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May 02nd 2016 print

Geoffrey Luck

Le Fix Was In

The $50 billion decision to go with French submarines ignores the lessons of history, which suggests that buying a drawing-board concept, rather than evolved design, leads inevitably to compromised performance and horrendous cost overruns. Hindsight suggests a contract that was pre-ordained

sub smallLet’s start with the central point: the Turnbull government has perpetrated a colossal fraud on the Australian people with its decision to buy a fleet of conventionally-powered French submarines.  That flows from the second point – the much-vaunted CEP, the competitive evaluation process was a sham, because the French company DCNS was the preferred builder from the beginning of the process.

The CEP, it will be remembered, was set up only in February last year, in political surrender to pressure from South Australian Liberal parliamentarians who feared losing their seats if Japanese submarines were built offshore, quickly and cheaply. It was a rush job to legitimise a choice of boat that would not antagonise China, the unions or the Australian Submarine Corporation .  No matter that it would be a white whale.

Whether buying military hardware or setting up a royal commission, the ground rules are the same: write the terms of reference to guarantee the result you want. So the tenderers – Japanese, German and French — were required to offer a submarine design (not an actual boat) which met four criteria:

  •  With a range and endurance similar to the Collins class submarine (11.500 nautical miles).
  •  With sensor performance and stealth characteristics superior to the   Collins class submarine.
  •   To incorporate the combat system and heavyweight torpedo developed jointly by Australia and the U.S.
  •   To be delivered in time to avoid a capability gap (after the retirement  of the Collins class submarines in 2026).

The specification acknowledged that there were no off-the-shelf options that met Australia’s unique submarine capability requirements. That should have sounded the first warning: we were about to buy and/or build another orphan, like the Collins boats. But that was overlooked in the enthusiasm that The Future Submarine Program (SEA 1000) would deliver for Australia “an affordable, regionally superior, conventional submarine capability, sustainable into the foreseeable future.”

What we have been saddled with for our $50 billion is the promise of a flotilla of non-existent, obscenely expensive, ordinary submarines that will be slow to arrive, obsolescent when the first is launched, and completely irrelevant by the end of its design life in 2060. They will never be regionally superior.

The problem, inferred from the various White Papers on defence, is the old one, the tyranny of distance. Australia doesn’t defend its shores with submarines; it needs them to range far into the Pacific and Indian Oceans, exercise there with our allies, loiter off foreign countries gathering intelligence and, if necessary, attack shipping or even land targets half a hemisphere away from home ports.

No other country in the world tries to do this with conventional submarines. The convention is that long-range now requires nuclear, but Australia bucks logic with its irrational antagonism to nuclear technology. That’s why the Collins boats were a one-off; why almost every diesel-electric powered submarine built by Japan, Germany, France, Spain and Russia are around 2000-3000 tons, carry a crew of 30-odd and can’t make it across the Atlantic without being refueled on the way.

David Johnston is remembered (unfairly) as Defence Minister for his throw-away remark that South Australia’s ASC couldn’t be trusted to build a canoe. He was comparing its skills base with what he had seen in the Japanese yards building Soryu class boats. With hulls of special steel, incredible stealth capability, and an AIP (Air Independent Propulsion) system of fuel cells enabling it to remain submerged for two weeks, the submarines were probably the best diesel boats in the world.  Johnston was convinced they could easily be stretched about ten metres in length and from 3000 to 4000 tonnes to met our needs. He was also convinced we didn’t need twelve of them.

Two years ago, with few people noticing, the powerful French company Direction des Constructions Navales Services (DCNS) took the decisive step that would win it the contract. DCNS was building six nuclear-powered submarines, its new Barracuda class boats that would be ideal for the Royal Australian Navy’s purposes.  100 metres long, 4,765 tonnes, unlimited range, with pump-jet (shrouded propeller) propulsion, underwater endurance of 70 days, limited only by food supplies, the first boat, Le Suffren, would be launched in 2017 at a cost of A$1.9 billion.

But if the Australians were so intent on having a conventional submarine, DCNS would make them one. The biennial Paris EuroNaval is the world’s biggest naval defence and maritime exhibition. In 2014, the company startled the world’s navies with its concept design, SMX Ocean, in effect a diesel-electric version of the Barracuda. A little shorter than the nuclear boat, and at 4,700 tonnes a little heavier than Australia required, Ocean offered a range of 34 weapons: torpedoes, anti-surface missiles, surface to air missiles, cruise missiles and mines. It would have an operating depth of up to (or down to) 300 metres, and be capable of launching UUVs (underwater robots) and UAVs (aerial drones). It showed that France could meet a specification not yet written.

DCNS CEO Hervé Guillou, even ventured that such a vessel could be of interest for Australia’s future submarine requirement, as it had a long range of 18,000 nautical miles at 10 knots and could stay out for 90 days. Guillou, the portly gentleman at right, is pictured below last week in Paris, grinning like the Cheshire Cat as French President Francois Hollande holds aloft a model of the planned, but entirely undeveloped, Shortfin class

french submarine triumph

That was in October 2014, four months before the CEP was announced. But few people noticed. DCNS’s Australian office followed it up with a scale model of the adaptation for Australia, three metres shorter and 200 tonnes lighter, at Pacific 2015, the International Maritime Exposition in Sydney in October that year. Even with its fancy new name, Shortfin, it attracted little public attention.

But the SMX Ocean and the Shortfin were no more than concept boats. Like those mouth-watering sleek ‘look but don’t touch’ designs produced for the Paris Motor Show each year, there was nothing inside the model. The really difficult design work involved in taking out the compact nuclear power unit and replacing it with four diesel engine generators, AIP fuel cells, huge fuel tanks, miles of plumbing, a complexity of pumps and valves had not begun. ‘Conventional’ submarines are a lot more complicated than nuclear ones.

This empty shell is, essentially, what Australia is buying. Slightly modified in length and displacement, but with the internal pressure hull and external lines of the Barracuda class, and its pump-jet propulsor for stealth.  Whether that will deliver the promised stealth won’t be known until the first Barracuda is launched. Just how hollow the submarine contract is, was reflected in the bland official statement:

“The technical evolution of the submarine will be enabled by a strategic government to government agreement between France and Australia.”

On the published estimates, it is going to take the next five years to achieve this ‘technical evolution’  — design the submarine’s innards, in other words – and then another decade to build the first boat. As the early experiences with the Collins class submarines proved, the design and operational challenges involved in diesel boats are profound.  To maintain neutral buoyancy, as the diesel fuel is drawn from a tank, it must be replaced with seawater, yet the two must not mix.As Peter Yule and Derek Woolner explain in their definitive book, The Collins Class Submarine Story: Steel, Spies and Spin, salt water, contaminated fuel and manufacturing defects led to heated disputes between the Navy and the Swedish designers over contractual responsibility for fixing the problems that arose. The authors agree that design and operation of the fuel system was at the heart of the problems.

The Swedes claimed that the crews were not draining the 15 fuel tanks in the prescribed sequence; the Navy found that in the saltier, rougher southern oceans (than the calmer Baltic waters) it was impossible to stop salt water entering the engines. The problem was not completely solved until 1999, five years after the first trials of the Collins.

This particular issue may never arise again, but it illustrates just how complex is a submarine. The lesson the Navy learned from the Collins Class boats was that nobody could have foreseen the problems, or the time and money needed for repairs and modifications. Most likely, it will be the same with the new submarines.

While all eyes were on the competing boat designs for the new Australian submarines, there were other factors which favoured the French. DCNS is 64% owned by the French Government, 35% by Thales, the electrical and electronics systems company that grew out of Thomson-CSF and its acquisition of the British Racal.

In 2006, Thales acquired Australian Defence Industries; now, as Thales Australia, it is probably the major contractor to the defence forces.  The company carries out ship-repair operations at Garden Island Naval Base in Sydney; manufactures the F88 Austeyr assault rifle used by the Army, and makes the Bushmaster military vehicle.  Recently, it won a $1.5 billion contract for 1100 of the new Hawkei light armoured vehicles. So the DCNS/Thales group that will now build and equip the submarines enjoyed what a reasonable person might assume to be the inside track.

Without a published rationale justifying the decision to choose the French tender, there is every reason to believe that the competing German and Japanese boats were never seriously considered in the brief, twelve-month evaluation process.

The German TKMS (Thyssen Krupp Marine Systems) bid offered a 90 metre, 4,000 tonne vessel it designated the Type 216 — in reality a stretched version of its highly successful Type 214 class.  Its submarine-building subsidiary, HDW (Howaldtswerke-Deutsche Werft), is well regarded as the world’s leading designer of conventionally-powered boats, having built 160 for NATO and 22 countries, from Israel to Singapore. TKMS said 85% of the systems to go into the Type 216 were already at sea in existing submarines. The remaining 15% involved “lithium-ion batteries, a methanol reformer for an enhanced AIP system, and a larger version of an alternating current permanent magnetic motor, half the size of an equivalent direct current motor, that uses less energy to produce the same power.”

The Germans also promised 80-day endurance, a “low indiscretion rate” (vulnerable time snorkeling), and a multi-purpose lock for cruise missiles or launching divers or remote guided vehicles. Like the American nuclear submarines, it would have two decks and separate pressure-tight compartments with a capsule engine-room.

But the big advantage for Australia would have been that the Germans could have taken command of the ASC facility to control the digital-design phase, train operatiors and rigorously control costs. It seems they believed they could have built the 12 boats for $20 billion, not the $30 billion quoted in the tender process. (It has emerged that the $50 billion is the cost in future, not current dollars).

As to the Japanese bid, this also would have involved the straightforward development of an existing successful design. The Soryu (Blue Dragon) class, a 3000-tonne submarine that is 84 metres long, was first commissioned six years ago. It was the first Japanese boat to have an AIP system, the latest equipment to enable prolonged submersion. (Air Independent Propulsion, a Swedish invention, involves combining hydrogen and oxygen in a fuel cell to generate electricity, the reverse process of electrolysis).

The Japanese were perhaps over-confident (they too had already coined a name for the Australian boat’s design, Goryu – Australian Dragon); there was scepticism in submariner circles about specifying advanced lithium-ion batteries, one of Japan’s military secrets it had agreed to share. While Japanese submarines were designed for a 19-year life, Australia expected 30 years of service from its fleet. One immediately thinks of Alexis de Tocqueville, interviewing hundreds of people for his book Democracy in America. When he asked a sailor why American ships were not built to last,  the reply was: “the finest ship would be obsolete before it wore out.” Perhaps the RAN and the Defence Materiel Organisation should read up on de Tocqueville.

When the French bid won out, it was conveniently overlooked that by insisting all 12 boats were built in Adelaide, the key requirement to avoid the capability gap had been set aside. The government must stump up $4 billion to upgrade the Collins submarines. By then the oldest of them will have been in service 37 years.

Two years ago I recounted here the criticisms of defence spending in the report of the National Commission of Audit (NCA). It zeroed in on failures in the Defence Materiel Organisation, saying its role as an independent purchase provider had not worked out. Yet the DMO will be our backstop against waste and cost over-runs in the submarine project. The NCA warned then that policies to support Australian industry cost billions of dollars: “At times government will seek to use defence acquisition to leverage support for industry policy. This obscures transparency of industry assistance and corrupts Defence budget processes.”

Discreetly, the NCA did not mention the extortionate costs incurred by mandating local construction for political purposes. Cynics are already suggesting that pork-barrelling with submarines could be an expensive failure. With local build locked in, why would it be necessary to reward the government with votes? There are some important details being overlooked. The government’s decision is a choice ‘in principle’, no contract has been signed. Much hard bargaining lies ahead, to finalise the design, agree on management and on costs. It will be a long, long time before the project has any observable effect on South Australian employment  statistics.

Half a century ago, when Australia was planning to acquire four British “Oberon” class submarines, then-Defence Minister Athol Townley insisted that two should be built in Australia, provoking a lengthy dispute with the Navy. The fighting words of John Gorton, then Navy Minister are as appropriate today:

Defence funds were intended to provide defence for Australia, not to meet the needs of some Australian shipyard owners….Nor will I agree that using defence funds to provide employment for skilled tradesmen at a particular place, or profits for a particular company is as important as using these funds to provide employment of training fighting men in an expanded Navy.”

In 1963 Gorton won. In 2016 Australia has lost.

Comments [3]

  1. Real Oz says:

    The above seems to give some credence to an idea that the sub announcement and the Kidman announcement are connected.
    In short could it be that the subs NOT going to Japan was intended as a sop to the Chinese.
    Then the somewhat unexpected Kidman sale NOT going to the Chinese would be less unpalatable to the Chinese -particularly as they will still get it as bits of Kidman when it is broken up into sufficiently small bits to no longer require ministerial intervention.
    But the Nationals (pre-election) will be OK with this Kidman-no-Chinese deal as will most thinking Australians.
    This is all good for a Turnbull election success – defence going gang busters and Turnbull “shirt fronting” the Chinese in keeping Australia for Australians! Wow!!
    But what about the pissed off Japs and Yanks who wanted this Sub deal to stay within the pacific Alliance? No probs, it was a stupid Abbott deal with the Japs in the first place and again gives Lord Waffle an opportunity to convince the electorate he is NOT just taking all of Tony’s policies to the election.
    Fanciful I admit – though could it be…

  2. Ian MacDougall says:

    The problem, inferred from the various White Papers on defence, is the old one, the tyranny of distance. Australia doesn’t defend its shores with submarines; it needs them to range far into the Pacific and Indian Oceans, exercise there with our allies, loiter off foreign countries gathering intelligence and, if necessary, attack shipping or even land targets half a hemisphere away from home ports.
    No other country in the world tries to do this with conventional submarines….

    With all due respect, Peter (it is otherwise an excellent piece of work) at my last briefing by a senior RAN officer, I was told that the main function of Australia’s submarine fleet is simple: to keep the shipping lanes to and from Australia open. In a conventional and limited war, our most probable potential enemies would attempt what the German navy’s submarine command tried to do to Britain in WW2: sink her supplies coming in by sea.
    Of course, the aforesaid briefing was of limited duration, as it was in the context of an analog TV program broadcast by the (aaargh! choke! hawk! spit!) ABC, and reception was not the best.
    Potential adversaries include Indonesia, where Islamism is reportedly on the rise. It is also the only power which, in the midst of a crisis, an Australian foreign minister saw fit to reassure this nation that we were not about to go to war with. (Alexander Downer, 1999, East Timor.) China is hardly likely, except in the context of a far wider war, in which Australia would likely find herself in a minor (spear carrier) role.
    I am not qualified to comment on the choice of France for the builder, but I think it reasonable to develop the expertise to build (and so more easily repair and maintain) the subs in Australia.
    Penny wisdom can easily become pound stupidity.

  3. gardner.peter.d says:

    After WW1 it was generally perceived that industrial strength was key to winning major wars. The problem is sustaining industry’s capabilities in between major projects. It can be done only by public subsidy in whatever guise proves politically acceptable. This problem is particularly acute for Australia which has a very thin industrial base in any case. In some countries the problem is addressed by funding defence projects partly from budgets allocated to industry support and development.
    Alliances are fickle. Purchasing overseas creates dependencies which could prove critical even in minor conflicts. I don’t know what arguments were made in this particular decision but I can see that dependency on any regional country could prove awkward for Australia. Submarines confined to base for want of spares! Mind you, when I was doing my bit in the Falklands in 1982 I found the French, ostensibly an ally, considered its contractual obligations to Argentina to take priority and assisted the Argentinians in converting their Exocet systems to be launched from land vehicles. America’s position was also awkward to say the least. While it acted as a go-between to avert war, it provided essential assistance in intelligence and come the crunch, the latest Sidewinder missiles, without both of which Britain would have been stuffed. Not to mention access to Ascension Island. While such arrangements were being negotiated, our forces were in poised mode, having rushed to wait. Very awkward.
    None of that addresses the issue of value for money. It is always complex and having little knowledge of this latest decision (although involved for many years in Australian defence industry) I hesitate to make any judgment.