"Open tender" versus "Competitive evaluation process" makes little difference

The removal of "open tender", promised by Prime Minister Abbott on February 8-9, 2015, and its replacement on February 10, 2015 with "competitive evaluation proces" underlines that Australia's selection of a future submarine:

- involves political considerations at the level of Prime Minister that are paramount

- therefore decisions are being made at the level of Prime Minister, his subordinate Prime Minister's Office and his subordinate Department of Prime Minister & Cabinet. These (mostly) men have already drawn advice from many Departments including Defence

- put another way the hundreds of technical considerations that would have been considered important in a tender are less important or have already been decided on

- there is no room left for submarine experts in the Navy, DMO or broader Defence Department to imagine that the now obsolete term "tender" could contradict the decision of the Prime Minister

- the Prime Minister level decision probably has been made with Japanese Prime Minister Abe - that Australia will buy the Soryu. Abbott probably made a Captain's Pick of the Soryu

- the Soryu decision is made for political, economic and strategic reasons. Those reasons include:

  : the US wants Japan to supply the submarine for US reasons (economic, alliance dynamics, political, technical etc). Those reasons include the US preference that Japan's submarine sale serves as a source of income and encouragement for an expanded Japanese defence budget and to help Japan build an alliance system. The US is also selective as to which nations it will supply the its highly sensitive submarine combat system

  : the Soryu involves less technical and economic risk compared to the unbuilt competing bids (HDW 216, DCNS SMX Ocean and Saab-Kockums 4,000 ton Type 61)

  : a deal with Japan is because Japan (not Germany, Sweden and France) is an important Australian  regional ally that can offer many future benefits in strategic support, information sharing and broader trade areas.

  : buying the 3,000 ton (surfaced) Soryu should involve lower price and shorter lead-times than
buying the competing 4,000 ton (surfaced) drawing board only competitors.

Basically, whether the selection is called "open tender" or "competitive evaluation", the same person, Prime Minister Tony Abbott, is making the same decision for the same reasons. Due to US (and to a lesser extent Japanese) preferences those reasons would apply to any Coalition Prime Minister that might replace Tony Abbott.

A Labor Prime Minister may or may not be swayed by some Build in Australia (union, ideological, electoral) reasons. As Labor Opposition Leader Shorten completely supported Australia following the US back into Iraq it is very likely that Shorten would also adhere to the US policy on Austrralia choosing the Soryu.

It is unknown whether Japan (including Mitsubishi and Kawasaki) would be prepared to resolve many Australia public misgivings, by agreeing to do much of the Soryu build in Australia. I already take is as given that the major Australian industrial input will be ASC doing some work on the evolved AN/BYG-1 combat system - also Australia making some of the submarine steel.

I would say the only way to defeat the Soryu "bid" would be to appreciate Australia's budget crisis. This is to respond by offering a submarine at vastly lower price. That could not be achieved with a 4,000 ton (surfaced) design. Only modifications of existing submarines (around 2,000+ tons) have a chance of beating the existing Soryu submarine.

Pete

Possible Australian Future Submarine Competition Again Raised

DCNS SMX Ocean concept submarine - being offered to Australia as the "conventional Barracuda".
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Dramatic DCNS sales video for the SMX Ocean.

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news.com.au published an article on January 31, 2015 that confirms the expectation (recorded here) that the Australian Government may announce (in the next few weeks) that it is holding a submarine selection competition. news.com.au is owned by Murdoch's News Limited. Some useful data  in the article concerrns the contenders wishing to sell to Australia:

"THE PLAYERS AND THEIR MARKETS

*DCNS - France, Brazil, Pakistan, India, Chile and Malaysia

*Saab Kockums - Sweden, Australia

*TKMS - Germany, Brazil, Greece, South Korea, Portugal, Turkey, Israel, Singapore and South Africa.

*Kawasaki/Mitsubishi Japan - Soryu Class Japan only"

In any competition France's DCNS is likely to include the "conventional Barracuda" (SMX Ocean) in any bid (see artist's conception and video above).

Comments in the news.com.au article are very much in line with what I have argued in Submarine Matters over the last few weeks.

Within the article the submarine expert at the Australian Strategic Policy Institute (ASPI), Andrew Davies, commented that any Soryu deal "...is government-to-government and the Japanese are not interested in a commercial competition. This would be their first submarine collaboration and they don’t see themselves as a commercial bidder.”

This Japanese assumption that it is above commercial bidding may already render a "competition" a meaningless exercise that endorses the Soryu as the winning "bidder". 

The only major error in the news.com.au article is the statement one-third the way down that "...DCNS [is bidding] an evolved nuclear boat that is already in service." This is incorrect. DCNS is offering what it calls a "conventional Barracuda" (also called "SMX Ocean"). The Barracuda itself is a not-yet-launched nuclear submarine-"boat". Launch of the first Barracuda may occur in 2017. That Barracuda may be in-service in 2018 but probably later. See http://en.wikipedia.org/wiki/French_Barracuda-class_submarine. 

Due to the complexity of a conventional Barracuda's propulsion system any conventional Barracuda might not be in service until 2025 - and that is if DCNS finds a customer.

See my earlier article of October 31, 2014 which describes how different a conventional Barracuda-SMX Ocean would be from the nuclear version (that is still under construction). 

Still it has to be said that while conventional Barracuda-SMX Ocean is at the conceptual stage, the likely German bid, the TKMS-HDW 216, is even more conceptual. The increasingly used term "vapour-ware" applies to the 216.

The Australian Government may be ensuring decades of problems if it assumes that the Soryu challenge can only be met by very large submarines that don't exist. Instead a large version of the existing Scorpene or of the HDW Dolphin should be seriously considered as contenders. The automatic assumption held by the Government since 2009 that the future submarine MUST be heavier (surfaced) than  the Collins forgets that the relationship between size and range is not linear. The range of the already built HDW 214 is already 12,000 miles. See more argument here.

Pete

Indian Possible Interest in Buying-Building Japan's Soryu Submarine - Australia

Two Prime Ministers - Japan's Abe and India's Modi. Are their countries close enough for a Soryu deal?

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The Indian press reported on January 29, 2015 that India, under submarine purchasing-building Project-75I (I for India), may wish to select six Japanese Soryu submarines for building in India. The Rs 50,000 crore project price converts to $US8,133,990,000 that is $US8.13 Billion (where one crore is 10,000,000 Indian Rupees and one Rupee is worth 0.016 US Dollars).

See reference on Submarine Matters to:
-  the slow pace of the Project-75I selection way back to 2008 and 2011
-  then an article of August 2014 (which also mentions the already building 6 Scorpene "Project-75" no "I")
-  see also the 2014 reference to the DRDO fuel cell which has complicated Project-75

If a legitimate tender process is held other contenders to sell a large conventional submarine are:
-  Germany (TKMS-HDW)
-  Russia (Rosoboronexport)
-  Spain (Navantia)
-  Sweden (Saab-Kockums), and 
-  France (DCNS). 

COMMENT

Several problems already seem evident in the possibility of Japan selling Soryus to India:

1. India's "build in India" intention may clash with Japan's (to date) insistence that any Soryus it markets should be built in Japan. 

There may be a solution that may allay many of Japan's concerns. If Japan is interested it can contact me by email - see email on my profile...

2.  Japan would be mindful of India's closeness to Japan's strategic opponent, Russia. Japan is very sensitive to the security of its submarine technology secrets. Therefore Japan would not want the secrets of any Soryu that is sold to India to be passed on to one of Japan's opponents. India has been close to Russia on a defence sales, weapons' development and on secondment of personnel, levels for decades. India and Russia are particularly close on submarine high technology matters - including INS Chakra, the Akula II SSN that Russia has long leased to India. 

3.  India may perhaps have a problematic reputation as a weapons system buyer from Western firms. France is unfortunate enough to be involved in both the major examples. 

a. The first example is in-building Project-75 (no I) where France (DCNS) has been assisting India to build 6 Scorpenes for the last decade (see Project 75 and third paragraph of this Indian article ). India has expressed displeasure with alleged French caused delays. Over the years India has increasingly wanted AIP in those Scorpenes - India sees AIP as important - in part to surpass the three AIP equipped DCNS Agosta 90Bs submarines operated by Pakistan. But India may not wish to pay the higher price adjustment that DCNS would want to charge (AIP being an expensive upgrade). India has countered with a project by DRDO to develop a fuel cell AIP. India may also be using the usual strategy of great powers (sellers and buyers) - which is delay for political and commercial leverage. 

b. Secondly, under the Medium Multi-Role Combat Aircraft (MMRCA) competition - on 31 January 2012 it was announced that Dassault Rafale won that competition. The MMRCA competition may be worth around US$30 Billion. However on 10 January 2015, India hinted it would not sign the Rafale deal with Dassault but instead perhaps buy more Su-30MKIs or Su-35s from Russia. India may also be attempting to leverage a better result from Russia on the joint India-Russia PAK- FA stealth fighter-bomber project - also known as the T-50. 

4.  If India insists on AIP this may cause problems for Japan. In Japan's first 5 Soryus Japan included Stirling engine AIP from Sweden. It is unlikely that Japan would receive Swedish permission to sell Soryus with Stirling AIP to India. Sweden, after all, would prefer to sell its own Saab-Kockums  submarines, with Stirling technology, to India. If Japan accepted an offer from India-DRDO to build an indigenous fuel cell AIP (see above) this may be a problem or opportunity because Japan may be in a strong technological position to jointly or unilaterally develop an AIP.  

Broader Implications - Australia and Canada

If there is a prospect of "build Soryus in India" - even whether or not it happens - this may have implications for any Japanese Soryu sale to Australia. Perhaps "build Soryus in part or whole in Australia" might be more possible?

If India is serious about buying 6 very large conventional submarines - built in India - with AIP - then Germany's HDW 216 and France's SMX Ocean may both be stronger contenders than Japan's (build in Japan - maybe no AIP) Soryu. This may increase the production runs and drive down development costs for the 216 and/or SMX making them more attractive to Australia. Canada has also been grouped with India and Australia as a country with a relatively large budget in need of large, long range, replacement submarines.

Please connect with India's Rising Nuclear and Conventional Submarine Force, May 21, 2015 http://gentleseas.blogspot.com.au/2015/05/indias-rising-nuclear-and-conventional.html .

Pete