April 20, 2016

Submarine Decision "soon". Narrowing Down to TKMS and DCNS?

Youtube featuring the DCNS Shortfin contender - published April 14, 2016.
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This Australian ABC News, April 20, 2016 report strongly eliminates Japan from being the winner, but offers few indicators as to why.

“The Federal Government is preparing to announce the successful bidder for Australia's new fleet of submarines next week.

Key points:

-  Unknown if a final decision on the subs contract has been made
-  Coalition MPs and senators in SA have been pressing the Government for a decision
-  Window for announcement narrows with Budget looming
-  The ABC understands Cabinet's National Security Committee discussed the three international bids
    for the $50 billion contract last night [the night of April 19, 2016]

While it is not clear if the committee has made a final decision, it has all but eliminated the Japanese bid to build a fleet of 12 submarines to replace the Royal Australian Navy's ageing Collins Class subs.

That leaves France and Germany still in the race.

Defence department officials have had reservations about the Japanese bid from the outset, because it emerged as an understanding struck between former prime minister Tony Abbott and Japanese Prime Minister Shinzo Abe.

[ABC also said] Officials feared there was less enthusiasm in the Japanese bureaucracy for the deal and that would undo it in the long run…”

PETE’S COMMENT

Announcing the submarine decision "soon" appears essential to the Turnbull Government's political prospects in South Australia in the runup to the 2 July, 2016 Election. It is still unclear whether one clear "Winner" will be announced or a shortlist of two.

1. If the Japanese flotilla (Soryu submarine + 2 destroyers) leaving Sydney is a consideration in this timing then an announcement after Tuesday 26 April (on the 26th the flotilla is due to leave) is likely. A decision from 27 to 29 April would mean less embarrassment/less a snub for Japan and less embarrassment for the Turnbull Government/Australia. 

If the Japanese flotilla leaving is a consideration this suggests Japan has not won.

2. Fridays for announcements are usually considered politicly advantageous here in Australia - so a Friday 29 April submarine announcement might be likely.

3. The announcement (if made) would very likely be before the Federal Budget Day (3 May) and before Caretaker Period (with Caretaker probably 4 May onward). 

INDICATORS

One indicator though may be that Australian Defence Minister and the Chief of Navy have seemingly ignored the presence of the Japanese (almost an ally) flotilla in Sydney Harbour. Maybe ignoring Japan’s flotilla indicates correct procedural neutrality or maybe this is to minimise embarrassment to a losing contender. The Defence Minister has recently released Media announcements on several much more minor issues than an important flotilla in Sydney (see some minor issues at http://www.minister.defence.gov.au/marise-media-releases-archive/).

Another circumstantial indicator is the decision of the Prime Minister’s wife, Lucy Turnbull AO, to stand down as Honorary President of the German-Australian Chamber of Industry and Commerce. This was announced on April 13, 2016. Perhaps a consideration in separating from the Chamber was that TKMS is a Member of the Chamber. Lucy Turnbull’s timely and correct decision was mentioned by Sky News on April 19, 2016 and by the (Adelaide) Advertiser on April 18, 2016

Pete

27 comments:

imacca said...

Hmmmmmmm....Govt and Defense not doing the photo opp thing is an astute observation, but its just possible they are showing some much overdue diplomatic sensitivity. May find they descend in a horde at the end of the exercise. They have to give them some sort of send off if nothing else.

Narrowing it down rather than announcing the winner is a real possibility. All they NEED for the election is a reasonable and plausible appearance of a promise the build will be in SA and all that they NEED for that is to eliminate Japan.

Will be interesting to see closer analysis of the DCNS offering, but i think if it comes to a choice between Europeans, the Americans (being miffed Japan didn't get it and owning the combat system we want ) would prefer the Germans, and maybe the Germans have more diplomatic leverage of their own with the US than the French??

MHalblaub said...

I still wonder about this statement:
"The combat system we want."

Short question: why on earth?

Just because RAN knows how to implement some subroutines? In my opinion the only reason for the US support for a Japanese submarine was to force an US combat system. France and Germany may offer a system better suited to small submarines than SSN and also offer more privileges to alter the system.

Just because you know how to fix your Cadillac you won't buy a Mercedes offered for less?

Anonymous said...

Hi Pete

“An evil may sometimes turn out to be a blessing in disguise” according to Chinese proverb. But, before being a blessing, I should say something.

I cannot understand what some OZs say. Ambassador Sumida said Japan would offer every submarine technology to Australia, and currently MoD sent a flotilla to Sydney. But, according to ABC news, “Officials feared there was less enthusiasm in the Japanese bureaucracy for the deal”. MHI showed commitment by President Miyanaga’s speech, welder training plan in Kobe and setting up Australia branch. Although Japan submitted new submarine design with long range, some people pointed out short range of Soryu as a drawback of submitted design.

I am not going to interfere how OZ taxpayer uses his or her tax at all. But, causeless accusation is not good. Japan participates in the submarine bidding as a friend by request of OZ government.

Regards
S

Anonymous said...

This is what I've said all along. A risk averse approach was always going to favor the Europeans over Japan, as the real risk is industrial, not technical. No point in picking an MOTS solution if the industrial set-up is unproven... Australia of all countries would understand this after the AWD fiasco.

If it comes down to TKMS vs DCNS, I would expect the US to be neutral. Certainly there will be many US officials who cooperate daily with French counterparts on naval, terrorism and diplomatic issues (especially inside the USN, DoD and State Department), and who might be expected to favor the French. The Germans are a non-entity and less likely to exchange favors.

HK

imacca said...



Up early browsing the news over cafe.

http://www.theaustralian.com.au/national-affairs/defence/japans-subs-bid-is-seen-as-the-weakest/news-story/45dae566e2c5f2f5c4ba3f603178ed29

" The Australian has been told the Japanese bid was considered the weakest and that of the French company, DCNS, the strongest. "

Ok, so why would the DCNS bid be seen as strongest. My understanding is they are leaning to wards a hybrid build (1-2 in France, rest in Oz) and there is the hole France / US issue.

Is a Barracuda size boat just so much better??

http://www.adelaidenow.com.au/news/south-australia/decision-on-50bn-future-submarine-project-expected-next-week-with-germanys-tkms-firming-as-favourite/news-story/214646e9ba4487ff8bc8a6f5ff655340

Interesting that TKMS (who did the Anzac class) seem quite comfortable with price and workforce issues with an Australian build and are re-emphasizing the $20B construction cost while the Govt is still saying $50B as far as i know. $30B is a LOT of contingency money??

Lol! going to be quite a few people in the media embarrassed if the Japanese DO get this now. :)

Nicky K.D Chaleunphone said...

Hi Pete,
You may want to Check out this story from the Diplomat

Did Japan Just Lose the Bid to Build Australia's New Subs?
http://thediplomat.com/2016/04/did-japan-just-lose-the-bid-to-build-australias-new-subs/

Peter Coates said...

Hi MHalblaub [20/4/16 9:59 PM]

Re "I still wonder about this statement:
"The combat system we want." Short question: why on earth?"

1. Using the US combat system Hopefully gives closer access to the constantly updated SeaWeb database.

2. As with the F-35, Australia buys the most expensive US systems as an ongoing Premium on the US's "we will protect Australia" Insurance Policy.

Whatever country wins, hopefully they can help modify the US combat system when integrated with the Future Submarine in such a way that it is less power hungry. Having a big Hotel load drains batteries and AIP faster.

Regards

Pete

Ztev Konrad said...

Imacca. The $50 bill is not the construction cost. Its prebuild cost, construction cost, plus sustainment cost ( upgrades refits) plus RAN setup and weapons costs over 30 years. All that is in 'future dollars' as well.
Thats why the construction cost is way less and real figure is closer to $30bill (incl sustainment)
www.aspi.org.au/publications/what-price-the-future-submarine-by-andrew-davies

Peter Coates said...

"Japan's submarine bid looks sunk" (of 21 April 2016) is the best article I've seen on the subject
see http://www.lowyinterpreter.org/post/2016/04/21/Japans-submarine-bid-looks-sunk.aspx

aside from Sub Matters articles natürlich.

Anonymous said...

Hi Pete

I introduce one of my favorite poem instead of commenting relation between Australia and Japan.

Woman's Constancy. Now thou hast loved me one whole day, Tomorrow when thou leav'st, what wilt though say? Wilt thou then antedate some new-made vow? Or say that now. We are not just those persons which we were? ---By John Donne


Regards
S

GA said...

Hi Pete,
So if we assume that ADM (http://www.australiandefence.com.au/news/sea-1000-down-to-two-unlikely) was right last january and if we link it with your article above ;
DCNS wins the cep !(?)

Peter Coates said...

Hi S [at 22/4/16 9:10 AM]

Yes woman are like that.

Here's 8 quotes from Oscar Wilde

1. I think that God, in creating man, somewhat overestimated his ability.

2. The world is a stage, but the play is badly cast.

3. Always forgive your enemies; nothing annoys them so much.

4. It is absurd to divide people into good and bad. People are either charming or tedious.

5. The only thing to do with good advice is pass it on. It is never any use to oneself.

6. Some cause happiness wherever they go; others whenever they go.

7. What is a cynic? A man who knows the price of everything and the value of nothing.

8. A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal.

Regards

Pete

Peter Coates said...

Hi GA [22/4/16 9:12 AM ]

Except for Lucy Turnbull's "coincidental" stand down from the German-Australian Chamber 9 days ago and the possibility that Malcolm has so rushed the decision that he may only feel confident in announcing:

A shortlist of TKMS and DCNS.

Also Abe may be currently on the phone to Malcolm saying we can have the Soryu AUS's for free (almost).

Regards

Pete

imacca said...

http://www.afr.com/news/politics/federal-police-called-over-submarines-leak-20160422-gocuw1

Ummmmmmm.......this may be an "oh dear" moment for a number of people??

The Japanese fleet is still in town, and this story breaks??

Peter Coates said...

Hi immaca [at 22/4/16 6:26 PM]

Yes I just saw an Australian ABC News report about the Australian Federal Police (AFP) being called in to investigate the leak.

The decision to call in the AFP serves as convincing proof that the "Japan is out" leak is accurate.

Here's part of the Financial Review article of April 22, 2016 http://www.afr.com/news/politics/federal-police-called-over-submarines-leak-20160422-gocuw1

The Australian Federal Police have been called to investigate a leak of highly classified information concerning the culling of Japan from the bid process to build Australia's next fleet of submarines.

...Sources said Defence Department secretary Dennis Richardson called in the AFP on Thursday following reports the competitive evaluation process was now between France's DCNS and Germany's ThyssenKrupp Marine Systems (TKMS).

Japan's Mitsubishi Heavy Industries had missed out on the $50 billion contract.

The reports follows a round of meetings this week by the national Security Committee of cabinet and an announcement next week which will be used to bolster the Coalition's electoral prospects in South Australia.

A senior source said the police had also been asked to look at the Sea 1000 group comprising bureaucrats and defence officials who are advising on the bid process.

Reports of the Japanese exclusion sparked a furious bout of last minute lobbying by Tokyo.

The ABC reported that Japan is weighing up a diplomatic offensive with one of the options under consideration being a direct call by Prime Minister Shinzo Abe to Mr Turnbull to plead Japan's case.

It also has domestic political ramifications given Tony Abbott, as prime minister, had virtually promised Japan the contract in an undertaking to Mr Abe.

...The United States which is backing the Japanese bid, was also unhappy.

Mr Turnbull will announce next week that most, if not all of the next fleet of 12 submarines will be built in Adelaide. It is unclear whether he will announce the final bidder or just the short list.

See the whole Financial Review article at http://www.afr.com/news/politics/federal-police-called-over-submarines-leak-20160422-gocuw1

Regards

Pete

imacca said...

Its the implications of Australia NOT being able to maintain security around a matter like this that i think will be the worst. There would have been a lot of sensitive technical info in the bids and if the decision is leaked (that being a sensitive matter in itself at the moment) then it is a very bad look for us when dealing with OS suppliers of high tech gear.

Peter Coates said...

Hi imacca [22/4/16 7:25 PM]

Its possible/probable that, like many high level leaks, it was authorised.

Japan may have expected, and perhaps was pressing, that Australia announce Japan had won while the Japanese sub was in Sydney Harbour.

The leak gave Turnbull a sound reason why he could not accede to that wish. The leak would have also signalled to ASC-Adelaide that they and unions would work with familiar TKMS or DCNS in building all subs in Adelaide/Australia. Japan was too much of an industrial unknown over the highly pre-Election sensitive issue of build in Australia. Shorten - after all - scored political pointsi railing against Japan in making a speech over a year ago in front of Adelaide workers.

Like most leaks (that were actually authorised at a high level) the much advertised AFP investigation quietly goes nowhere and the matter forgotten.

Does anyone remember the AFP investigation into the Collins sub extended service into the 2030s issue? Why was there no publicised result. Why wasn't Abbott legally dealt with when he publically confirmed the contents of a highly classified leak? Different standards for politicians.

When politicicians want an issue to be buried they organise a Committee or tout an Investigation.

The AFP must get sick of being politically played with.

MHalblaub said...


Dear Pete,

I doubt that access to the SeaWeb database is related to the US combat system. Australia would be better to use the saved money for joint exercises or gathering of information for your partner.

For a working Insurance Policy Australia would need an aircraft to defend its territory. Therefor Australia needs a fighter aircraft and not a fat and slow bomb truck. Australia would need to defend its territory for a while on its own before the insurance company will send some help.

I would recommend the SAAB Gripen. Use the saved money for joint exercises and offer your partner another type of aircraft.

The problem with having the same systems as your partner is you are vulnerable at the same point. Far easier for an enemy to exploit such a weakness.

Buying a friend is not such a good option.

Regards,
MHalblaub

Ztev Konrad said...

"signaled to ASC that they would work with familiar TKMS and DCNS"

Not sure how ASC would be 'familiar' with TKMS and DCNS, as of course the current sub designers were Kockums and the AAW destroyers design are via Navantia in Spain.

Anonymous said...

Hi Pete

“PM Turnbull, you did good job”, this is general feeling of Japanese in the internet bulletin board of Yahoo Japan, the biggest portal site in Japan. In this submarine deal, many Japanese worried about the leakage of highly classified secret to China through Australia. Now, both their worry and decision of Mr. Turnbull were proved to be perfectly right by a series of silly information leakages.

Now, without irony, I am not going to complain decision of Oz government. Oz government thought about her country and made decision for her people at her own risk. But, problem is the information leakage and its timing of our flotilla visiting. Oz should think how the crews of the flotilla feel.

Regards
S

Peter Coates said...

Hi MHalblaub [23/4/16 2:28 AM]

The database has a more usual name of Dictionary which since the 1950 has included the acoustic signatures of (at that time) Soviet submarines. Since then much greater database storage capacity has permitted many more types of data to be stored (eg. hydrographic conditions caused by the presence or absence of an enemy sub).

The detection and targeting functions of combat system are heavily enhanced by databeses (called SeaWeb or other names).

Australia has been using Boeing Hornets for decades and now also Super Hornets with few problems. Very happy with them and ttheir especially useful over Iraq-Syria. A fast climbing and good dogfighter like the Gripen (ideal for short warning times in Europe) still loses on bombing ability. The USN is ordering new Super Hornets... . If Australia is smart it will order 24 more Super Hornets within the next five years for delivery around 2026.

Australia is semi-signed to buy 72 F-35s but there must be some outs (like excessive rising unit prices). If Australia is smart it should only buying 24 F-35s, much like Australia bought only 24 overpriced, over-specialised, F-111s.

True about common vulnerability. The Russian efforts to detect F-35s even from the front (by using distributed radars) are increasingly successful. Russia sells radars to China.

So F-35s are most effective against NON-technically advanced enemies.

Regards

Pete

Anonymous said...

Yes certainly former Prime Minister Tony Abbott (who in 2014 secretly promised Abe that Japan had automatically won the submarine NON-process) should travel back to Japan and beg forgiveness.

Perhaps Abe should encourage Abbott to indulge in a bit of seppuku or is that harakiri? As Abbott has brought shame to himself and to Australia.

Abbott's promise to Abe was illegitimate, incorrect and he did not have the right. Apparently Abbott's office did not seek the Department of Defence considered, formal advice with consultation to all relevant Federal Government Departments. No leader in a democracy in such a way should give himself sole discretion to secretly promise Abe that Japan has won a contract worth 10s of $Billions.

So Australia after holding a correct CEP is not bound by Abbott's foolishness.

Ztev Konrad said...

Anonymous do you have a reliable source where Japan was 'promised the contract' by Abbott. I feel that was only speculation and Abbott just asked them to compete.

Peter Coates said...

Hi Ztev - on Abbott

Perhaps read the many references in late 2014 through 2015 in the SMH, Australian and even Sub Matters regarding Abbott's "Captain's Pick" of the Japanese/Soryu submarine.

To save time this is especially revealing http://www.openaustralia.org.au/debates/?id=2015-02-23.96.1#g97.1

On 23 February 2015 Prime Minister Abbott stood up in Parliament and said "the Japanese make the best large conventional submarine in the world."

Does that look like an incorrect preemptive judgement by a Prime Minister?

What would the Japanese expect of an Australian Prime Minister who said "the Japanese make the best large conventional submarine in the world."?

Cheers

Pete

Anonymous said...

Hi Everybody,
Let me add two points to your hot discussion.
I think many of Japanese people now feel, more or less, happy with this news, as, in the very depth of their mind, they feel it's too much to export such major weapon systems to foreign countries, even to allied countries. I think if this issue had been put to national vote, it would be almost certain the government had failed to obtain majority. In that sense, Prime minister Abe will now feel unfortunate enough that he couldn't catch a good chance to lead Japanese people.
Another point; Japanese companies like MHI of KHI will be, presumably, also not very unhappy with this result, as they are, in reality, not very eager to promote military business, a minor segment for those companies.

Just for a reference of different viewpoint at this moment,

regards,

MMM

Ztev Konrad said...

Anonymous, its the japanese methods of construction and quality that Australia is missing out on. Too often these days, naval ships, despite years of design, very high costs, are of poor quality. Japan is well known for the reverse, as they have a poor tolerance for low standards.

Thanks for that reference about Abbott, unfortunately it doesnt work. However Im still sure an off the cuff comment that merely states the obvious, isnt evidence that a decision had been made.
Abbott isnt really experienced in Defence issues, so could well have thought MHI 'cant lose' when it came to a detailed look at the contenders. BUt we can see he did everyone a favour in introducing a very high quality design into the selection process.

Unfortunately the mistakes of the Collins look to be repeated as a totally new design is selected, rather than one with some modifications, and the quality will not be up to scratch, as in the Collins fleet which is 'fragile' operationally.
So instead of taking a Soryu and having a small increase in length, (which is always advantageous for higher speed or lower fuel consumption), and having most of the systems right sized, so that time and money can be spent on the other main systems such as combat system and propulsion which will be specific for Australian requirements.
eg How much effort will be wasted on the tail end design and the propellor when the Japanese one is ready and waiting ?

Ace Pilot said...

"the investigation follows an ABC report earlier in the week that said the Japanese bid had been "all but eliminated" from the tender process."
http://www.reuters.com/article/us-australia-defence-submarine-idUSKCN0XK02U

If this is true, the current Aussie gov is nothing but a liar and a fraud. Japan was just fooled by pro-China gov and handed over them detailed information about their submarine that the country has been protected as the highest level of classification. Hell, even Japanese gov has naively sent one of the submarine to prove that the information is real. Is there any doubt that this information already passed to China?