The misadventures of AUKUS robot AlboGov never cease. I publish on subs, other naval,
nuclear weapons & broad political issues. Aussie sub changes are glacial: talk rather than actual new subs. The 1st Collins LOTE may secretly concern the US Combat System & be ready 2029. Trump may decide to cancel the AUKUS Virginia offer due to USN advice it needs all operational SSNs right through to the 2040s. My colleagues Shawn C and Gessler are excellent writers. Pete.
November 26, 2022
AUKUS SSNs "could cost A$10 Billion each"
In an exclusive Andrew Tillett
for the Australian Financial Review (AFR), on November 25, 2022, reports a whole range of new (possible) issues titled:
“Warning that nuclear
submarines could cost $10b each”
That is around USD 6.7 billion per boat assuming a VPM fitted newer version is given. The US navy is paying USD 3.5 billion for the 10th boat in the class I think. In a nuke naval infra lacking Oz, The turn out cost if inclusive of initial few years running cost could be 2x delivered price and hence is logical, at least to me. The more the delay we should expect turn out cost to rise more.
"Interview with Vice Admiral Arie Jan de Waard, Director of the Dutch Defense Materiel Organization (DMO) on three major naval program for the Royal Netherlands Navy: Walrus class submarine replacement program, Anti-Submarine Warfare Frigate (ASWF) and rMCM."
The price..does it include the research and infrastructure building, or just the boat alone? I think Aust tends to include everything, so it's prices are always higher than overseas.
In any case, I don't think anyone is truly surprised at such numbers for the building of an entire industry- people, education, training, infrastructure etc.
I mean, how much did it take to develop the car industry in Adelaide? How much does it cost to refurbish and modernise the Ford/Holden/Toyota car lants? hat wasn't cheap either, and they make products which are only $20,000, and 98 metres shorter, and far, far simpler.
Yes, the RAN preferred to include the high all up costs (building, spares, training, upgrades and operations, inflation(?)) for the Attack-class SSKs. So the RAN couldn't be, years down the track, accused of understating.
From reading https://www.afr.com/politics/federal/warning-that-nuclear-submarines-could-cost-10b-each-20221124-p5c148 it looks like equivalent to $A10 Billion build cost only in todays A$s for a US SSN(X). - This is where the SSN(X) may strongly influence a AUKUS SSN Common US/UK design - which Australia will have to accept. - This is NOT factoring in inflation out to 2050.
I prefer to use the RAN's all inclusive Attack-class formula including higher inflation than envisaged in Attack-class days.
So 8 X $A10 Billion + spares + training + operations + upgrades + maintenance + new East Coast SSN Base Out to 2050, with maybe inflation of 5%-10%/year considering the main builders (US and/or UK) are suffering higher inflation than Australia.
All totalling around A$500 Billion in 2050 A$s.
Australia will need a much higher Defence Budget, up from 2% of GDP to at least 3%, to cover these Aus SSN costs.
Hi Pete,
ReplyDeleteAt last the TKMS did comment on their offer to the Netherlands
https://youtu.be/91OaZFdprTY
/Kjell
That is around USD 6.7 billion per boat assuming a VPM fitted newer version is given. The US navy is paying USD 3.5 billion for the 10th boat in the class I think. In a nuke naval infra lacking Oz, The turn out cost if inclusive of initial few years running cost could be 2x delivered price and hence is logical, at least to me. The more the delay we should expect turn out cost to rise more.
ReplyDeleteHi Pete,
ReplyDeleteSome more info about the Walrus replacement.
"Interview with Vice Admiral Arie Jan de Waard, Director of the Dutch Defense Materiel Organization (DMO) on three major naval program for the Royal Netherlands Navy: Walrus class submarine replacement program, Anti-Submarine Warfare Frigate (ASWF) and rMCM."
https://youtu.be/vj_oFLqsfww
/Kjell
Hi Pete,
ReplyDeleteSome even more info about the Walrus replacement.
Saab Damen
https://youtu.be/oaRwYfxRpJA
Naval Group
https://youtu.be/B3Agdn7_CJA
/Kjell
Hi Pete, Hi @Anonymous
ReplyDeleteseen the NavalNews vid. on YT, the french offer to Netherland looks like the Attack Class...
The price..does it include the research and infrastructure building, or just the boat alone? I think Aust tends to include everything, so it's prices are always higher than overseas.
ReplyDeleteIn any case, I don't think anyone is truly surprised at such numbers for the building of an entire industry- people, education, training, infrastructure etc.
I mean, how much did it take to develop the car industry in Adelaide? How much does it cost to refurbish and modernise the Ford/Holden/Toyota car lants? hat wasn't cheap either, and they make products which are only $20,000, and 98 metres shorter, and far, far simpler.
Just my 2 cents.
Andrew
Hi GhalibKabir and Andrew
ReplyDeleteYes, the RAN preferred to include the high all up costs (building, spares, training, upgrades and operations, inflation(?)) for the Attack-class SSKs. So the RAN couldn't be, years down the track, accused of understating.
From reading https://www.afr.com/politics/federal/warning-that-nuclear-submarines-could-cost-10b-each-20221124-p5c148 it looks like equivalent to $A10 Billion build cost only in todays A$s for a US SSN(X).
- This is where the SSN(X) may strongly influence a AUKUS SSN Common US/UK design - which Australia will have to accept.
- This is NOT factoring in inflation out to 2050.
I prefer to use the RAN's all inclusive Attack-class formula including higher inflation than envisaged in Attack-class days.
So 8 X $A10 Billion + spares + training + operations + upgrades + maintenance + new East Coast SSN Base Out to 2050, with maybe inflation of 5%-10%/year considering the main builders (US and/or UK) are suffering higher inflation than Australia.
All totalling around A$500 Billion in 2050 A$s.
Australia will need a much higher Defence Budget, up from 2% of GDP to at least 3%, to cover these Aus SSN costs.
Cheers Pete
Hi /Kjell thanks for your 3 RFQ posts
ReplyDeleteand Anonymous @Nov 27, 2022, 7:03:00 PM
I've turned all your posts into "Future Dutch Submarines RFQ Issued."
of November 28, 2022 at https://gentleseas.blogspot.com/2022/11/future-dutch-submarines-rfq-issued.html
Regards Pete