February 28, 2016

Australia's high cost, less than "regionally superior" Future Submarines

Prime Minister Turnbull and Defence Minister Payne (on left of fin) at sea. The Turnbull Government is suffering much political and financial inertia - so launching the 2016 Defence White Paper provides a much needed "achievement" (Cartoon by David Rowe via AFR Feb 25, 2016).
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The Turnbull Government's 2016 Defence White Paper (DWP) (PDF 10MB) includes breathtaking dollar figures calculated to win votes for the imminent Election. But unfortunately the submarines will not  be “regionally superior” (claimed on DWP pages 19, 21, 90, 91 and 115). They will, however, be the most expensive conventional submarine in world history.

It is unfortunate that the upfront cost of Australia’s 12 Future Submarines will be unusually high for mere conventional diesel-electric submarines, at A$55 Billion or more (see Table below). As they will be conventional they will not be “regionally superior.” The "superior" accolade goes to the nuclear propelled attack submarines (SSNs) belonging to China, Russia, (in future India), France, UK and the US that frequent or at least transit the Asia-Pacific (frequently called "Indo-Pacific") Region.

In terms of China - perhaps the most likely future enemy - China’s Type 093 SSNs will remain superior in the critical areas of range, speed and fully submerged (not loud diesel) operation. China's  future Type 095 SSNs (likely to be launched before 2030 (long PDF 10MB, December 2015, CRS Report RL33153 to Congress, page 87)) will be even more regionally superior than Australia’s shorter range, slower, noisier (when on diesel) and more vulnerable (when snorting) Future Submarines. Friendly India is also planning to build SSNs before 2030. So Australia's "regionally superior" claim will turn out even more wide of the mark.

This less than "superior" submarines will not come cheap. Australia will be paying the highest cost ever envisaged for merely conventional submarines. Australia’s News.com points out, February 25, 2016: “The ongoing cost over the lifetime of the 12 submarines could be as much $100 billion, putting the total cost at $150 billion. Defence officials and industry experts consistently say acquisition is only one third of the cost.” 

The A$55 Billion upfront cost of the 12 Submarines is from the “Future Submarine Program” items on "Table 6: Summary of key investment decisions from FY 2016–17 to FY 2025‑26." below. This is on page 89, 2016 Integrated Investment Program

Program title
Program Timeframe
*Approximate investment value
Future Submarine Program – Evaluation
Scheduled for approval†
Less than $100m
Future Submarine Program – Design and Construction
2018–2057
>$50bn
Future Submarine Program – Weapons and Systems
2018–2045
$5bn–$6bn
*  “The figures in the table cover the acquisition element of the programs. There will be additional investment in whole-of-life sustainment and operating costs for each program. All figures are calculated on an out-turned price basis ^.”

^ Out-turned dollars methodology recognises that the dollar is worth less over time. Out-turning a project budget takes into account the planned increases in overall Defence spending due to inflationary pressures. It is very difficult to estimate out-turned price as this involves:
- estimating inflation in Australia and in the US and France and
- estimating estimating exchange rates of the A$ with US$ and Euro.
- all over a period out to 2057. 

The Federal Government has been careful to make only vague statements that the submarines will be built in South Australia. This keeps open the option of an overseas build if (as seems apparent) the Australian costs are too high. If built in Australia:

- Australia will need to go to the expense of building a Future Submarine shipyard. This is when Japan, Germany and France have perfectly good submarine building yards in their own countries (which enjoy economies of scale)

- an Australian build may involve another 200% over world price burden, as is occurring with the AWDs

- many other Australian companies will need to be created and integrated into the 12 submarine build. Many will then close down at the end of the project - as happened with the Collins Project.

 I wonder how cheaply the submarines could be built in Japan, Germany or France?
 This would involve adding:
 the A$50 Billion Acquisition cost
 + A$6 Billion for Weapons and [Combat] System
Maybe also consider the A$100 Billion whole-of-lfe sustainment estimate.
Perhaps the submarines will all be assembled in Australia or all overseas.

Pete

February 26, 2016

Defence White Paper Release Increases Chances of an Early Election

Prime Minister Turnbull, statesmanlike, delivering the Defence White Paper yesterday - a good time to trigger an Early Election (soon). (Photo courtesy AAP via Capital Bay News)
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Australian Defence White Papers are political documents with electoral aims due to their overt (or implied) spending promises. Ztev Konrad made some relevant comments along these lines in Comments [at 26/2/16 7:35 AM].

The 2016 Defence White Paper (DWP) has considerable next Election relevance although the vast sums being quoted by the Australian Government are unaffordable for the foreseeable future.

Normally the more respectable Australian strategic websites (even government funded think tanks) will not comment on the electoral choices of political bosses. Politically freethinking Submarine Matters cares not.

On February 8, 2016 I wrote Australian Tax Problems May Mean Early Election on Australia's falling tax base - government problems raising taxes - inability to fund popular programs including health, education and welfare. This all means budget shortfall. All increasing the chances that a Government may wish to go to Election before announcing an austerity Budget. 

The Government of Australian Prime Minister Turnbull's declining voting prospects (now running 50% - 50% with the Labor Opposition) are likely to be addressed by Turnbull before the opposition Labor Party becomes too popular. Like strategic competition its a zero sum game. Labor is creeping up in popularity a position likely to jump upwards after Turnbull releases an unpopular Budget in May 2016. 

I posit that there is a 60% likelihood that Turnball wants to go to a double dissolution triggered  Election in April 2016, before he has to present a very unpopular Federal Budget (set for May 10, 2016).

On February 26, 2016 The (Melbourne) Age commented "Turnbull is now actively weighing the double-dissolution option. And he is being urged to go soon by some who've been at this game a lot longer than he, among them the electorally canny Christopher Pyne.

ELECTORAL SIGNIFICANCE OF THE DEFENCE WHITE PAPER (DWP)

Defence usually rates lower on the spending list than health, education and welfare unless there are compelling reasons like strategic need and votes. 

The DWP received a remarkably popular reception. Even the Labor Opposition have given it a seal of approval (bipartisan support).

The DWP underlines strategic need = China overall, particularly in the South China Sea. Voters made nervous rally around the incumbent chief ie. Turnbull's Government.

All of the spending promises in the DWP target votes particularly in the political swing state of South Australia. Manufacturing, design and sales communities all over Australia envisage that the DWP offers business and jobs.

It appears the DWP was published earlier than the "in first quarter 2016" expected. Governments are usually tardy - but the late norm of 31 March 2016 did not happen. Publishing a politically major document now gives political advantage electorally.

Turnbull has been positioning his Government for an early Election in other ways including:

The Turnbull Government is attempting to pass a measure with a time-frame just before an early election can be organised. To remove pesky minor parties and independents in the Senate “The government hopes to have the laws passed, after a short inquiry, before Parliament rises on March 17 2016… Labor is split internally over the issue, with leader Bill Shorten declining to outline his party's position on [February 22, 2016].

-  Turnbull has been making extravagant, out-of-character attacks on the opposition eg. Labor's proposed tax policies will "slash the value of Australian homes" which indicate he is worried about his Government's popularity.

-  Turnbull's courting of a more effective leader of his National Party Coalition partner, Barnaby Joyce. His relations with frequently brittle Joyce are currently good, implying good governance, though this political honeymoon cannot last.

Two bills dealing with restoring the building industry watchdog, which could provide a trigger for a double dissolution election, will be the subject of a public hearing on Thursday [March 4], ahead of the final report being tabled on March 15.

So like most major political documents the timing of the Defence White Paper's release was not arbitrary. Its Electoral significance can be demonstrated.

Pete

February 25, 2016

2016 Defence White Paper: Submarine Matters Much Across Sub Issues Raised

For "regionally superior submarines/boats" see Defence White Paper (A.) pages 19, 21, 90, 91 and 115. (Poster sourced via The Guardian)

Australia's 2016 Defence White Paper has been published today - see the Homepage at  http://www.defence.gov.au/whitepaper/ .

It consists of the traditional:
A.  2016 Defence White Paper document (large PDF of 10 MB), 191 pages (itself quite long): http://www.defence.gov.au/whitepaper/Docs/2016-Defence-White-Paper.pdf

But what makes it a huge reading and assessment task is that its 191 pages and there are two additional documents (published with it) which are:

B.  2016 Integrated Investment Program (PDF 5MB) http://www.defence.gov.au/whitepaper/Docs/2016-Defence-Integrated-Investment-Program.pdf, 123 pages, and

C.  2016 Defence Industry Policy Statement (PDF 5MB) http://www.defence.gov.au/whitepaper/Docs/2016-Defence-Industry-Policy-Statement.pdf , 79 pages.

WORKPLAN

Today I'll just stick to highlighting/extracting mentions of submarine(s) with some bolding and [Bracketed comments on particularly curious parts]. 

Mid next week I'll comment more broadly on A. though with special mention on naval issues, missiles and jets. Might write on electronic intelligence (if the authorities have spared me still).

Then comment on following weeks on subs, naval, missiles and jets in B. and C. 

Writing an overall assessment of all three documents would be better published in late March 2016.

Between White Paper writing will be the usual writing on subs, missiles and jets from around the world as they hit the news.

Returning to:

A.  2016 Defence White Paper (large PDF of 10 MB), 191 pages: http://www.defence.gov.au/whitepaper/Docs/2016-Defence-White-Paper.pdf

One way to analyse it is keyword search to identify frequency of hits and where they are:

Hit Ctrl + F for keyword search, which yields:

70 references to submarine(s) (of which 13 “anti-submarine” have been excluded). Most submarine(s) are in “Chapter Four: The Future Australian Defence Force” pages 83 to 115. Particularly in the Submarine section, pages 90 to 92.

REFERENCES TO SUBMARINE(S) include:

Page 19
The submarine force will be increased from 6 to 12 regionally superior submarines with a high degree of interoperability with the United States.

Page 21
The Government will ensure that the future submarine project provides a regionally superior [better than China's SSNs?] capability and value-for-money for Australian taxpayers while maximising the involvement of Australian defence industry. The competitive evaluation process, which is underway, will provide a clear pathway for Australian defence industry to maximise its involvement in the project, without compromising capability, cost or the project schedule. More detail on the Government’s shipbuilding plans are set out in Chapter Four

Page 42
2.11 China’s Navy is now the largest in Asia. By 2020 China’s submarine force is likely to grow to more than 70 submarines. China also possesses the largest air force in Asia, and is pursuing advanced fifth-generation fighter aircraft capabilities. China’s military modernisation includes more-capable special forces, aviation and command and control networks and it is also investing in new technologies including space and cyber capabilities.

Page 50
2.41 Within the broader Indo-Pacific region, in the next two decades, half of the world’s submarines will be operating in the region.

On Page 90 begins the key Section “Submarines” including:

4.25 Submarines are an essential part of Australia’s naval capability, providing a strategic advantage in terms of surveillance and protection of our maritime approaches. The Government has determined that regionally superior submarines with a high degree of interoperability with the United States are required to provide Australia with an effective deterrent, including by making a meaningful contribution to anti-submarine warfare operations in our region. The key capabilities of the future submarine will include: anti-submarine warfare; anti-surface warfare; intelligence, surveillance and reconnaissance; and support to special operations.

4.26 The Government will increase the size of the submarine force from six to 12 boats. The doubling in size of the submarine fleet recognises that Australia will face a more challenging maritime environment in the decades ahead. By 2035, around half of the world’s submarines will be operating in the Indo-Pacific region where Australia’s interests are most engaged. Australia has one of the largest maritime domains in the world and we need the capacity to defend and further our interests from the Pacific to the Indian Oceans and from the areas to our north to the Southern Ocean. Submarines are a powerful instrument for deterring conflict and a potent weapon should conflict occur.

Page 91 
4.27 Australia’s new submarines will be supported by upgrades to enablers and facilities such as wharves and port facilities [does this mean extra facilities up north in Broome or Townsville?], as well as simulators, training and submarine rescue systems. The key strategic requirements for the future submarines include a range and endurance similar to the Collins Class submarine, sensor performance and stealth characteristics which are superior to the Collins Class, and upgraded versions of the AN/BYG-1 combat system and Mark 48 MOD 7 heavyweight torpedo jointly developed between the United States and Australia as the preferred combat system and main armament. The new submarines will have advanced communications systems to link with other Navy ships and aircraft to conduct anti-submarine warfare operations.

4.28 The acquisition of the 12 future submarines will commence in 2016 with the first submarines likely to begin entering service in the early 2030s. Construction of the 12 new submarines will extend into the late 2040s to 2050 timeframe. The length of the construction process will mean that Australia will need to be planning the follow-on submarine well before the last new submarine enters service. To ensure no capability gap and the ability to progress development of a replacement submarine in the 2050s, the Government has decided to implement a rolling acquisition program for Australia’s submarine fleet. A rolling acquisition program will ensure that Australia is able to maintain a fleet of 12 regionally superior submarines as submarine and anti-submarine technologies develop over the coming decades. [Note that Japan's building style is more "rolling" with slight upgrades to each sub, rather than European batch building.] 

4.29 During the long life of the new submarines, the rapid rate of technological change and ongoing evolution of Australia’s strategic circumstances will continue. As part of the rolling acquisition program, a review based on strategic circumstances at the time, and developments in submarine technology, will be conducted in the late 2020s to consider whether the configuration of the submarines remains suitable or whether consideration of other specifications should commence.
 [If a "review based on strategic circumstances" means that an increased China threat then demands SSNs, then SSNs may be appropriate].

Page 92
4.30 The future submarine program is the largest defence procurement program in Australia’s history. The Government has already committed to maximising Australian industry involvement in the submarine program, without compromising cost, capability, schedule or risk. The Government will announce the results of a Competitive Evaluation Process in 2016.

4.31 The Government will also continue to make appropriate investments in the existing Collins Class fleet, including priority capability enhancements, obsolescence management and fleet sustainment, to ensure Australia’s potent and agile submarine capability is maintained until the introduction of the future submarine fleet. This will include upgrades to the Collins Class communications and sensor capabilities.

4.32 This investment will build on recent improvements to Collins Class availability. In 2011–12, Collins Class availability was about half that of the international benchmark and in the past there had been up to three submarines undergoing long-term maintenance. Following the 2012 Coles Review and implementation of a comprehensive and innovative transformation plan, there has been a major improvement in the availability of the Collins Class, and Defence is on track to reach the international benchmark for submarine availability by mid-2016. By mid-2016, the submarine HMAS Farncomb will have completed the first two-year full cycle docking in Adelaide – a maintenance activity that formerly took over three years to complete. From then onwards only one Collins Class submarine will be in Adelaide for full cycle docking. Defence will continue to work closely with industry to implement reforms to optimise Collins Class availability, reliability and capability.
[Improving the overhaul-sustainment rate will be good. Having more than 5 Commanders to Captain the subs (+ other hard to keep crew members) would also be good. Thinking 8 Commanders for a rolling 8-9 subs will be important.]

[end of submarine only section]

Page 111
4.108 . Innovation also includes developing new and more efficient ways of maintaining ADF equipment, such as transforming the management of the Collins Class submarines to maximise their availability for operations.

Page 114 
4.118 The Government has already announced 500 dedicated jobs in the new submarine program for combat system integration, design assurance and land-based testing.

4.121 France, Germany and Japan, are participating in the future submarine Competitive Evaluation Process, which will assess their ability to partner with Australia to deliver the future submarines. These potential international partners have been invited to provide options for an overseas, Australian or hybrid build program, and to seek opportunities for Australian defence industry participation in the future submarine Program. A decision on which international partner will be selected will be made in 2016.

Pages 114 and 115
4.122 The Government will also ensure a long-term industrial capability to deliver support to Australia’s submarines in both construction and sustainment. A rolling acquisition program for the submarine fleet means managing the acquisition of submarines to ensure Australia maintains, over the long term, a fleet of 12 regionally superior boats that are fit for purpose in the period in which they will be operating. A rolling program of acquiring submarines will provide long-term planning certainty for Australian industry, allowing those Australian companies involved in the submarine program to invest in the capabilities needed to support their involvement in the construction and sustainment activities.
[Again returning to the very rolling nature of Japanese sub building (from the 1960s to the present). Part of that is due to shorter submarine operational life - maybe up to 22 years, but not the US-European standard of 30 years. In view of this how long subs can last (must they last 30 years?) is a major issue.]

Page 147 
…with further growth [in ADF positions] beyond the decade to operate the larger submarine fleet in particular. The generation of crews with the appropriate mix of skills and experience must be carefully managed to meet the challenging growth needed to operate Navy’s new submarines and surface ships. [Indeed]

Page 171 
7.25 Proper planning for the acquisition of complex equipment and systems takes years of analysis and careful decision-making before acquisitions can commence. This is only proper for the expenditure of billions of dollars involving decades of effort. New submarines and frigates, for example, will be brought into service from the 2020s until well into the 2040s and will operate into the second half of this century.

Page 179 
8.12 As Chapter Four and the Integrated Investment Program accompanying the White Paper highlight, substantial new investment will be required in the first half of the 2020s, including for the acquisition of the future submarines and frigates, which will be major drivers of Defence expenditure. The majority of the additional funding to 2025–26 will be provided from 2019–20 to meet these requirements.


COMMENT

There is much more on submarines in documents B. and C.

Happy to report that Submarine Matters, over the last 18 months, has coincidentally, been very much across these issues raised in Defence White Paper A. 

Pete

February 24, 2016

Possible Japanese Cybersecurity - InfoSec Inadequacies

It appears Japan is still at an early stage of forming a cyber security organisation (probably mainly civilian staffed). 

There may also be resistance from Japan's three armed services (Army, Navy and Air Force) to form a joint signals intelligence (SigInt) and information security (InfoSec) organisation. Such an organisation would be typically staffed by uniformed and civilian personnel.

Submarine Matters suggests if Japan wants to successfully market large, highly sensitive weapon systems it needs to fix these problems.

BACKGROUND

On February 24, 2016 AAP via Australia’s NT News reported :

“Japan its own enemy in cybersecurity

Apart from rogue hackers, criminal organisations or even state-backed cyberwarfare units, Japan's businesses and government agencies are facing a unique cybersecurity foe: themselves.

Even with the frequency and severity of cyberattacks increasing rapidly worldwide, efforts by the world's third-largest economy to improve its data security are being hobbled by a widespread corporate culture that views security breaches as a loss of face. That leads to poor disclosure of incidents or information sharing at critical moments, Japanese experts and government officials say.

[bolded by Submarine Matters] Improving cybersecurity practices has emerged as a top national priority for Japan, stung in recent years by embarrassing leaks at Sony Pictures, the national pension fund and its biggest defence contractor, Mitsubishi Heavy Industries, which possibly suffered the theft of submarine and missile designs...[see whole article].

Earlier on May 30, 2015 Reuters reported:

The United States will extend its cyber defense umbrella over Japan, helping its Asian ally cope with the growing threat of online attacks against military bases and infrastructure…

The Japanese military's cyber defense unit has around 90 members, compared to more than 6,000 people at the Pentagon, a Japanese Defense Ministry official said at a briefing on Thursday.

FURTHER BACKGROUND

Miyuki Matsuzaki, "The Cybersecurity Challenges for the Ministry of Defense and the Self-Defense Forces" indicated February 3, 2016 inc  but the article appeared originally in Japanese in IIPS Quarterly, dated July 17, 2015.

In January of this year (2015), the government of Japan established the Cybersecurity Strategic Headquarters and released a new Cybersecurity Strategy in May [2015]. Through these and other developments, the government is promoting cybersecurity initiatives. At the same time, a plethora of cybersecurity issues have been accumulating,

...In the US, the DHS is in charge of cybersecurity for critical infrastructure. However, it is assumed that, when such infrastructure has been subject to a cyberattack that has resulted in significant damage, it will be a unit from USCYBERCOM that will respond.

…Similarly in Japan, the cabinet's National Center of Incident Readiness and Strategy for Cybersecurity (NISC) and the relevant ministries and agencies are in charge of the cybersecurity of critical infrastructure, while the Cyber Defense Unit --whose mission is to monitor the networks of the Ministry of Defense and the JSDF, and to respond to incidents occurring in them--does not defend the systems and networks used in critical infrastructure or in the defense industry.

AUSTRALIAN CYBERSECURITY, SIGINT-INFOSEC ENVIRONMENT

Cybersecurity Center Level

Cybersecurity centers have a broader mandate mainly at a civilian level. In Canberra, Australia the Australian Cyber Security Centre(ASSC) “is an important Australian Government initiative to ensure that Australian networks are amongst the hardest in the world to compromise."

"The centre brings together existing cyber security capabilities across Defence, theAttorney-General’s Department, Australian Security Intelligence Organisation, Australian Federal Police and Australian Crime Commission” at a single office. “Importantly, it is a hub for greater collaboration and information sharing with the private sector, state and territory governments, academia and international partners to combat the full range of cyber threats.”

"The ACSC is the joint responsibility of the Attorney-General and Minister for Defence. [In part avoid duplication of ASSC and Australian Signals Directorate (ASC) roles]... A Deputy Director of the Australian Signals Directorate, is the centre’s coordinator.

Australian Signals Directorate (ASD) SigInt/InfoSec Level

At a typically higher level of security, due to its part intelligence role, the Australian Signals Directorate has civilian and uniformed staff (drawn from all three armed services).

The Australian Signals Directorate (ASD, formerly DSD) is an intelligence agency in the Australian Government Department of Defence, with its headquarters in Canberra. ... ASD:

-  collects and analyses foreign signals intelligence, known as SigInt
-  provides advice and assistance on information and communications security, known as InfoSec.

SUBMARINE MATTER'S COMMENT

It appears that the Japanese Ministry of Defence has not yet persuaded Japan’s 3 armed services (Army, Navy, Air Force) to form a unified Japanese NSA staffed by civilians and uniformed military. Encouraging all three armed services to combine in such a structure (NSA in US, GCHQ in the UK) was a historical challenge. It may be a present challenge for Japan.

If Japan wins the future submarine competition it appears Australia’s Department of Defence-Australian Signals Directorate and Attorney General’s have much to do in encouraging Japan to fully develop institutions that protect technical-and-strategic secrets. 

Currently it is hoped Japan’s bid documents for the Competitive Evaluation Process (CEP) have been transmitted securely by Japan.

2016 Australian Defence White Paper out tomorrow - Pre-Briefing

Will there be a new building cost diagram tomorrow. The diagram above is courtesy The Daily Telegraph August 20, 2015. Note this is based on Defence Teaming Australia advice in mid August 2015, under the Abbott Government. The Turnbull Government's plans appear to be little different. 
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The Australian Government has indicated that the 2016 Defence White Paper is to be released tomorrow, Thursday, February 25, 2016.

The Government has pre-briefed members of major Australian newspapers including the Australian and Sydney Morning Herald on the White Paper's broad contents.

Today Brendan Nicholson, Defence Editor of the The Australian indicated in part:

...the Royal Australian Navy’s submarine fleet will be ­increased from six to 12, laying to rest fears the long-standing pledge would not be fulfilled.

… It will take 10 years to commission the promised new warships, including nine [Future] frigates and a number of offshore patrol vessels that will be bigger than the existing patrols boats and have more crew members. The two [Canberra Class LHDs] ­already in operation are bigger than the navy’s past aircraft carriers.

… The decision on whether the new submarines will be based on a Japanese, French or German design is not expected until mid-year.

As revealed by The Australian yesterday, the centrepiece of the new defence blueprint will be a multi-billion-dollar plan to expand and modernise the navy and to save the shipbuilding industry...[much more on continuous shipbuilding]

Late yesterday the Sydney Morning Herald reported in part:

The Turnbull Government’s “promises included new planes, an upgrade to the Army's Steyr rifle, new offshore combatant vessels, new frigates, a new grenade launcher, a replacement armoured vehicle fleet and initial work on the new fleet of 12 submarines.

"The [submarine] design work is going to cost a pretty penny," Dr Thomson said."You add to that the Joint Strike Fighter, the P-8 [surveillance aircraft], there's a very sizeable investment budget out there that is going to help them … ramp up towards the 2 per cent."

PETE’S COMMENT

So the 2016 Government announcement is for 12 new submarines.

However previous announcements (for the Oberons and Collins) have led to reduced numbers of submarines over time. We’ll probably only know in 2035 – at the end of the submarine build program how many were built. Two decades is a long time in politics and a need for a batch of SSNs to face China may come along.

It is difficult to assess whether the 12 submarines intention will favour Japan, TKMS or DCNS?

See the subsequent Submarine Matters article which covers the content on Submarines in the White Paper on the actual day of release, February 25 2016.

Pete

February 23, 2016

How much can submarine CEP contenders, like TKMS, say?

Admiring a TKMS-HDW Type 216 (foreground), in the ThyssenKrupp Marine Systems (TKMS) Endeavour program for Australia’s future submarine are: (left) Dieter Rottsieper, Deputy Chairman, Executive Board, TKMS; Vice Admiral Andreas Krause, Chief of the German Navy; and (right) Dr John White, Chairman, TKMS Australia. A Type 212A is behind the 216. (Photo courtesy Australian Defence Business Review).
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ISSUES RAISED BY MHALBLAUB

On February 18, 2016 MHalblaub commented:

"Problems with going public?
We just need to compare in public what RAN can estimate from public available sources.
We might remember that RAN wasn't even capable to look for US weapons used on German submarines.

We can compare the Diesel engines in public because these engines are also available for private use. Hint: there are no fast running Diesel engines designed by Japanese companies. 
We can compare the basics of the air independent propulsion system according to stored energy.
We can compare the differences of weapon systems according to various public sources.
- available weapons or not
- world wide use
- price tag

What also should be on stage is the way Australia will use these submarines because this is a major democratic decision how to use a weapon. From this decision we can conclude what would be the best submarine for Australia. 

Well, why not a public vote?
- 8 Soryus/DCMS/TKMS with US combat system.
- 12 Soryus/DCMS/TKMS with inherited system
- 24 Type 210mod

All for more or less the same price.

Anybody who thinks that THE PEOPLE do not have enough insight should explain why a few people with more insight did built Collins-class.

THE Australian PEOPLE will pay it not the few who think to be smarter than the rest."

PETE’S RESPONSE

What I think is. The contenders can and have been broadly discussing overtly known advantages of their submarines, but contenders cannot be specific about their actual bids sent to the Australian CEP assessors. Commercial sensitivity is usually a consideration and actual bids are highly sensitive for Australian on national security grounds.

The Australian Government currently cannot advertise the strengths of a particular contender's submarine at least until one contender is chosen. This may be in the context of justifying the selection to the Australian public.

Put another way - public discussion on the future submarine selection process can be informed by the Australian Government in different ways at different times in the selection process. As Julie Bishop said last week the Government cannot pre-empt the CEP selection process (and Julie is diplomatic).

Maybe TKMS has the best diesel in the MTU 4000 http://www.rina.org.uk/Series_4000_to_form_basis_of_new_submarine_diesel.html. MTU can advertise that likelihood itself, not the Australian Federal Government. TKMS cannot be specific on what precise diesel model (or exact future model with future performance numbers). 

For example would we want China to know the likely sound signature of Australian future submarine diesels 10 years before our future submarine goes to sea? Also TKMS may want to market a roughly similar diesel for Chinese naval ship (and maybe Yuan?) submarine use.

Australia may want to keep its option open on whether to use AIP, so the Government won't sell the fact TKMS has the most developed known AIP. France may also be working on advanced AIP but the maturity or years until operational service is not known. Meanwhile Japan is not including AIP in its future Soryu but instead plans to use LIBs of, as yet, publically unknown performance. 

Saying Australia wants the most efficient LIBs may benefit Japan’s bid. But DCNS or TKMS may have as good as or better LIBs on the way (a very Commercial-in-Confidence issue).

(Courtesy artwork by Cathy Wilcox via SMH, February 25 2016)
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Regarding holding democratic-public opinion surveys or votes on complex weapon systems. No country does that or has ever done that (to my knowledge). Did Sweden advertise to its public that it was doing "cold" testing of nuclear bombs or let its public decide? 

Also governments are paid to wade through complex issues and make a decision. Would TKMS accept votes all over the EU that no new submarines should be built in the EU? Would the Australian Government accept votes for no new subs at all?

On the TKMS Type 210mod - it does not have:

-  the unrefueled range (from Fleet Base West) for long missions like South China Sea, 
-  sufficient crew to endure a 60+ day mission,
-  weapon shots carrying capacity, and
-  ability to accommodate the (already mandated) AN/BYG-1 combat system.

Australia has difficulty mustering 5 Commanders for the 6 Collins. So 24 Commanders for 24 Type 210mods is not possible.

An example of what a contender says and can say is TKMS and Australia state government level body (Defence SA) body visiting Whyalla in February 2016. There was fairly vague talk about upgrading the South Australian defence business skills as they relate to manufacturing portions of submarines, militay vehicles, frigates and offshore patrol vessels. TKMS could have been more specific about German frigates and OPV models available but it is not the time or place. There was also mention of Whyalla's likely inability to produce submarine hull steel.

In January 2015 Japan was more forthcoming on steel - perhaps Wollongong may be capable - but Japan may not intend to make NS110 steel in Australia. 

The Federal Government is necessarily constrained by process including the commercial, political and security sensitivities behind process.


Of course the taxpayer pays, but think of all those jobs in South Australia and other states.

Pete

February 22, 2016

If Japan wins future submarine competition - Role of Japanese Board of Audit?

[Pete's introduction] In Japan’s pricing of its submarines for the purposes of Australia’s future submarine Competitive Evaluation Process (CEP) an Australian understanding of Japanese audit procedures, assumptions and thinking is important. Part of the reason is that Japan is new to the business of arms selling on a large scale so it would be still fully developing accounting procedures to justify the pricing to prospective major customers (beginning with Australia).

It is unclear whether the Japanese Board of Audit's powers and responsibilities over submarines sold domestically to the Japanese Navy are the same as for large foreign sales (starting with Australia). Overarching political justification for arms sales includes Japan's:




Pete is reliant on the greater knowledge of Australian Department of Defence and Department of Finance financial analysts and accountants to understand the importance or significance of the following:

BACKGROUND ON JAPAN'S BOARD OF AUDIT

In Comments of mid February 2016 S indicates "In Japan, the predetermined price of procurement goods is calculated based on the law, i.e., “Instruction on calculation standards of predetermined price of procurement goods” and the Board of Audit strictly checks its adequacy on regular basis.

[Pete’s Note: Japan’s domestic procurement audit, formulas, standards and laws have evolved over more than a century. Japan’s Board of Audit was established in 1880 The Board of Audit is a “constitutionally independent organization to audit the final accounts of the State, accounts of government affiliated institutions and independent administrative agencies, and those of bodies which receive financial assistance from the State such as State subsidies.” So the Board’s oversight extends much further than Japan’s Ministry of Defense (JMoD) or Japan's Ministry of Finance (MoF).

The Board of Audit's oversight may cover JMoD while JMoD is bidding alongside MHI and KHI in the future submarine contest. As reported in the Fairfax media in early February 2016 the Australian Government CEP assessors had asked for information from the Japanese bidders in “a different form” as there was a "government-to-government arrangement as opposed to a commercial arrangement".

INFORMATION PROVIDED BY "S"

In Comments of mid February 2016 "Sis introducing calculation item and its definition & scope in this law. The predetermined price is summation of calculated values of following items ((1)-(10)). Calculation is conducted according to specific "equations" [items].

(1) Direct material cost (material/raw material cost, parts cost)
(2) Direct labor cost (wages including overtime pay, allowance)
(3) Direct cost (design cost, inspection cost, specialized jig & tool cos,
 machinery & equipment cost, construction cost, experimental research cost, development cost, technical collaboration fee, royalty usage fee, various expense)
(4) Manufacturing overhead ([1] is indirect material cost [2] is indirect labor cost [3] is indirect cost)
(5) General administrative and selling expenses (all of the costs incurred in common with respect to management of the entire business and sale of goods [4] )
(6) Selling direct expenses
(7) Interest (cost of capital necessary for the accomplishment of manufacturing & selling of procurement goods and benefits of the contract)
(8) Profit (reward for the accomplishment of manufacturing & selling of procurement goods and benefits of the contract, and expense profit of compensation for the risk bearing)
(9) Packing cost
(10) Transportation cost

[1]
(a) Expense of consumable tool, equipment, fixtures and equipment expenses,
(b) auxiliary management material costs (such as fuel for the power),
(c) factory supplies cost (such cost of chemicals and nails), and
(d) office supplies cost

[2]
(a) Indirect wage (wage for indirect workers, wage for indirect works of direct workers),
(b) wage for waiting time wage,
(c) salary (salary for supervisor), and
(d) indirect allowance (allowance except that in direct labor cost)

[3]
(a) Ancillary labor expenses, (b) retirement benefit expenses, (c) depreciation cost, (d) real estate rent, (e) movable estate rent, (f) insurance fee, (g) taxes & dues, (h) repair fee, (i) electric rate, (j) gas rate, (k) water rate, (l) transport cost (except delivery cost of goods) , (m) storage fee, (n) travel expense, (o) communications expense, (p) meeting expense, (q) stock losses & shrinkage (r) processing fees for subcontract, (s) petty expenses.

[4]
(a) Directors’ salaries & allowances, (b) employees’ salaries & allowances, (c) welfare expense, (d) retirement benefit expense, (e) office supplies cost, (f) depreciation cost, (g) real estate rent, (h) movable estate rent, (i) insurance fee, (j) taxes &d dues, (k) repair fee, (l) utilities, (m) transport cost (except delivery cost of goods), (n) storage fee, (o) travel expense, (p) communications expense, (q) meeting expense, (r) advertising expense, (s) sales commission, (t) research and development expense, (u) petty expense.

The Board of Audit has strong authority and can request correction against unjust or violation of related laws & regulations, and also request improvement from view point of laws & regulations, institution and administration."


PETE'S QUESTIONS

The Japanese entity wishing to sell to Australia is an unusual hybrid of a government Ministry of Defense (JMoD) and two companies (MHI and KHI). This is instead of the usual single company selling (eg. TKMS and DCNS).

How the Japanese Board of Audit will handle/is handling the submarine pricing and potential sales process is a mystery (to me). For example:

1. If MHI is the official seller to Australian won't this downgrade the Board of Audit's power and responsibility?

2. What will be JMoD's status in the procurement of parts for an Australian submarine?

3. Will the JMoD act as if it is buying submarine parts from MHI or KHI? 
(Then those parts will be assembled into a submarine in Adelaide.)

4. What will happen if the Japanese Board of Audit finds any irregularities in the Japanese bid for the future Australian submarine or JMoD's involvement in the bid?

S's RESPONSE TO THE QUESTIONS ABOVE

S's response was made in Comments of February 23, 2016.


Questions 1, 2 and 3

"These depend on the contract on submarine building. Judging from role of the Board of Audit (BoD) [1], the depth and scope of audit depend on the contract which is very unclear in the current tender status."

Question 4

Answer [Board of Audit] will fulfill its responsibilities.

[1] http://www.jbaudit.go.jp/english/index.html , Home page of the Board of Audit of Japan
“As a constitutional organization that is independent of the Cabinet and belongs neither to the Diet nor to the Courts, the Board of Audit (hereinafter referred to as 'the Board') audits the State accounts as well as those of public organizations and other bodies as provided by law, and also supervises public accounting to ensure its adequacy.

S and Pete

February 19, 2016

Advantages of Vertical Launch Systems (VLS) for Ships.


Standard SM-6 missiles vertically launched. Serious flames - Made in the USA.
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Russia has developed coffin launchers for many ship sizes over many decades. But Russia has now succumbed to superior Western vertical launch technology. Russian and Chinese reverse engineering being the highest form of flattery.

For example here are some of Russia's old coffin launchers in action on small early model Molniya class corvettes https://youtu.be/8UAPGBcPY80?t=2m44s (missile demo ends at 3 minutes). 

Russian coffin launched missiles appear semi-aimed. They are fired with considerable momentum. This may involve the whole ship turning in the direction of the target or a lot of fuel expenditure for the missile to alter course. Either stacking the coffins or loading them with missiles in port may be a difficult business.

For some of those reasons Russia is increasingly turning to vertical launch systems - like the West (mainly US) has used since the 1980s. 
Russia's October 2015 Caspian Sea vertical launching of 26 Kalibr cruise missiles - even from small later model Buyan class corvettes
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Not only the missiles can be rearranged but the Mark 41 system allows whole modules to be chopped and changed. (Diagram courtesy http://www.tpub.com/gunners/184.htm)
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The advantages of VLS include:

1.  It allows ships to load (in port) a selection of missile types tailored for possible missions. So 96 Mk 41 VLS cells on an Arleigh Burke class destroyer that is planning land attack cruise missiling of ISIS in Syria/Iraq, could be armed with (say):

-  70 Tomahawks (land attack),
-  10 ASROCs (anti-sub) and
-  16 SAM.
 Harpoon ASMs have their own diagonal launchers.

2. It is cheaper and easier to alter VLS modules and cells for new missile systems.

3.  Vertical modules can be more tightly packed (better using limited deck space than diagonal coffin launchers).

4. Fewer moving parts to go wrong

5. Greater safety and more balanced-aerodynamic launch as the missile flies straight up long enough to clear the cell and the ship, and then turns on course. Calm seas and low wind speeds help.

6. Not as vulnerable as coffins to blowing/falling over in rough seas or windy conditions.

The US has had ship VLS for decades and now Russia and China are adopting VLS in ever smaller ship types.

Here's a toe-tapping, missile-including piece of Russian techno-porn - just for fun.
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Have a good weekend.

Pete

February 18, 2016

Submarine Implications of Woody and the 3 Reef bases

Woody Island (featured in the previous article) is another naval base and stationary "aircraft carrier" for China in the South China Sea. This is in addition to Subi, Mischief and Fiery Cross Reefs (the "3 Reefs") acting as Chinese "carrier" naval/air bases in an even more contested area. See those 3 Reefs on the second map below. 

Woody and the 3 Reefs are in the Paracel and Spratly island groups respectively - all in the South China Sea.



Chinese military aircraft, ships and submarines from China's Hainan Island can extend their range replenishing at the growing air/naval bases on Woody and the 3 Reefs (above and below) or they can be permanently based there.


Add caption

SUBMARINE IMPLICATIONS

Chinese aircraft can use this growing island network to criss-cross the sea in search of Western (including Australian) submarines. See Submarine Matters September 2015 article on the 3 Reefs.

Woody Island defends the approaches to China's much more important Yulin/Sanya naval base (in part a nuclear submarine base) on China's large Hainan Island. Woody also defends other Chinese naval bases and trade routes. Woody is well placed for launching strike aircraft and land attack missiles against air/naval bases on Vietnam's coast.

It is likely that China's active SSBNs consist of 4 Jin class, Type 094 submarines (4 more being built). Unlike the US, UK and France, which have a technological and development time lead in quiet SSBNs, Chinese SSBNs are believed to be significantly noisier. This means China relies on creating a safe bastion to defend its growing SSBN, SSN and SSK forces. Without this "bastion" China's SSBNs cannot amount to a credible second strike capability because they would be destroyed too quickly (particularly by the US SSNs operating out of Guam).

A principal role of China's SSNs and SSKs is defending its SSBNs from Western (US) SSNs and (Japanese, Australian, South Korean and perhaps Singaporean) SSKs.

The bastion defences are in the form of:

-  long range DF-21D anti-shipping/anti-submarine missiles based on the Chinese mainland and maybe Hainan.

-  Hainan, Woody and 3 Reefs based MPAs, helicopters and ASW warships

-  Large Chinese ASW UAVs (eg. "Divine Eagles") are also being developed which will be launched from the island/reefs.

-  For ASW and anti-shipping China can also string its undersea SeaWeb (SOSUS just part of it) networks between the island/reefs and the Chinese mainland. These networks can be laced with seabed or tethered mines, which can be remote-armed against Western shipping and subs during times of crisis.

China's conventional diesel-electric submarines (SSKs) only have limited range and endurance. Woody Island and the 3 Reefs provide much needed friendly-to-China bases where the SSKs can refuel and replenish other supplies (including specialised AIP chemicals for the Yuan class SSKs).

China's increasing militarisation of the Paracels (including Woody) means that Australia needs submarines of increasingly longer range. Australia's future subs need to be able to operate from Fleet Base West (south of Perth) - quickly transit to-from (more than 6,000 kms total) and actually remain on station for around 4 weeks unrefueled.

Chinese satellites and long loitering UAVs will soon mean that Australian submarines cannot transit/operate surfaced at any stage. Operating the diesels while running across Chinese SeaWeb networks will also become dangerous. Lithium-ion batteries and AIP may become essential - on the way to nuclear propulsion (within the next 25 years).

Pete

February 17, 2016

Chinese SAM missiles on Woody island beach, Not A Game Changer

In mid February 2016, a satellite image (at "A." below was publicised which revealed Chinese surface-to-air (SAM) missiles on Woody Island, in the disputed Paracel Island group, in the South China Sea. The SAMs are apparently HQ-9 surface-to-air (SAMs) (exact variant unknown) with a published range of about 125 miles (200 kms) but probably less. 

These missiles, which may be only on Woody temporarily, only augment several J-11 interceptor aircraft that have been based at Woody's airport for months and Chinese warships (armed with SAMs) which have plied the Paracels for years.


A. The satellite image "A." of the HQ-9 missiles in question (above). They may be on the north of Woody Island near the anti-aircraft-artillery "AAA" site marked on the satellite view "B." (below). 

These missiles and radars are sitting on trucks on a Woody Island beach. This would only be a temporary siting due to the wear-and-tear of sand, sun and salt on the missile casings, trucks and delicate radars. This may suggest that these missiles have been revealed by China, Taiwan and the US for political reasons coinciding with Obama's-ASEAN Sunnyland's meeting (mid Feb 2016) and to a far lesser extent Australian Foreign Minister Julie Bishop’s visit to Beijing



B. Woody Island South China Sea. China calls it Yongxing Island. (This satellite image courtesy Digital Globe via defencetalk(dot)net)
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Woody Island towards top. Chinese miltary aircraft from China's Hainan Island can land at the growing air base on Woody Island.
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Freedom of Navigation Operattions (FONOPs) overflights of militarised Chinese South China Sea islands by US (P-8s, P-3s, B-52s) and Australian (P-3s) will become more tense.

However there has been a threat a threat to overflights for a long time from Chinese air warfare capable destroyers (with long range HHQ-9A SAMs) and frigates  (with HQ-7 SAMs).

A newer threat to overflights has come from late model Chinese Shenyang J-11 BH/BHS fighters based at Woody Island since November 2015. The J-11s carry air-to-air missiles that could shoot down overflying aircraft. The missiles, like the J-11 jets might only be rotated through Woody Island during times politically advantageous to China and just before FONOPs overflights. Still, even temporary threats from these anti-aircraft weapons constitute a threat. Mistakes can be made. Near misses and collisions, particularly from J-11 jets, can occur.

Woody Island already sits in a highly congested strategic area bristling with weapons. So a staged show of missiles on a beach is only an additional threat, not a game changer.

Pete