Payne's valiant defence of DCNS against Xenophon raises the
question: Is l'affaire Adelaide a repeat of DCNS's l'affaire Karachi?
In the words of Sydney broadcaster Alan Jones:
Jones cannot be ignored; it is hard now for those in Sydney and NSW who are involved in
l'affaire Adelaide to pretend that is not going to be a repeat of DCNS's l'affaire Karachi.
END
SEE ALSO
In the words of Sydney broadcaster Alan Jones:
‘Woeful, disgraceful, wasteful’: $80-billion submarine project continues to unravel
l'affaire Adelaide to pretend that is not going to be a repeat of DCNS's l'affaire Karachi.
END
SEE ALSO
Saturday, October 13, 2018
Is l'affaire Adelaide a repeat of DCNS's l'affaire Karachi-Australian taxpayers have not been told why French subs will cost 5 times more
by Ganesh Sahathevan
First for context and references see:
DCNS's Philippe Japiot charged with corruption, spent much time in Australia before the award of the Australian AUD 50 Billion contract
What did DCNS (aka Naval Group) do with information on Ray Grigg's affair:
DCNS's Philippe Japiot charged with corruption, spent much time in Australia before the award of the Australian AUD 50 Billion contract
What did DCNS (aka Naval Group) do with information on Ray Grigg's affair:
Adelaide deepens
Then some recent reporting on escalating costs:
The AFR reported in May 2018:
Taxpayers will spend $100 billion to build and operate the new fleet of submarines, Defence Department officials have revealed for the first time as they also fended off warnings the naval shipbuilding program was at risk of cost blowouts and delays.
The Australian's reported on 2 October 2018:
It’s only when you look at how the original deal was done that you realise why the capital costs have risen from $50bn to $90bn (before it starts) and that add-ons take the total outlay to $220bn-plus over several decades.
And worse still, thanks to the research work of leading physicist Aidan Morrison and questions by Senator Rex Patrick and others, we now know there are grave doubts about the technology behind the submarine, which looks like a $220bn white elephant. Significantly, the French are shifting their ground on the technology.
And finally,against the backdrop of escalating costs ,this report ,where costs seem to be an irrelevant consideration:
Then some recent reporting on escalating costs:
The AFR reported in May 2018:
Taxpayers will spend $100 billion to build and operate the new fleet of submarines, Defence Department officials have revealed for the first time as they also fended off warnings the naval shipbuilding program was at risk of cost blowouts and delays.
The Australian's reported on 2 October 2018:
It’s only when you look at how the original deal was done that you realise why the capital costs have risen from $50bn to $90bn (before it starts) and that add-ons take the total outlay to $220bn-plus over several decades.
And worse still, thanks to the research work of leading physicist Aidan Morrison and questions by Senator Rex Patrick and others, we now know there are grave doubts about the technology behind the submarine, which looks like a $220bn white elephant. Significantly, the French are shifting their ground on the technology.
And finally,against the backdrop of escalating costs ,this report ,where costs seem to be an irrelevant consideration:
Future submarine project deadlocked as French shipbuilder digs in on $50 billion contract
Updated
The Government has grown so frustrated with the French company selected to build Australia's next fleet of submarines that Defence Minister Christopher Pyne refused to meet top officials visiting the country this week.
Naval Group was selected in 2016 to build 12 submarines for the Australian Navy, in the country's largest-ever defence contract worth $50 billion.
The ABC understands Mr Pyne will only meet the chief executive of the majority French state-owned company once a crucial document, the strategic partnering agreement (SPA), has been signed.
Negotiations on that document have stalled and it is feared they may not be resolved before next year's federal election.
Defence and industry figures have told the ABC that France and Australia will not be ready before 2019 to sign the document, which is needed before detailed design contracts can be finalised, and submarine construction begins.
Sources familiar with the process say a goal to sign the vital SPA during a visit to Adelaide this week by French Minister Florence Parly has slipped off course, with fundamental differences that may not be reconciled before early next year.
Concerns over warranties and technology transfer are believed to be the main sticking points in the tough negotiations between the Australian Commonwealth and French-owned Naval Group.
The knock-on effects of delay on the SPA, which covers the guiding terms and conditions that govern the submarine program, and the likelihood of a federal election being called in the first quarter of next year threatens to create a "perfect storm" of uncertainty, with some risk that it could ultimately sink the French project entirely.
With the winning bidder for Australia's next fleet of submarines announced, attention turns to how it will meet Australia's high-endurance requirements.
Ms Parly was accompanied to Australia this week by Naval Group chief executive Herve Guillou and project boss Jean-Michel Billig, but scheduled meetings between the two company representatives and Mr Pyne and Defence Industry Minister Steven Ciobo were cancelled.
Naval Group has declined to say whether it is disappointed that Mr Pyne refused to meet them, but has conceded the negotiations with Australia are "challenging" and "complex".
"Negotiation of the SPA is continuing to ensure we implement an equitable and enduring agreement to deliver the Future Submarine capability over the next 30 years," Naval Group said in a statement.
"Naval Group continues to enjoy a strong and collaborative relationship with the Commonwealth."
Another round of talks between Naval Group and the Defence Department has been scheduled for October in Canberra, but even if a broad agreement emerges next month, a finalised SPA document is unlikely to be signed before Christmas.
Federal Opposition figures have signalled that if the SPA is not completed by next year's election, Labor could order a review of the project if it wins office.
Asked today whether the agreement would be signed before the next election, Prime Minister Scott Morrison said the Government was working to the timetable that had been set out.
"The timetable for that has already been set out and we're working to that timetable," he said.
The ABC has contacted Mr Pyne for comment.
Topics: government-and-politics, defence-and-national-security, defence-forces, navy, defence-industry, australia
First posted
$100 billion babies: Defence reveals true cost of new submarines for taxpayers
Taxpayers will spend $100 billion to build and operate the new fleet of submarines, Defence Department officials have revealed for the first time as they also fended off warnings the naval shipbuilding program was at risk of cost blowouts and delays.
While the $50 billion budget to build the 12 French-designed submarines in Adelaide has been known for several years, Rear Admiral Greg Sammut told Senate estimates on Tuesday the same amount again would be spent on sustaining the submarines throughout their operating life, although he conceded the costs were yet to be finalised.
"Many of the detailed costs of acquisition and sustainment will be determined during the design process through choices made but at this point early estimation of the sustainment costs for the fleet are of the order of up to $50 billion on a constant price basis," he said in response to questions from Centre Alliance Senator Rex Patrick.
Construction of the first submarine is scheduled to start by 2022 and it will enter service in the early 2030s, with the last submarine to be retired by 2080.
In comparison, the six Collins class submarines currently cost $600 million a year in sustainment costs.
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Senator Patrick later told The Australian Financial Review he was concerned the government had underestimated the cost of sustaining the new submarines, with naval sustainment costs generally between two and three times the acquisition cost. For example, the government has budgeted between $7 billion and $11 billion to sustain the offshore patrol vessels, which will cost $2.8 billion to build.
"It's disturbing that Defence has done this," he said.
"The variations being talked about here make the corporate tax cut revenue impacts look like pocket change. This issue needs a lot more scrutiny."
'Significant changes' to program
Officials also disputed key findings of an auditor-general's report this month that highlighted the "high to extreme risks" in establishing a continuous shipbuilding industry in Australia.
Deputy secretary Kim Gillis, who oversees Defence's Capability, Acquisition and Sustainment Group, suggested some of the report was outdated because Defence had implemented a number of measures to mitigate risks of building warships and submarines in Australia. He said the report had been misinterpreted by some commentators.
"At no stage has Defence not been providing robust advice to government. You can see the significant changes that have occurred over the last two years as we have developed this program," Mr Gillis said.
Outgoing Chief of Defence Force Mark Binskin told estimates the navy would soon be deployed to the south-west Pacific in a goodwill mission with neighbouring countries amid concerns over China is using aid and infrastructure projects to gain regional influence.
Air Chief Marshal Binskin said four ships and 1000 personnel would take part in this year's iteration of its annual Indo-Pacific Endeavour exercise.
"The 13 week deployment will focus on the south-west Pacific, with an emphasis on planning for disaster assistance, multinational naval manoeuvres and training activities with partner nations," he said.
Labor has accused the government of failing to take a leadership role in the Pacific, allowing Beijing to fill the strategic gap, while Fairfax Media reported in April that China was also looking to establish a military presence in Vanuatu.
Helping the Philippines
Air Chief Marshal Binskin also said Australia had 180 army, navy and air force personnel deployed to the Philippines to help with counter-terrorism training and maritimes patrols, a much deeper level of commitment than previously revealed.
An initial 80 personnel were deployed midway through last year to help Filipino forces fight a local offshoot of Islamic State in the southern Philippines, but since the defeat of the insurgency in October, Australian personnel had participated in almost 3000 "peer-to-peer" activities such as training and patrols, including deploying two patrol vessels to the Philippines.
Defence Department Secretary Greg Moriarty said Australia's contribution to the Philippines cost $39.1 million in 2017-18.
Vice Chief of the Defence Force Ray Griggs confirmed a RAAF aircraft was continuing surveillance flights as part of enforcing sanctions against North Korea amid confusion over whether the summit between US President Donald Trump and North Korean dictator Kim Jong-un would go ahead.
END
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