Wednesday, November 9, 2016

Dump compromised DCNS Barracudas, lease US Virginias: A simple commercial arrangement that will keep Trump engaged in the defence of this region

by Ganesh Sahathevan

"I think Hillary will win, and win easily, and I think that will be the best outcome for Australia because she does support free trade."She does support the United States being deeply engaged in our Asian region, which is critical to us.

These were the words of Christopher Pyne, the minister effectively in charge of the AUD 50 billion Barracuda submarine project, when asked who he preferred as US president.

The reality, now, for Pyne and a number of his Cabinet colleagues is a Trump presidency.

Trump has shown himself throughout his campaign to be true to his commercial antecedents, selling the electorate what it wanted. Consequently, it is obvious that in order to ensure his incoming administration remains "deeply engaged in our Asian region", good commercial reasons must prevail.

The simplest way of doing so given Australia's defence needs and US concerns about growing and unsustainable defence and military spending is to immediately scrap the AUD 50 Billion DCNS Barracuda A1 project ,and instead lease US Virginia Class submarines. This alternative has the advantage of being at least 40-50% cheaper, and at a fixed cost.Of course, it also has the advantage of immediate or very near term delivery.The income stream to the US Government from the leases would justify continued US engagement.

The DCNS proposal has already been compromised, so tearing up whatever agreement the Commonwealth may have with DCNS without penalty should be relatively easy.

For the reasons why Australia needs technologically advanced nuclear submarines now, and not in 20 years time see:

Predicting Chinese submarine technology using Russian technology as a proxy in a Dempster Shafer framework-Part 1

We'll be sunk if we don't choose the best submarine: Ross Babbage's advice from 2012 rings ever more true given humiliation by the Russian fleet

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