The latest round of Senate estimates hearings has revealed a startling cost explosion for Australia’s Attack Class future submarines, raising questions about affordability and a potential capability gap leaving the nation exposed at a time when half of the world’s combat submarines are expected to be operating in the Indo-Pacific.
It is the largest defence acquisition project in the history of the nation, but the apparently $50 billion project to replace the ageing Collins Class submarines with 12 regionally-superior submarines is in deep water as growing concerns about cost, capability and delivery time frame are again making headlines following a fiery exchange at Senate estimates.
Future Submarine Program manager, Rear Admiral Greg Sammut, explained to the Senate estimates hearing that the 'out-turned' cost of Australia's future fleet of submarines was estimated to be around $80 billion – a figure frequently cited but subsequently rubbished by former defence minister Christopher Pyne and other Defence officials.
Further compounding the costs associated with the acquisition is the continuing concerns about the capability of the proposed vessels with many expressing, often vocally, concerns about the obsolescence of lead-acid batteries and the conventional power plant expected to power the vessels out to the 2080s.
When then prime minister Malcolm Turnbull announced the DCNS, now Naval Group, conventionally-powered Shortfin Barracuda, now the Attack Class, as the successful design for the hotly contested SEA 1000 Future Submarine program in April 2016, it seemed as if the disastrous procurement of the Collins Class would be put aside.
The Attack Class is expected to deliver a quantum leap in the capability delivered to the Royal Australian Navy and its submarine service by leveraging technology and capabilities developed for nuclear submarines, implemented on a conventional submarine.
France's own projected fleet of Barracuda Class serve as the basis for Australia's own Attack Class with one major difference, nuclear propulsion.
However, with the first vessel expected to enter the water in the mid-to-late 2030s, concerns regarding the cost, delivery and capability of the vessels is serving to raise questions about the value proposition for a conventional submarine at a time of increasing technological advancement in comparable vessels operated by peer and near-peer competitors in the Indo-Pacific.
Another bump in the road – cost increases and delayed construction
As part of the Senate estimates hearing, RADM Sammut revealed that the total cost for the turned out vessels was now estimated to be $145 billion, bringing the total SEA 1000 program cost to around $225 billion by the time of the vessel's planned retirement sometime in the 2080s.
"It is only an estimate of the sustainment of the fleet, we are designing the sub today," RADM Sammut explained.
This cost explosion is further exacerbated by an apparent 'slip' in the planned commencement date for construction of the lead boat, HMAS Attack, which was widely publicised as 2022-23 and has now subsequently been pushed back to the 2024 time frame – further exposing Australia's ageing Collins Class vessels to potential adversary over match.
RADM Sammut was quick to explain this away, like a skilled operator, informing Senate estimates that the slated time frame was referencing the standing up of construction personnel, tools, infrastructure, processes and equipment to commence the construction of HMAS Attack's pressure hull in 2024.
These bombshells come following a revelation earlier in the year that the cancellation fees associated with the SEA 1000 program amounted to $404 million – which seems like a steal when measured against the ballooning costs associated with the program.
Plug and play construction, allied collaboration and the future of Australia's submarine force
To contrast the costs associated with Australia's future Attack Class submarines of between $4.2 and $6 billion per unit (including infrastructure development, research and development costs) – compared with the unit cost of the French Barracuda's of approximately US$1.4 billion ($2 billion) per unit (based on 2013 prices raises questions about the validity and cost-benefit analysis conducted on doubling down with early-20th century technology).
Contemporary submarine construction, like contemporary naval and civilian shipbuilding, is done predominantly in a modular, 'block build' fashion enabling an easier integration for technology development and enhancements throughout the build phase – what this means is a stark difference between the broader capabilities and technology in vessels over the life of the build phase.
The long lead-time prior to the commencement of the construction process provides a number of additional opportunities, particularly for Australia's Attack Class submarines – in particular to avoid the costly redesign and conversion phase, purchase the standard Barracuda Class design and make the necessary modifications to incorporate the US-designed weapons systems and combat systems without reinventing the wheel.
Doing so builds on the technological and industrial lessons learned by Naval Group throughout the same process getting Suffren to the launch stage – it wouldn't serve to hinder the build process for Australian industry and would serve to reduce risk for Australia.
Additionally, it would provide the opportunity for Australian industry to bring the phase forward by using Australian workers to build the full submarines while drawing on French nuclear propulsion expertise to serve as "technology insert" experts to install the nuclear reactors for the Australian submarines.
The long lead-time for this development would also provide an opportunity for Australia to embed both civilian and military nuclear experts and submariners in the nuclear industries and nuclear-powered submarine fleets of key allies including France, the US and UK to develop the expertise and skills required to safely, efficiently and effectively operate nuclear-powered submarines.
This stubborn insistance to consistently reinventing the wheel and calling it progress will serve to challenge the long-term capability of both Australia's submarine fleet while also cementing a 20th century focused industrial capacity.
However, it doesn't have to be this way, as Australia's recently initiated design clarification process, long lead-time for construction and combined with international partnerships provide the opportunity to reset the paradigm.
Questions to be asked
As an island nation, Australia is defined by its relationship and access to the ocean, with strategic sea-lines-of-communication support over 90 per cent of global trade, a result of the cost effective and reliable nature of sea transport.
Indo-Pacific Asia is at the epicentre of the global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and choke points of south-east Asia annually.
While the Indian Ocean and its critical global sea-lines-of-communication are responsible for more than 80 per cent of the world's seaborne trade in critical energy supplies, namely oil and natural gas, which serve as the lifeblood of any advanced economy.
Submarines are critical to the nation's ability to protect these strategically vital waterways and key naval assets, as well as providing a viable tactical and strategic deterrent and ensure the nation's enduring national and economic security – recognising this, the previously posed questions will serve as conversation starting points.
However, given the geographic area of responsibility Australia will become increasingly responsible for and dependent on, is the RAN and the recapitalisation and conventionally-focused modernisation program for Australia's submarine fleet enough for Australia to maintain its qualitative and quantitative lead over regional peers?
Traditionally, Australia has focused on a platform-for-platform acquisition program – focused on replacing, modernising or upgrading key capabilities on a like-for-like basis without a guiding policy, doctrine or strategy, limiting the overall effectiveness, survivability and capability of the RAN.