April 18, 2016

Aus Gov "Continuous Shipbuilding" Announced - 3 Surface Vessel Classes, Shortlists


Australia's Turnbull Coalition Government has made a major announcement today which covers a continuous building program for three surface vessel classes. These are Offshore Patrol Vessels (OPVs), Future Frigates (FFs) and Pacific Patrol Boats (PPBs).

The announcement, by Prime Minister Turnbull and Defence Minister Marise Payne, is in the Media Release, of April 18, 2016, below http://www.minister.defence.gov.au/2016/04/18/prime-minister-and-minister-for-defence-continuous-naval-shipbuilding/ .

The announcement is aimed at improving the Coalition Government's chances of winning the next Federal Election, which appears very likely to occur on July 2, 2016. [P.S. it did occur on that date]

The announcement in particular is aimed at improving the Turnbull Government prospects in South Australia, which is described as a swing state, where Coalition MP and Senate positions may be lost. South Australia was promised the FF build months ago and the OPV build was also thought likely in South Australia. This helps protect the seat of the most important Government MP in South Australia who is the Industry Minister, Christopher Pyne. South Australia is heavily contested between 4 parties: the Liberals, Labor, Greens and the emerging Xenophon Team.

The other major beneficiary of the announcement is Western Australia – with the most prominent MP being the Foreign Minister (also Deputy Leader of the Liberal Party) Julie Bishop. Austal at Henderson (part of Perth) Western Australia specifically benefits. Western Australia is normally Liberal, that is pro-Coalition but Labor is significant. The shipbuilder Civmec is likely to benefit in Western Australia. Civmec also owns Forgacs shipbuilding sections interests at Tomago, NSW. The Defence Minister Marise Payne is a Senator from NSW.

Cairns in Queensland gains from PPB maintenance.

The big loser is Williamstown dockyard in Victoria, considered a Labor heartland. The Coalition has few seats in Victoria to lose, so this shipbuilding announcement doesn’t favour or even mention Victoria.

A future submarine announcement, however, may benefit Williamstown Victoria, and also South Australia and Civmec Western Australia. If any announcement on submarines is made before a July 2, 2016 election it is likely to imply but perhaps not specifically promise that all submarines will be built in Australia. There is probably insufficient time and political risk in the run-up to an Election of specifying the actual winning contender (or a shortlist of two). 

The Media Release is below http://www.minister.defence.gov.au/2016/04/18/prime-minister-and-minister-for-defence-continuous-naval-shipbuilding/   In [ brackets I have put in hotlinks to the shortlisted vessel type or range of vessels] :
"Prime Minister and Minister for Defence – Continuous Naval Shipbuilding
18 April 2016
The Turnbull Government is securing a sustainable long-term Australian naval shipbuilding industry.
Today the Government is announcing the build locations for 12 Offshore Patrol Vessels and up to 21 Pacific Patrol Boats, in addition to nine Future Frigates previously announced.
These announcements provide for two shipyards to implement the Government’s commitment to a continuous build of naval surface ships in Australia. Major warships will be built in Adelaide and minor vessels in Henderson, Western Australia.
These three projects will ensure Australia retains a sovereign capability to build and sustain its naval vessels. Together they represent close to $40 billion worth of investment in Australia’s future naval capabilities and our naval shipbuilding industry.
They will directly secure more than 2,500 jobs for decades to come. They will also generate thousands of additional jobs with suppliers.
Offshore Patrol Vessels
·       First pass approval for the Offshore Patrol Vessels, with construction to begin in Adelaide from 2018, following the completion of the Air Warfare Destroyers and transfer to Western Australia when the Future Frigate construction begins in Adelaide in 2020.  This approach ensures that jobs and skills are retained in Adelaide.

·       As part of the Competitive Evaluation Process three designers have been shortlisted; 

     -  Damen of the Netherlands, [ choice of two 1800 models  ]
     -  Fassmer of Germany, offering the OPV 80 ] and 
     -  Lurssen of Germany offering the PV-80 ]

     to refine their designs.

·       This program is estimated to be worth more than $3 billion and will create over 400 direct jobs.
Future Frigates
·       First pass approval for the Future Frigates. Three designers

     -  BAE Systems with the Type 26 Frigate; 
        https://en.wikipedia.org/wiki/Global_Combat_Ship Type 26 ] 
     -  Fincantieri with the FREMM Frigate 
        https://en.wikipedia.org/wiki/FREMM_multipurpose_frigate ]
     -  Navantia with a redesigned F100 
         [ https://en.wikipedia.org/wiki/%C3%81lvaro_de_Baz%C3%A1n-class_frigate F100 ]

have been short-listed to refine their designs. The frigates will all be built in Adelaide, incorporating the Australian-developed CEA Phased-Array Radar.

·       The Competitive Evaluation Process is on schedule to return second pass approval in 2018, which will allow for construction to commence in Adelaide in 2020.

·       This program is estimated to be worth more than $35 billion, and will directly create over 2000 jobs.
Pacific Patrol Boats
·       Combined first and second pass approval for the replacement Pacific Patrol Boats.  Austal Ships Pty Ltd has been selected as the preferred tenderer to construct and maintain up to twenty-one replacement steel-hulled Pacific Patrol Boats in Henderson, Western Australia.

·       Subject to negotiations, this program is estimated to be worth more than $500 million and will directly create over 130 jobs.

·       Austal proposes to conduct support of the replacement Pacific Patrol Boats including deep maintenance from Cairns, Queensland. In total, through-life support and sustainment (including deep maintenance) for the Pacific Patrol Boats is valued at a further $400 million over the life of the boats.
Today’s announcements are central to the Government’s comprehensive Naval Shipbuilding Plan. These three significant ship builds will deliver the necessary infrastructure requirements across the Adelaide and Henderson shipyards. They will create new jobs, develop necessary skills and broaden cooperation between industry and government.
The Turnbull Government is committed to maximising the opportunities for our Australian Defence industry to participate in these shipbuilding programs. Through the Defence Industry Policy Statement the Turnbull Government will reset the relationship between Defence and industry, driving jobs and innovation which will have spillover effects into the wider economy.  In particular, the new Centre for Defence Industry Capability will help small to medium enterprises identify opportunities to join the supply chains necessary to deliver these ambitious naval shipbuilding projects.
After six years of Labor inaction in which more than $18 billion was ripped from the Defence budget, the Turnbull Government is getting on with the job of securing our long-term national security and economic prosperity. The Government’s historic continuous build program will ensure the Navy receives its future capability requirements while delivering the certainty that shipbuilders need."  

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A good ASPI Strategist commentary on the coming congestion in Adelaide of building so many ship/submarine types, sustainment and upgrades - is Mark Thomson's "Building the future Navy: the OPVs" of 28 April, 2016.



ONeil Padilla said...

Hi Pete,

I'll take the Fassmer OPV 90 and the Italian FREMM (which I've been saying for a while that is the closest thing to what we're after in regards to a ASW Frigate)
Hope the navy gets the MILAS missiles with it as well.

French must be pissed. I'm very surprised the Germans didn't get a look in with the Type 125?!? (I thought it was quite good) too big? too expensive Perhaps?

If the Govt. wanted to save money why didn't they consider the Iver Huitfeldt class?!?

I'm not a fan of the Spanish design, it's too old and I'm not sure they can redesign it for electric propulsion.

Love the Type 26 but don't see it happening ($$$)

That's my 2 cents worth.

Peter Coates said...

Hi ONeil Padilla

I have limited knowledge of OPVs and Frigates.

I am aware the Fincantieri version of the FREMM (at 6,700 tonnes) has greater capabilities than the French version (6,000 tonnes). This includes greater hangar space (enough for 2 helicopters) in the Fincantieri.

As well as ASW in the Frigates selectors are looking for VLS for at least 16 Tomahawk, and also some air warfare capability.



MHalblaub said...

German Type F125 or Baden-Württemberg-class is a ship with long endurance between returning to home port. Two years are envisioned. This class has currently not much fighting capability but space to do so. This class is to keep the F124 class away from peace-keeping missions.

F124 or Sachsen-class is a child of the Trilateral Frigate Cooperation (TFC). Other children with different toys are Álvaro-de-Bazán-Class and the De-Zeven-Provinciën-Class. So there is a somehow German ship around.

The upfront price for the Spanish design might be cheaper as Australia should know from Can erra-Class.


imacca said...

Fassmer OPV's look interesting. Particularity if we actually want a significant but not OTT weapons fit.


Or the deluxe?? :)


Although the 98m version seems almost a frigate or corvette if the deck slots for LNG tanks got used for missile VLS??

Still, both under the 2000t limit, both have actual, proper hangars (which may be an important factor for our Navy) and both have respectable self defense fits that include Sea RAM.

Interesting its being reported in the Australian today that the Subs provider will be announced BEFORE the govt prorogues parliament and goes into caretaker mode. So.......on or before May 10/11.

Ztev Konrad said...

Surely a coherent process is one that has design settled before the shipyard is chosen. It seem to be a cart before the horse approach, all for naked electoral advantage.
It can only end in tears.
As for the Submarine choice:

As this is the 'pathway' that SEA 1000 website indicates as its preferred process
Department of Defence will seek proposals from potential partners for:

Pre-concept designs based on meeting Australian capability criteria;
Options for design and build overseas, in Australia, and/or a hybrid approach;
Rough order of magnitude (ROM) costs and schedule for each option; and
Positions on key commercial issues, for example intellectual property rights and the ability to use and disclose technical data.

This is before choosing an overseas design

Ztev Konrad said...

The Luerssen OPV seems especially interesting, as the top end version has a large helicopter deck ( but no hangar which could be added)) and a 57mm gun. But the interesting bit is the rear loading ramp and door over the stern. An RIB can just run up while underway. Very innovative for this type of vessel as normally you go to much larger for a launching dock.

Peter Coates said...

Hi imacca [on submarines]

Yes its an interesting article in The Australian today April 19, 2016 http://www.theaustralian.com.au/national-affairs/defence/japanese-send-submarine-in-a-first-proof-of-good-design/news-story/4945bac8f675548605133dd92f2de102 which indiactes:

"The [Australian Government's] National Security Committee will today consider the navy’s recommendations on which of the contending designers from Japan, France and Germany to choose."

As the winner(s) of the submarine contest is a high cost project and important policy decision electoral conventions would indeed mean any announcement made would be before the Caretaker Period (maybe beginning May 4, 2016) and (if later) should be after the very likely Election Date of July 2, 2016.

Turnbull appears desperate enough to take the political gamble of announcing the submarine winnerin the next 2 weeks. In that case it would fall to the Winner to be very careful concerning where in Australia it might give most of the submarine build work (what seats/electorates, cities and States)



Peter Coates said...

Hi Ztev [at 19/4/16 11:52 AM]

The CEP process is much more fluid, open to political priorities, than a formal Tender process.

The process at http://sea1000.gov.au/current-activities/competitive-evaluation-process/ may now have done by the CEP Assessment people. They apparently have passed their advice for Cabinet decision possibly today. Announcement of the Winner or narrowing down to 2 Winners may occur at a date the Government thinks politically advantageous.

Once a Winner is declared the Winner would be on firmer ground to negotiate contracts with Australian companies for joint ventures, contracters and sub-contractor/suppliers.

As ASC and Adelaide might get the main work all the defects of the Collins process may be repeated. But the real problems may only come out after the Australian subs begin to be built, around 2028.



Anonymous said...

Hi Peter,

It's good to see the government serious about naval hardware. The frigates are almost the same as the Hobart class destroyers in tonnage and size. Essentially we'll have 12 destroyers, or 12 large frigates. It'll be exciting to see them armed with the anti ship missiles derived from the SM-6 missile.

I was also wondering what the difference between an "Offshore" patrol vessel and "Pacific" patrol vessel was. Is the Pacific patrol vessel a smaller one for "brown water", between Pacific islands and "Offshore" bigger to go into the middle of the Indian ocean, and down to Antartica?

In any case, it'll be exciting to see the final winner's designs for the subs and surface ships.



imacca said...


which translates as "up your Victoria, we dont need seats here" i guess.

" Is the Pacific patrol vessel a smaller one for "brown water", between Pacific islands and "Offshore" bigger to go into the middle of the Indian ocean, and down to Antartica? "

From my reading of the requirements yup, but the OPVs arent specified as seaworthy for deep southern ocean operations.

Peter Coates said...

Hi Adrian

Australia is building

3 Air Warfare Destroyers
(at about 200% higher than the price they would cost to build in Spain)

and intends to build

9 Future Frigates (probably at 100% or 200% higher than designing country's price)

Main difference between OPVs and PPBs (https://en.wikipedia.org/wiki/Pacific-class_patrol_boat#Replacement ) is not where they can go put what Australian purchase and maintenance cost structure applies to them. Australia has decided to devote more resources to each OPV and use them for a wider range of roles - hence they are much so they are much larger than the PPB.



Peter Coates said...

Here's a useful article on the PPBs http://www.lowyinterpreter.org/post/2016/02/03/Replacing-the-Pacific-Patrol-Boats-A-smart-re-investment-play.aspx

Anonymous said...

Hi Pete,

Thanks for your answers.

I think most naval vessels built in Australia will be always much more expensive than in their "home country". But if you plan for the worst, a war, Australia needs to have facilities and skilled people who can do manufacturing and maintenance of them. Australia's lucky, being wealthy, so we can afford to do so.

Some of those Fassmer OPV look quite exciting, especially the 98m version.

Thanks again for your objective and informative blog.

Have a good one,