ustralia may be forced to refit its entire fleet of Collins-class submarines and operate them for another 30 years because long delays in beginning construction of the navy’s 12 new subs risks eroding the nation’s strategic military edge in the region.
Australian Strategic Policy Institute senior analyst Marcus Hellyer has called for the Audit Office to investigate the rollout of the $50 billion project and whether delays in crucial contract negotiations between Defence, French submarine manufacturer Naval Group and weapons system integrator Lockheed Martin will result in extended delays in delivering the boats.
His call comes amid mounting frustration within the Australian government at the state-owned Naval Group, the French company selected to build the new submarines, as a crucial document, the strategic partnering agreement, remains unsigned.
Defence Minister Christopher Pyne reportedly has refused to meet the chief executive of Naval Group until the document is signed. This is unlikely until next year. Until the document is signed, detail design contracts cannot be finalised and construction of the submarines cannot begin.
Foreign Minister Marise Payne has vowed that Australia will give priority to protecting its own national interests in its negotiations with French company Naval Group on the future submarines.
Speaking in Washington she said despite reports of stalled negotiations between the two countries, she was confident both nations would eventually reach agreement of the terms of the contract.
“In a complex contract negotiation of this nature - and bear in mind this is an extremely significant contract both for the Naval Group and the Australian government - we want to be sure we are protecting Australia’s interests. That has to be the Australian government’s absolute priority and we will continue to negotiate on that basis,” Ms Payne said.
Australia and the Naval Group are said to be at loggerheads over crucial aspects of the contract. Until those issues are resolved, Naval cannot begin work with Lockheed Martin.
Mr Hellyer said the plan to replace the six Collins subs with 12 new Shortfin Barracuda models now faced long delays, due largely to a lag in initiating the project.
Rear Admiral Greg Sammut, the senior officer in charge of the Future Submarine program, told a Senate estimates hearing in May that the total cost of the project could run to $100bn when the sustainment costs were added to the acquisition price. However, many of the detailed costs of the project won’t be known until the design process is complete.
Australia is due to take delivery of its first Shortfin Barracudas in the early 2030s, with the balance to be delivered sometime in the 2050s.
Defence had originally planned to begin retiring the Collins subs from 2025. But the option exists to extend their operational life for a further decade with a full-cycle docking, which takes two years.
Mr Hellyer said it was certain the navy would be operating a blended fleet for some time, although he added this was not necessarily a bad thing, as it would allow the Collins subs to be used to train new submariners.
“Our analysis suggests that in the best case, if the Future Submarine program is delivered to the schedule they’re talking about — first sub arriving in 2030s — to avoid a capability gap defence is going to have to extend at least three of the six Collins,’’ he said.
Mr Hellyer said that a forthcoming study by ASPI argued it was now all but certain Defence would have to extend the life of three of the Collins subs by 10 years.
“Best case, if you only did three, which is the absolute minimum, we’d be operating Collins until 2042,’’ he said.
“If you did six, which I think we may have to, you’d be operating them until 2048.’’
