Recently, we heard a bold statement from federal Industry Minister, Ian Macfarlane, regarding the procurement of Australia’s new submarines.
“I can promise you this,” he said, in an interview with ABC Radio. “There will be more jobs in South Australia as a result of whatever submarine we buy.”
He insisted that no decision had been made on the submarine fleet; he promised extra jobs would be created in Australia during the construction and the maintenance phases. He did not accept overwhelming evidence, presented by the Economic Development Board of South Australia that building the submarine overseas will cost thousands of jobs and billions of dollars nationally, not just in South Australia.
From an advanced manufacturing perspective, however, there is evidence the minister may have made promises he will find impossible to keep. Analysis of his statements leads to a number of interesting questions, particularly if the submarines are procured from Japan.
The “real jobs” would be in maintaining and not building the fleet, he said, and the “electronics” would be fitted in Australia. What, exactly, does he mean by “electronics”? In the context of submarines this is an important question, with significant repercussions for the design, manufacture and procurement of the fleet.
Does “electronics” refer to the AN/BYG-1 tactical control and Mk 48 weapons control system? Does it also include the weapons handling and launch system? Or are we referring to the on-board entertainment system?
A submarine is an optimised closed system, where the installation and location of every component is crucial. Cable runs have to be installed during the build phase – it cannot, without incurring substantial costs, be added or modified later. Additionally, the submarine will have to undergo extensive sea trials – either in Japanese or Australian waters – before delivery. How can a submarine be built, trialled and delivered without the “electronics” in place?
If sea trials are conducted in Australia, the Japanese would have to use a heavy lift ship to transport the submarine shell to Australia, we would then have to fit the electronics here and then carry out the sea trials. The expense of transportation would be enormous.
Then there is the question around where any necessary modifications identified during the sea trials would be carried out, since we would not understand the Japanese vessel design nor have the necessary tooling to carry out any modification.
If the trials are conducted in Japan, the submarine will have to be fitted with its electronics at the Japanese shipyard before they start, breaking the minister’s promise.
Fitting the submarine’s electronics in Japan raises further questions. Will the submarine be operated by an Australian crew during the trials? If so, would the Japanese be willing to train our personnel in their electronics systems, sharing (and potentially jeopardising) their IP?
Who will certify that the submarine and the crew are safe to send to sea, before delivery of the asset to Australia? Will Australia’s Submarine Sea Training Group be moved to Japan, or be flown back and forth? Where will our submariners be trained – in Japan or in Australia? Given that first of class trials for submarines take 2-3 years, what would be the impact on delivery of the first submarine to Australia?
By building overseas, the federal government not only risks broken promises, it also risks unnecessary complexity, lost time and additional expense. There is also a risk of repeating past mistakes, at enormous cost to Australian taxpayers.
The much-cited cost overruns of the Air Warfare Destroyer project were due, in part, to the changeover from a Spanish combat system to an American design. The problem, from a build perspective, was that the American system used more power and needed thicker cables – they did not bend sharply enough to fit inside the cable runs already installed in the ship. The changeover led to an expensive process of re-design and re-certification.
We also have the lessons from the Collins Class, where modifications for the AN/BYG-1 and Mk48 CBASS torpedoes cost around $1 billion.
Do we know how much it will cost to modify a Japanese-built submarine to fit AN/BYG-1 and Mk 48 torpedos? What about additional modifications, involving other electronics on board the vessel?
How can we begin to assess the cost when we have no access to the Japanese IP, we are not part of the design team, and our key personnel are not fluent in Japanese? Has the government fully considered the repercussions of its promises? The cumulative cost of return airfares between Perth and Tokyo alone would be significant. The idea that submarine “electronics” can somehow be separated from the rest of the build is unrealistic.
Far better, surely, to follow the suggestion by Dr John White, one of the Coalition’s key ship-building advisers. In order to ensure that the submarine is built in Australia on time, fulfils the Navy’s requirement, and secures the lowest possible cost to the taxpayer, we need a contested program definition study to select the right partner for Australia’s most expensive procurement to date.