Concerns about the cost, delivery schedule and strategic value of Australia’s future submarine fleet are growing, despite Federal Government assurances the most expensive defence project in the nation’s history is on track.

Key points:

  • A former US Navy Intelligence Officer says Australia should have chosen the Japanese rather than the French to build our future submarines
  • It comes amid concerns around the cost of the Attack Class project, which has increased by almost $40 billion from its initial sum of $50 billion
  • Concerns have also been raised about the design, which features a propulsion technology never used on a conventional submarine

Critics of the Attack Class project have jumped on early milestone delays and a steep rise in the cost of the project from $50 billion to $89 billion now.

The Government insists it’s not a cost blowout as the higher figure is the price over the life of the project, once inflation and exchange rate changes are factored in.

Hugh White is the Professor of Strategic Studies at Australian National University, and he believes that even at $50 billion the price is too high.

“This is over $4 billion a boat,” Mr White told 7.30.

“In world comparative terms, you’d expect to pay about $2 billion for the kind of boat we’re buying.

“So it looks like we’re paying twice what we should be paying, and it’s not clear we’re getting twice as much boat as everyone else.”

More competition required

The 12 new submarines will be constructed in Adelaide by French shipbuilder, Naval Group.

But Mr White said a sole company being awarded the contract made cost increases and delays more likely, and that an overhaul was needed.

“I think the first thing the Government needs to do is reintroduce competition for the French,” Mr White said.

“What governments normally do with these sorts of projects is to contract with two different designers to design and develop the boat so that they are under pressure for performance, price and schedule as they develop their proposal.”

French President Emmanuel Macron inspects the new French Suffren Class nuclear-powered submarine, designed by the French shipbuilder Naval Group. The Suffren Class submarines are a cousin to Australia’s upcoming Attack Class fleet.(AP: Ludovic Marin)

Defence Minister Linda Reynolds declined 7.30’s interview request.

In a statement, a spokesman for the Minister said Naval Group was chosen after a competitive evaluation process, and the $89 billion cost was all-inclusive of design and construction.

“The acquisition cost includes design and integration of the combat system, investment in science and technology, the delivery of initial logistic support, and the design and development of the submarine construction yard and other infrastructure,” the spokesman said.

In November 2019, Defence told Senate Estimates it would cost a further $145 billion to maintain the submarines over their life cycle.

Late on Wednesday, the department told 7.30 the sustainment costs were yet to be finalised.

Independent MP and former submariner Rex Patrick also has questions about the technology being used, including the efficiency of an advanced propeller system called pump-jet propulsion.

Independent MP Rex Patrick is concerned about the technology being used in the new submarine designs.(ABC News)

“I spent about 11 years in the Royal Australian Navy working on both Oberon and Collins Class submarines … I can tell you that stealth is a key attribute of a submarine,” Mr Patrick told 7.30.

“With a pump jet, a conventional submarine operating at low speed will consume its battery at a much greater rate than a submarine with a propeller.

“When it’s recharging, it’s snorting, it’s drawing air from above the water line. It’s running its noisy diesels, it’s detectable by radar, it’s detectable visually.”

‘Defence projects are never easy’

Naval Group is basing Australia’s new diesel submarine on one of its nuclear designs. Defence Analyst Greg Ferguson said that wasn’t a bad thing.

“Defence projects are never easy,” Mr Ferguson said.

Defence Analyst Greg Ferguson said the French design “stacked up best” when it came to Australia’s requirements.(ABC News: Shaun Kingma)

“I think having a reference design means you don’t need to reinvent the wheel. Every time we come up against some sort of engineering problem.

“Our geography demands that we have a submarine with long range, long endurance.

“I think against all of those requirements, the French design stacked up best.”

Naval Group declined to be interviewed, but in response to concerns about lack of local industry participation in the project said that it was strongly committed to maximising local content.

The French shipbuilder was chosen in 2016 over bids from Germany and Japan. Former US Navy Indo Pacific Intelligence Officer, James Fanell, said the Japanese submarine might have been the better choice amid China’s rising assertiveness in the region.

It’s estimated that by 2030, about 300 submarines from around the world will be operating in the Indo-Pacific region.

“This Chinese submarine force is well over 60 submarines,” Mr Fanell told 7.30.

It’s estimated that by 2030, about 300 submarines from around the world will be operating in the Indo-Pacific region.(AP: Li Gang)

“I think you’d become more operationally relevant working with the Japanese.

“They’re an allied partner that’s in the region — whereas France, while certainly allied as a Western democracy, is in Europe — and their forces aren’t really out in the Pacific, like the Japanese are.”

The first new submarine isn’t expected to enter service until the early 2030s.

However, the Defence Minister’s spokesman said the Attack Class submarine would be regionally superior, to meet Australia’s future capability needs and support strategic partnerships in our region.

Mr Ferguson likened criticism of the Attack Class submarines to that levelled at the six Collins Class submarines, which were constructed in Adelaide 30 years ago.

Pictured above are the Collins Class submarines HMAS Dechaineux, HMAS Waller and HMAS Sheean. The Collins Class fleet was also built in South Australia.(ADF)

“It [the Collins Class project] was maligned at the start. It’s now the world’s best,” Mr Ferguson said.

“Unfortunately, the government, the Department of Defence and the Navy, refused to engage with the public or with the media. And they allowed a vacuum to emerge, which was filled by the ratbags and the haters and critics.

“The danger is the same thing could happen on the Attack Class submarine.”