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

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

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

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

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

The sensibilities of the Japanese public and Chinese government pressures must also be considered in any Australian-Japan submarine deal. Japan has a strong public peace movement which can be highly antagonistic towards Japan’s military alliances (particularly concerning US bases). Significant numbers of the Japanese public might also see a Japanese-Australian submarine export deal as a security relationship that should be opposed. China, fearing a remilitarised Japan, may also exert political and economic pressure on Australia and on Japan (including the Soryu’s principal builders Kawasaki and Mitsubishi) to break up a submarine based security relationship. It must be remembered that the Quadrilateral Security Dialogue (Australia, Japan, the US, India) proposed by Prime Minister Abe in 2007 collapsed in 2008 when Australia pulled out of it due to Chinese pressure http://en.wikipedia.org/wiki/Quadrilateral_Security_Dialogue#Rudd.E2.80.99s_departure .

If the Australian Government insists a future submarine be built locally it is prudent for Australia to move slowly in its decision making. Australia simply doesn’t have the money, won’t have it for years and there are too many uncertainties over the Japan card.

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

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

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

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

Pete