Mandating a 'floor' for Future Submarine build a mistake

Defence Minister Marise Payne has dismissed any desires to place a definitive percentage on the local build and assembly for the $50 billion SEA 1000 Future Submarines.

Speaking at the Future Submarine Supply Chain briefing in Sydney at the Pacific 2017 Maritime International Exposition, Minister Payne said maximisation of Australian industry content (AIC) has been the government's main goal since Naval Group was named as the successful tenderer last year.

"We have worked incredibly hard since we made the announcement in April of 2016 to be very clear about the fact that the task I want to see achieved, and the government wants to see achieved in the development of the future submarines, is to maximise Australian industry content – to maximise it," Minister Payne said.

"The political argy bargy will have some people say they want to see a percentage put on that, but I don't see why you would put a floor on an item like that. Why wouldn't you start by reaching for the highest point possible? It doesn't seem logical to me to put a base on it."

Former chief executive of Naval Group Australia (formerly DCNS Australia) Sean Costello previously said a 90 per cent figure would be achieved, a number now disputed by current CEO Brent Clark.

Clark, who took over after Costello's surprise resignation earlier this year, said the highly publicised 90 per cent figure relates specifically to the production aspect of the submarine, rather than the entire acquisition.

"I think, not trying to put words into people's mouths, what my predecessor was talking about when he mentioned the 90 per cent figure, he was talking about production, and I think that got lost in translation," Clark told Defence Connect.

"He was basically trying to explain that in terms of production of the submarine, the pressure hulls, putting all the steel and systems and wires and all that stuff into the submarine, that would achieve a very high percentage of Australian industry involvement, that's what he was talking about.

"I don't think he was ever saying that there would be 90 per cent total industry involvement."

Minister Payne also added that the government had "been very careful to say that our target, our aim, is to work across the breadth of Australian industry ... to make sure that where there are opportunities available for Australian industry to participate", rather than placing a percentage on the project, despite Christopher Pyne last year echoing Costello's figure of 90 per cent.

The 12 Future Submarines will be constructed in Adelaide. Construction of the submarines will take place in Adelaide and will begin in 2021-22. Construction will extend into the late 2040s to 2050 timeframe.

 

Mandating a 'floor' for Future Submarine build a mistake
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