only one successful option to build a new Australian submarine in an affordable way: the use of a foreign prime contractor. Only a foreign prime contractor like TKMS or DCNS could be squeezed with penalties for late deliveries or other things.

I have to disagree with you on the point that Australia can’t build these new submarines. For sure ASC can’t do it or even maintain a submarine properly but that is not a fault of the workers or engineers. Especially TKMS has a background of training foreign workers and engineers to German standard and to send them back to build the submarines in their home country. They did this with Greek, Argentine and very successful with South Korean workers and also with Israeli engineers who implemented further features for bigger missiles on their submarines. Airbus trained the workers and engineers for the new final assembly line in Alabama in Hamburg. The company building these submarines in Australia should be a 100 % subsidiary of the prime contractor due to the same financial reasons. Only the first submarine should be build abroad.

Another company working in Australia could also be smart to keep the price for the frigates low.

Due to the licensed build Japan is out due to the fact Japanese companies have no experience of licensed build of submarines.


Regards,
MHalblaub

Pete said...

Hi MHalblaub

Thanks for your comments. Disintangling the ASC and DMO way of doing things and their current management from the Future Submarine project is essential.

The ANZAC frigate project was carried out efficiently in Australia so their is hope. Yes Australia's workers and engineers could build the subs if a company like TKMS or DCNS had prime managerial influence - through an Australian subsidiary.

Your German or French training suggestions are good ones.

On the decision to build overseas or in Australia, or section in both, much would depend on comparative cost estimates. But I wouldn't trust DMO or ASC to do the estimates.

This is an ongoing issue which will entertain us for years.

Cheers

Pete

Anonymous said...

Hi Pete,
As a casual observer I just wanted to know why Australia isn't interested the type 212A with AIP's, do these have some deficiencies in range that cannot be overcome by modification of the submarines themselves. I mention this as the Israeli 212 (dolphin class)seems to be modified for Israeli use. This option seems to be the cheapest and most risk free
Cheers
Harish

Pete said...

Hi Harish

The issues you raise are good ones - that are constantly under discussion here in Australia.

The TKMS Type 212 isn't marketed for export. It is the similar Type 214 that is being exported.

Yes the Dolphin is larger than the 214 and probably more suited to Australia's longer range, longer endurance requirements.

TKMS has been marketing the (mainly drawing board) very large 216 as a solution for Australia's, Canada's and India's longer range, longer endurance needs.

Regards

Pete

jbmoore said...

Well, whatever decision Australia makes, I hope it is a good one. I hope your country cancels the F-35 order.

Anonymous said...

Dear Harish,

the main difference between the Type 212 and Type 214 is the steel. Type 212 for Italy and Germany are build with amagnetic steel - even the dishwasher inside. The Type 212 only has one diesel engine! So much about reliable MTU engines.

Short: Type 214 is an Type 209 with AIP. Type 209 was offered from 1.200 t up to 1.800 t.
http://en.wikipedia.org/wiki/Shishumar_class_submarine
http://www.bharat-rakshak.com/NAVY/Submarines/Active/93-Shishumar-Class.html
According to the latest article these submarines have about as much range as Collins-class. 13,000 nm @ 10 kn surfaced.

Therefore I guess a 2,200 t Type 214 would be sufficient for Australia. 4,000 t are just the needs of some impotent Admirals. They want a real big stick.

TKMS can offer a custom-tailored submarine. So TKMS offered the Type 216. Why should the tailor ask about the porpuse of 10 pockets or a thrid leg as long as the costumer pays?

For a proper use of the F-35 Australia should look at the UK or Turkey. Both nations will not use this aircraft as a fighter. UK will operate the Typhoon as a fighter and Turkey on F-16 and a proprietary development fighter jet. The F-35 is a small bomber just like the F-117.

Regards,
Matthias

Pete said...

Thanks jbmoore

Australia seems to be congenitally incapable of making a new submarine decision. If Australia had accepted the US offer 4 years ago of buying 4 to 6 Virginia class submarines money and decision making effort would have been saved.

Yep Australia's F-35 purchase is very much the act of paying a large premium on insurance for the US alliance.

Regards

Pete

Anonymous said...

Hi Pete,
I was under the impression that Australia and New Zealand wish to be Nuclear free, do you think there would be a change of heart now due to changing geopolitics in East Asia. However that said how many years would it take australia to build crews and expertise in the area, finally the question as asked by Matthias, why is there a range anxiety in Australia for submarines. Is the due to resumptions of deterrence patrols by Russia and beginning of Jin class. I still believe Australia is not far behind western Navies in ASW operations certainly better prepared than most emerging powers in that scene with the help of USN
Cheers
Harish

Pete said...

Hi Harish

I'm happy to respond in brief to your questions once you indicate what you do and what country you are living in.

Regards

Pete

Anonymous said...

Hi pete,
I am from India, However a student in United States, If that should clear that up
cheers
harish

Pete said...

Hi Harish

Thanks for the biodata.

In response to your questions:

Yes both Aus and NZ wish the South Pacific region to remain nuclear free. NZ still doesn't allow US nuclear armed-propelled vessels in NZ waters.

Aus relies on the US for extended nuclear deterrence and quietly NZ probably does as well.

NZ spends little on Defence. NZ forces frequently augment Australia's larger defence force when they operate overseas.

No change of heart - only if Japan became nuclear armed, with domino effect of S Korea and Taiwan going nuclear - then Aus might go nuclear - see http://gentleseas.blogspot.com.au/2010/01/lyons-australian-nuclear-paper.html

I don't know how long it would take Aus to go nuclear.

Extra range for Australia subs adds operational flexibility, extra time and distance to loiter "on station" - say up to South China Sea and further. Bringing Pakistan and Iran into surveillance range might be handy. Don't know if there are Russian concerns but certainly concerns over China.

Regards

Pete

Anonymous said...

Hi Pete,
I Think I should have rephrased my earlier question, I was wondering would Australia look into nuclear propulsion for submarines not as a deterrent because I feel that any state under the present NPT regime would not be inclined to go down that route.
I believe a SSN with australia armed with ASCM would be a game changer. I speak this as both India and Brazil are going down this route and both definitely have one or other of the superpowers providing them technical knowhow. I believe Nuclear propulsion does not violate any NPT clause however I am sure you have a better idea
Cheers
Harish

Pete said...

Hi Harish

If the Australia government had any sense it would consider the years old US offer of Virginia Class SSGNs. This is due to the profound advantages of nuclear propulsion for Australia long transit (Fremantle to operational areas) needs.

As the Virginias http://en.wikipedia.org/wiki/S9G_reactor reactor runs on 93% "Bomb grade" HEU an Australia purchase of Virginias would run into NPT sensitivities.

Significant the S9G never needs to be refueled (has a 33 year - one fueling life) which might plausibly reduce NPT sensitivities.

Australia already has a medium range ASCM or SLCM in the Harpoon missiles already in the Collins. The Collins are also capable of firing Tomahawk's through their torpedo tubes - but apparently do not carry Tomahawks.

If India operated its SSNs too close to Australia's shores and in a confrontational way - that might speed an Australian decision in favour of Virginia buying.

Cheers

Pete

Anonymous said...

Hi Pete,
haha don't get me wrong here " if India operated its SSNs too close to Australia's shores and in a confrontational way - that might speed an Australian decision in favour of Virginia buying" I doubt India would ever be bothered to do that. A deterrence patrol that far from its coast especially with way Indian strategic forces are buried under tons of bureacrazy nope no hope. I doubts the rulers will trust the military with nuclear weapons so far their shores

Pete said...

Hi Harish

So from which US state are you writing from?

Regards

Pete

Anonymous said...

Hi Pete,
I am right now in at the univ of Maryland. and interning at rand corp
Cheers
Harish

Pete said...

Hi Harish

As you would have found the Uni of Maryland is known as a seriously good university - like Georgetown... close to the seat of decision-making - a bit like ANU in Australia.

I've been meaning to read some 2011 US RAND Corporation studies http://www.rand.org/topics/submarines.html concerning Australian submarine issues. Will soon get round to it.

Regards

Pete

Anonymous said...

Hi Pete,
Indeed lots of people from Australia here, Infact quite a few from active service personnel who are doing their masters here,some I believe from AUSTAL the ship building firm.
cheers
Harish

Pete said...

Hi Harish

Lucky Australian grad students in the DC area.

I hope some of the efficiency of American submarine building methods rubs off on them.

Regards

Pete