Abbott's "Open Tender" Future Submarine Call Doesn't Go Far Enough

Prime Minister Abbott seems to be the main advocate for "Buy Soryu and Built it in Japan" however his hold on the position of Prime Minister (PM) is still threatened. Yesterday (February 8, 2015) PM Abbott appeared to say that the future submarine issue should go to open tender.  But Abbott was not definite in stating what he meant. He did not say "Build the submarines in Adelaide". It was unclear whether the government owned Australian Submarine Corporations (ASC) would be ordered to ally itself with the Japanese Soryu (KHI and MHI) "bid". It remains likely the Soryus would mostly be built in Japan but as is already anticipated the US-Australian developed combat system might be mostly fitted in Adelaide by ASC.
- The extract in that article "It is understood that France, Germany, Sweden and Japan were to be named in a selective tender process that would allow Australia to solicit bids from other governments, rather than just corporations."  is ambiguous. It may be aimed at the US Government providing the combat system. It may also suggest there will be much weight given in choosing the winning "bid" on what bidding governments have to offer. This would favor Japan in the context of the Japan-Australia free trade agreement . The Japan-Australia strategic alliance issue I wrote about in my previous article would also favor Japan. The other contenders (Germany, France, Sweden) do not bring such economic and strategic benefits to the table.

On February 8, rather than making a serious effort to plan the future submarine build Abbott appeared to be just securing votes from Federal Liberal Party politicians from South Australia to support him in a No-confidence meeting on February 9, 2015.

Although Abbott won enough votes (at the 9am February 9, 2015 meeting in Canberra) from his Liberal Party to stay PM Abbott's survival as PM remains unresolved. This is because there was a split vote, 61 votes he should stay on and a substantial minority of 39 votes that he should stand down. This reflects continuing unhappiness at Abbott's non-consultative leadership style. More no-confidence votes are likely in the months to come.

Now that the immediatte threat to Abbott's PM job is over continuing submarine discontent of politicians in Adelaide is being heard. This more recent article (February 9, 2015) from Australia's ABC indicates: The South Australia State Defence Minister, Martin Hamilton-Smith, believes the newly promised shift to an open tender process for future submarines falls short of the Federal Government's promise that ASC would build the submarines in Adelaide. He believed the open tender process could still result in the ships being built overseas. So he believes that Build 12 submarines in Adelaide should be a definite condition of the tender.

- Independent Federal Senator Nick Xenophon said he was also deeply sceptical about Mr Abbott's new promise for an open tender process. Mr Xenophon said the PM should have announced that the tender process would lead to the subs being built in Australia.

- Federal Defence Minister Kevin Andrews urges caution and patience

Overall Abbott needs to be more explicit that he now supports a truly open tender with most of the build in Adelaide - not a rigged tender that favors a build in Japan. If Abbott remains vague, without Prime Ministerial OR Defence Ministerial Media Releases, Abbott may easily renege-backtrack as his 2014 broken promise of "Build in South Australia". 

In terms of what submarines should be built I think the cost of a totally new or heavily modified 3,000-4,000 ton (surfaced) submarines would be too expensive and involve overly long lead-times. Also since the end of Australia's mining boom, 2 years ago, Australia doesn't have the $20-$25 Billions for 10 to 12 large, possibly orphan, subs. More money towards other voter-popular causes (health, education, welfare) would keep Abbott in his job as PM and the Coalition in power.

Large, heavily modified submarines, built in Australia or overseas, are such a tough choice I think Abbott would describe it as a lose-lose decision. 

If I had my way I'd just buy 6 medium size (Scorpene, HDW 214, Dolphin 2, or Kockums A26) from France, Germany or Sweden for $5 Billion TOTAL price (ie. just over A$800 million per submarine).

Odds on Abbott makes no major decision till 2017 - that is AFTER the next election. - even if the US is applying pressure. Regarding US pressure, note this timely scholarly comment of MIT’s Jonathan D. Caverley “The thumb on the scales that has Australia leaning towards Japan for its submarines has an American fingerprint.” (page 19 of Running Faster to Stay in Place: U.S. Defence Exports in 2030 within RSIS’s  http://www.rsis.edu.sg/rsis-publication/idss/the-global-arms-industry-in-2030-and-beyond/#.VNhLU_mUen8 )

Pete