Defence advised to walk away from French subs
BEN PACKHAM 10:30PM JANUARY 14, 2020

A submarine at the Naval Group shipyard in Cherbourg, France. Picture: AFP
A key adviser to the federal government was so concerned about the $80bn Future Submarine Project it warned Defence it should consider walking away from the French-built boats.
A report by the Australian National Audit Office released on Tuesday revealed the Naval Shipbuilding Advisory Board warned that Defence should consider whether proceeding with the project was in the national interest.
The ANAO said in the report the submarines’ design phase was running nine months late, and “Defence cannot demonstrate that its expenditure of $396m … has been fully effective” in achieving key milestones.
The report also revealed Defence had approved the fabrication of complex hull parts for the first future submarine to be undertaken in France, rather than Australia, to guard against delays to the build schedule.
The revelations follow the Defence Department’s admission to a Senate estimates hearing late last year that construction of the first boat had been pushed back by up to a year, and the cost to build and maintain all 12 submarines would reach $225bn over their 50-year lifespan.
Defence told the ANAO that if the subs project was delayed by more than three years, it would “create a gap in navy’s submarine capability” that could affect plans for the nation’s Collins-class submarines.
In a sign of the tensions between Defence and French shipbuilder Naval Group, the report said the government’s Naval Shipbuilding Advisory Board, chaired by former US Navy secretary Don Winter, warned in September 2018 that “Defence should assess whether program risks outweighed the benefits of proceeding”.
At that time, Defence was struggling to negotiate a strategic partnering agreement with Naval Group. “The Naval Shipbuilding Advisory Board expressed a separate view that, even if the strategic partnering agreement negotiations were successful, Defence consider if proceeding is in the national interest,” Defence told the ANAO. “This consideration was represented in the advice to government seeking approval to enter the (SPA).”
The agreement was finally signed in February last year and included a provision for Australia to break the contract if the subs were delayed or failed to deliver promised capability.
Defence has previously warned of “high to extreme risk” to its naval shipbuilding program, with differing engineering methodologies between France and Australia cited as a potentially major issue.
The Auditor-General said that establishing “an effective long-term partnership between Defence and Naval Group” was a key risk-mitigation measure.
Opposition defence spokesman Richard Marles said government “mishandling” of the nation’s biggest ever defence acquisition posed major risks.
“On all three measures of this program — on time of delivery, on the cost of the project, and on the amount of the Australian content — the numbers are all going the wrong way,” he said.
Centre Alliance senator Rex Patrick said the ANAO report was “one of the most concerning reports I have ever seen”.
“The alarm bells are ringing. If the minister is not hearing them, they need to be turned up,” Senator Patrick said. “Defence’s view that they can recover the schedule is naive at best.”
But Defence Minister Linda Reynolds said the schedule delay had been essential to get the submarine design right.
“Doing so will reduce costly changes and uncertainties while the Attack-class submarines are built, and will reduce the need for larger construction contingencies,” she said.
She said the first submarine was still due to be delivered to the navy in 2035, as planned.
The Naval Shipbuilding Advisory Board’s role is to provide expert, independent advice to the government on its $90bn shipbuilding program. Its membership includes three retired senior navy officers — Rear Admiral Thomas Eccle, Vice Admiral William Hilarides, and Vice-Admiral Paul Sullivan — and former Department of Education secretary Lisa Paul.
Australian Strategic Policy Institute defence analyst Marcus Hellyer said the advice of the high-level board was normally confidential. “It’s the first time I have seen that gloomy assessment,” he said. Mr Hellyer said the potential “capability gap” was likely to refer to the risk of having fewer than six operational submarines at any point.
He said it was now likely all six Collins-class boats would have to have their lives extended.
https://www.theaustralian.com.au/nation ... a683a790b2
The COMMENTS are quite inspiring
William 7 MINUTES AGO
It was stated in the local media several months ago that for a fee of $400 Million Australia could pull out of this ridiculous Dud Submarine deal. Chicken Feed in the overall defence budget.I can’t say much more or I will get moderated out again.William B.
Greg 6 MINUTES AGO
Never mind the design phase being behind. The whole project is in the 18th century. Diesel engine retro fits ensures these things will be traceable where ever they go.
Jeffrey 9 MINUTES AGO
Every signal says cancel. Delaying the decision will make things worse.
The design is already late and anyone with project management experience knows that if there are delays in design then time is never made up plus it indicates more risks in the future. Cancel now.
Plus the basic concepts are flawed and the risks of being a pioneer using a French contractor that is positioning to do all build as well is not good sign either. If the ANAO is concerned then cancel, they have looked inside the deal and have the best understanding.
The reason this very expensive deal got legs is because Turnbull wanted an alternative to Tony Abbott’s Japan deal the US liked to; simply because it was Abbott’s idea.
Moet 10 MINUTES AGO
Listen up Government! Walk away from this disaster! Now!
Pam 9 MINUTES AGO
Bring on nuclear in all areas. Mining, generating, medical,, waste reprocessing and storage.
CHRISTINE 9 MINUTES AGO
Given the pace of technological advancement in recent times these subs must surely be obsolete by the time they are built.
Reality Czech 10 MINUTES AGO
They will forever be known as the 'future submarine' .
Phillip 10 MINUTES AGO
Seems to me this horse has long ears, & I'm thinking that in 15 years nothing will escape the new weapons of war that our intelligent species will come up with.
Oh well, so much for brotherly love.
Colin 10 MINUTES AGO
Cancel it NOW! And lease the Virginia class subs from the US. Maybe we can then learn some nuclear technologie and use it to build small power plants. Or is this my fanciful thinking?
Daniel 11 MINUTES AGO
Who will defend the country against this imongoing incompetence?
Rolf 12 MINUTES AGO
Like the Emperors New Clothes, anyone could see the Emperor was actually naked. Meanwhile, sycophants clapping and cheering on the Emperor confuse the public.
Edi 15 MINUTES AGO
First one to be delivered in 2035, maybe. This is a joke, right.
C 17 MINUTES AGO
Really? It took an "expert" to tell the government that?
We, the common sense general public, have been saying the same thing from the moment this farce was announced.