Maybe they will reassess details after eight........
It was noted at the time that neither Navy or Defence had sought 12, but eight, which would finally guarantee the requirement for two subs deployed from Perth and two from Sydney (claims that sub availability are better than 50 per cent are utter bollocks - there is zero chance of nine from 12 subs ever being available).The bigger number came from Rudd's office: the story behind that increase remains unknown, but the input of a couple of tiresome wannabe Defence types who had Rudd's ear comes to mind........
For those who couldn't link to the AFR article, here it is!
Australia not locked into buying 12 submarines, navy program chief reveals
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.
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.
