September 28, 2018

Impasse Between France and Australia on Huge Submarine Project

Andrew Greene, Defence Reporter for Australian Government owned ABC News, has written the following excellent article, dated September 29, 2018:

“Future submarine project deadlocked as French shipbuilder digs in on $50 billion contract

The Government has grown so frustrated with the French company selected to build Australia's next fleet of submarines that Defence Minister Christopher Pyne refused to meet top officials visiting the country this week.

Naval Group was selected in 2016 to build 12 submarines for the Australian Navy, in the country's largest-ever defence contract worth $50 billion. [see website]

The ABC understands Mr Pyne will only meet the chief executive of the majority French state-owned company once a crucial document, the strategic partnering agreement (SPA), has been signed.

Negotiations on that document have stalled and it is feared they may not be resolved before next year's [Australian] federal election.

Defence and industry figures have told the ABC that France and Australia will not be ready before 2019 to sign the document, which is needed before detailed design contracts can be finalised, and submarine construction begins.

Sources familiar with the process say a goal to sign the vital SPA during a visit to Adelaide this week by French Minister Florence Parly has slipped off course, with fundamental differences that may not be reconciled before early next year.

Concerns over warranties and technology transfer are believed to be the main sticking points in the tough negotiations between the Australian Commonwealth and French-owned Naval Group.

The knock-on effects of delay on the SPA, which covers the guiding terms and conditions that govern the submarine program, and the likelihood of a federal election being called in the first quarter of next year threatens to create a "perfect storm" of uncertainty, with some risk that it could ultimately sink the French project entirely.

Ms Parly was accompanied to Australia this week by Naval Group chief executive Herve Guillou and project boss Jean-Michel Billig, but scheduled meetings between the two company representatives and Mr Pyne and Defence Industry Minister Steven Ciobo were cancelled.

Naval Group has declined to say whether it is disappointed that Mr Pyne refused to meet them, but has conceded the negotiations with Australia are "challenging" and "complex"...”



Autumn Leaf said...

I wonder if it is too late to pull the plug with the French and go with TKMS Type 26 instead. Doing military business with the French have always ended with non-stop issues, from the days of the Mirage 3, to the more recent Tiger ARH and Taipan MRH-90. I reckon the Germans are more reliable, with recent success with Rheinmetall as example.

Pete said...

Hi Autumn Leaf

I think there would be $multi-billion penalty clauses if Australia tried to pull out. Also Australia would lose the possible future options of:

1. buying a second nuclear powered batch of Barracudas. AND

2. France (and/or Israel) may be the most likely nuclear weapons powers to quietly supply nuclear weapons technology to Australia. See South Africa "The possibility of South Africa collaborating with France[5] and Israel in the development of nuclear weapons was the subject of speculation during the 1970s.[6]"



Anonymous said...

Dear Autumn Leaf,
It is quite puzzling to use the Tiger as an argument to prefer the German over the French, given that the Tiger is a French-German helicopter.
The same goes with the NH90, which is a European thingy.
In any way, asking for massive transfer of technology, final assembly AND warranties on the performance of the resulting system will always be tricky. Believing that everything would be just fine and easy with the German (or the Japanese, for that matter) would be mildly optimistic.

John Weyne said...

Germans havent ever built ocean-going boats. Trying to make a conventinal boat of a nuclear is a risky (thus costly) and indeed the French are the French. Despite all shortcomings (leasons learned) with the Collins, buiding an improved version of that, might prove much more effective

PUNTER said...

here another Andrew Greene article.

ABC interview with Japanese Foreign Minister Taro Kono

In his only interview following talks with Foreign Minister Marise Payne and Defence Minister Christopher Pyne, Mr Kono said Tokyo would be willing to step in if Australia decided to look at other options for the replacement of the ageing Collins Class fleet.

"That's possible – but it's up to the Australian government to decide," Mr Kono said.

Mr Kono stressed he did not know how long it would take Japan to prepare another offering if Australia were to again approach his government.

"Well I have to check with (the) Defence Ministry and related industry," he said.


Anonymous said...

Hi Pete

Few hours before, Minister of Foreign Affair, Mr Kono told Japan did not give up hope [1]. But, I can not agree with him, because Australia Federal Police did not report on secret leakage of CEP at all. AFP should remember its job.

“Japan offers to help build Australia's future submarine fleet if French deal falls through”


Pete said...

Hi PUNTER and Anonymous

Thanks for

Both the Australian Coalition Government and Naval Group may be nervous about signing a partnering agreement before the end of 2018 because the Australian Coalition Government that chose Naval Group is likely to be beaten in the Federal Election which must be held by May 18, 2019 [1].

Australia choosing the Soryu may be a good idea because the Soryu is already a very large submarine of the the size Australia needs and because of Japan's lead in LIB technology for submarine. In contrast a conventional Barracuda and TKMS 216 are mainly concept submarines making them riskier builds for Australia.

Also the alliance value of Pacific power Japan is more useful than the value of mainly West European powers France and Germany.




Anonymous said...

Hi Pete

One of the key issues is pump-jet propulsion. Physician Aidan Morrison pointed out low efficiency of pump-jet propulsion based on calculation ( and his opinion consists with general opinion of submarine experts, except Naval Group and RAN.

In its response, Defence said pump jets were not common on small diesel–electric submarines as they were heavier than conventional propellers and therefore not compatible with the weight balance of these smaller vessels. “However, as the size of the submarine increases, a pump jet can be accommodated, bringing its attendant advantages over conventional propellers,” it said. (

But, Soryu with conventional propeller is one of the biggest submarines. In fact, ex-commander of submarine fleet, Kobayashi told that pump-jet propulsion was low efficiency at low speed and suggested that choice of RAN was wrong. If pump-jet is not suitabe for conventional submarine, Australia government might cancel without paying penalty the contract, because pump-jet is key of French proposal.


Anonymous said...

Hi Pete

Recently, the ex-commander of JMSDF submarine fleet, Masao Kobayashi reviewed history and present status of Austarilan submarine (Ship of World, Dec/2018). I will introduce a part of his review as follows.

In Australia, submarine issues are curently disicussed not from a view point of military affairs, but of employment and industry. There are three issues related to future Australian submarine: pmp-jet system of Shortfin, crews, and maintaince of submarine technogy.

Pump-jet system is efficient at high speed range, but, is not efficient at low speed range where most of operation is conducted by convensional submarine. Explanation by RAN on criticism against pump-jet efficiency is difficult to believe. Eventually, conventional propeller will be adopted for Shortfin causing huge arguement.

Enough crews are not ensured for submarine fleet. Though shortage of captains is reported, training plan of captain is unclear.

To maintain technology, submarine should be continuously built. If a Shortfin is annually built for 12 years and building and commission periods are 6 and 28 years, respectively, then, the blank period between last Shortfin building and first post-Shortfin building is 10 years. Technical tradition on submarine is interrupted in this period. In the case of 8 Shortfins, the blank period is 14 years. To aboid the interruption of technical tradiction, export of submarine is considered in the case of the small submarine. But, Shortfin is too big to export, and possible export destination is Canada. As Australia is an ally of Japan, hope her success.

The ex-commander pointed out TKMS had offered fake data table on Japanese submarine to Australian journalism. On the other hand, he defended anger of TKMS when RAN pointed out noisiness of TYPE216. He said that criticism against TKMS by RAN was too rough and that in the stage of pre-presentation, such a criticism was wrong.