Concept Design for Australia’s $36 Billion Submarine Fleet to Be Finalized by Year’s End
These recent reports from Australian media suggest that L'affaire Adelaide is running into even more turbulence ,and well on its way to joining L'affaire Karachi in the annals
of DCNS/Naval Group debacles:
The Sydney Morning Herald reported on 8 November 2018:
The chief of Australia’s navy has revealed that the first of the new fleet of submarines will likely not be fully operational until 2035 - three years after it is due to be in service - and that all six of the existing Collins Class submarines may need to have their life spans extended.
The Chief of Navy, Vice Admiral Mike Noonan, told Fairfax Media he was expecting the first of the new fleet to be delivered to the navy in about 2032, but they would need to go through extensive testing.
Previously Defence has said that the first of the new fleet, which is being designed and built by French firm Naval Group, will come “into service” in 2032.
On 28 October 2018 the Australian Financial Review said:
In an interview with The Australian Financial Review, Rear Admiral Greg Sammut has defended the project against claims of a cost blow-out and insists outstanding issues that have stopped the overarching contract being signed with Naval Group will be resolved by year's end.
"So it is in that context that we are putting in place the SPA with that understanding the offer was built around eight boats and necessarily the terms and conditions we have should contemplate that, noting that the size of the fleet beyond eight boats will be a matter for government," he said.
"That doesn't mean we must buy eight boats hell or high water, the contract enables us to contemplate what would occur if it was less than that and what would have to apply in those circumstances.
"What we've done is we've left ourselves flexibility for the number of submarines that we may order at any one time."
See full article below for the full extent of the Rear Admiral's confusion.
Something rather strange happened earlier this month. The Minister for Defence, Christopher Pyne, went to the media, not once but three times, to rebut criticism based on what he termed ‘‘misguided facts’’ about his department’s $50 billion Future Submarine project. The government is investing political and financial capital in helping create a sustainable, sovereign defence industry that will participate in nearly $200bn-worth of capital equipment projects over the next generation. As architect of this plan, Pyne has been pro-active in explaining and justifying to an often-sceptical industry and general public what the policy is designed to achieve and how. He has created a precedent, if he follows through. Pyne has shown willingness to engage and be candid, to challenge ‘‘misguided facts’’ to prevent a vacuum forming, and that’s a vital break with the past. Truth and reputations matter, and as the Collins project showed, a vacuum kills everything except ignorance and malice.
This writer gets very concerned when anyone starts using terms like "misguided facts" when dealing with the media.
END
Reference
Australia may not build the planned full complement of 12 next generation submarines, the navy's program chief has revealed amid protracted and at times fractious negotiations with the French designer.
In an interview with The Australian Financial Review, Rear Admiral Greg Sammut has defended the project against claims of a cost blow-out and insists outstanding issues that have stopped the overarching contract being signed with Naval Group will be resolved by year's end.
Admiral Sammut also rejected suggestions that taxpayers were paying too much, saying the $50 billion total budget covered more than just the physical submarines and the cost of the French boats was on par with rival bids.
Canberra and Naval Group had been working towards and unofficial deadline of September to sign the Strategic Partnering Agreement (SPA), which is intended to manage the overall program as the Shortfin Barracuda submarines are designed for Australian needs and built in Adelaide over the coming decade.
But as revealed by the Financial Review in August, a stalemate had emerged over key aspects of the contract, including warranty periods for defects and the implications for technology transfer if Naval Group – which is effectively majority-owned by the French government – should ever be sold.
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Admiral Sammut argued it was crucial to get the SPA right rather than rush in and sign it because it would cover the terms and conditions for the design, build of the first submarines, technology upgrades and subsequent boats.
"We always contemplated that finalising the SPA agreement would be challenging because it is such a complex set of arrangements and contracts in which we'll enter into over the next 30 odd years for the delivery of the submarine," he said.
"We want to avoid a situation where circumstances arise that the SPA and the program contracts that sit under it can't manage appropriately because we don't want to halt the work.
"Whenever there are schedule delays because we can't manage events as they arise, they invariably lead to lower productivity which always increases the costs."
Admiral Sammut rejected the need for arbitration.
"The parties must be able to reach agreement between themselves, not be told to reach agreement because an imposed agreement is not an agreement," he said.
"It's absolutely necessary that Naval Group and the Commonwealth agree on terms mutually. In doing so we have ownership of those terms and conditions together."
While the Rudd government's 2009 defence white paper identified the need for 12 new submarines – doubling the size of the existing Collins class fleet – Admiral Sammut revealed Naval Group and the German and Japanese contenders had only been required to bid on the basis of providing eight conventionally powered submarines.
"So it is in that context that we are putting in place the SPA with that understanding the offer was built around eight boats and necessarily the terms and conditions we have should contemplate that, noting that the size of the fleet beyond eight boats will be a matter for government," he said.
"That doesn't mean we must buy eight boats hell or high water, the contract enables us to contemplate what would occur if it was less than that and what would have to apply in those circumstances.
"What we've done is we've left ourselves flexibility for the number of submarines that we may order at any one time."
Critics of the French choice and the headline $50 billion have complained cheaper options were available. German bidder TKMS claimed it could build 12 submarines for $20 billion, while Centre Alliance Senator Rex Patrick claimed recently that 20 modified off-the-shelf submarines would cost $20 billion.
But Admiral Sammut said the cost of the French, German and Japanese bids were all "comparable" and dismisses the suitability of off-the-shelf designs as inadequate for Australia's needs for a long-range, conventionally powered submarine capable of operating for long periods away from its home port.
Criticism of the $50 billion budget was "misinformed" because it also incorporated the boats, Lockheed Martin designed combat system, upgrades to wharves, construction of a new shipyard in Adelaide, logistics, project running costs and contingencies.
"The contract with Naval Group will only be a portion of that $50 billion – a major portion but not all of that $50 billion," he said. Admiral Sammut rejected claims of a "blow-out", saying the $50 billion budget in was "constant dollars", which do not account for inflation, and had not shifted since 2016.
He said construction was slated to start in late 2023, and by the time the first submarine entered service in the early 2030s, work on the fourth submarine would be underway.
The SPA did not contain any provision for Australia to switch to nuclear-powered submarines down the track, he said
