Australia’s $60 billion submarine dilemma

If Australians felt blindsided in April when the federal government announced its purchase of an additional 58 F-35 Joint Strike Fighter jets for $12 billion, they’ll want to sit down with a strong cup of tea to contemplate the cost of our future submarine fleet. The new vessels will need to enter service by the early-to-mid 2030s in order to replace the ageing Collins Class submarines. It will be one of the biggest and most expensive infrastructure projects in Australian history, as ambitious as the Snowy Mountain Hydro-electric Scheme or the National Broadband Network.

To discuss the project, the Australian Strategic Policy Institute (ASPI) hosted a conference, The Submarine Choice, over two days in April. It was “the most knowledgeable gathering ever held in Australia to do with submarines”, said ASPI’s executive director, Peter Jennings, and there was not an empty seat to be found in the Federation Ballroom of the Canberra Hyatt.

The defence minister, David Johnston, opened the conference and stated clearly the difficulty Australia faces in considering its future submarine options. What we want, the minister admitted, is a conventional submarine (one powered by diesel-electric motors), with the power, speed and range of a nuclear submarine. Such a boat doesn’t exist. Nor, as the then chief of navy, Vice Admiral Ray Griggs, pointed out in his speech, has Australia even begun to acquire the infrastructure or invest in the training needed to support nuclear-powered submarines.

As a senior defence consultant told me, Australia has the only navy in the world that flogs its diesel submarines thousands of kilometres across the ocean – and then goes on patrol. Designers of conventional subs, such as the Swedes and Germans, have experience with shorter ranges: designing a sub for the Baltic Sea is like designing a sub to do laps around the Gulf of Carpentaria.

Minister Johnston stressed that our future fleet would have to be regionally dominant, superior and also affordable. He acknowledged that these were difficult goals. Whether they are mutually exclusive depends, I suppose, on the government’s definition of “affordable”.

ASPI estimates 12 future submarines will likely cost around $36 billion; the chair of the German naval vessel and submarine manufacturer ThyssenKrupp Marine Systems (TKMS), a major sponsor of the conference, gave a figure of $20 billion. The TKMS estimate is a “sailaway” price, however – a dollars-per-tonne base amount that doesn’t include design or defence project-management costs. Neither estimate includes the cost of supporting the subs throughout their lifespan, which will double or triple the price.

Having said that, the figure of 12 submarines was plucked from the 2009 Defence White Paper and reiterated in the 2013 White Paper. It’s unclear if anyone in the navy or the current government wants 12 subs, and currently there aren’t crews for them. The more likely number is six.

So why submarines, and which submarines for Australia? As long as advances in technology don’t render submarines too much easier to detect (a concern raised by Dr Andrew Davies, an ASPI analyst), why submarines is easy to answer.

As Griggs said, “Our submarines provide us with strategic weight in a way that no other ADF [Australian Defence Force] asset … does.” He meant that submarines are such potent weapons that they change the behaviour of other nations. As we consider their direct cost, he added, we should balance it with the investment imposed on other nations to counter them. Clearly other nations agree: there is a sub-buying frenzy going on in the Asia-Pacific, and Vietnam, Thailand and even Bangladesh are among the countries involved. More than half the world’s submarines operate in the region through which all of Australia’s maritime trade passes.

“Australia does indeed have a choice, and that choice is to be a relevant maritime power or not,” said Admiral Harry B Harris Jr, commander of the US Pacific Fleet. Harris was speaking at the conference dinner, held in the Anzac Hall of the Australian War Memorial.

Harris continued with a frankness that nearly caused his audience of admirals to choke on their entrees: “I’m concerned by the aggressive growth of the Chinese military, their lack of transparency and a pattern of increasingly assertive behaviour in the region.” Events since then have only heightened the sense of tensions building towards overt conflict.

Critical decisions need to be made by this time next year to avoid a gap between our current and future submarines. From the selection of the design to the first cutting of steel for the hull, there will need to be at least eight years of design and drafting. Each sub will take a further five years to build. By the time the future sub is launched, the Collins Class subs will have been in service so long it would be as if Australia’s AE2 sub, in service at Gallipoli, had continued until the end of World War Two. As Andrew Davies points out, “Forty years ago, a high-tech car had seatbelts.” Every aspect of the submarine must be able to be upgraded to remain relevant for its full service life.

In his conference speech, Professor Thomas Mahnken of the US Naval War College contended that the most important characteristic of our future submarine would be “interoperability”. What he meant was that Australia should regard the ability to work with the US Navy as the most important consideration.

This may mean we can only partner with the Swedes, building on what’s been learnt from working with their former submarine designer Kockums on the Collins Class subs. This is because the US has already allowed some of its submarine technology and data, among the most tightly held defence technology in the world, to be incorporated into the Collins, something they’re extremely reluctant to allow with other builders.

The more speeches I heard, the clearer it seemed that there is a looming contradiction between Australia’s oft-stated goal of regional technological superiority in defence and our decreasing investment in training and research. Defence capability is a complex, high-order expression of a nation’s scientific and technical strength – it’s not something that can just be bolted onto a shaky educational and research foundation. Changes to higher education funding, which may make engineering degrees very expensive, will further hollow out this capability. Currently we do not even have enough draughtsmen to produce technical drawings for submarine design.

The most dramatic moment of the conference came five minutes before its end and drove home the urgency of submarine politics. The incident was a tense exchange between the Swedes and the Germans over Kockums, which was sold to the German-owned TKMS 15 years ago.

Commenting from the conference floor, retired Swedish rear admiral Göran Larsbrink said that Russian president Vladimir Putin’s adventurism in Ukraine had strengthened the desire of the Swedes to renationalise their submarine industry.

The Swedes were nervous about the resurgence of hard-edged military power in Europe, and on 8 April, the very day of the conference welcome reception, the Swedish military had raided the premises of TKMS in Malmö, Sweden, and taken back sensitive submarine technology. Larsbrink tried to explain his government’s unprecedented actions, suggesting the Swedish government now regretted the sale of Kockums to the Germans. The chair of TKMS publicly accused the Swedish government of using “force to deprive us of our basic ownership rights”. This heated exchange raised eyebrows in the Department of Defence and the minister’s office. On 29 June the Swedes finally got their precious submarine builder back when Saab bought Kockums from TKMS.

No doubt causing angst to European submarine builders at the conference, Minister Johnston expressed interest in a quick-fix third option when he praised the Japanese Soryu sub as the “best conventional submarine in the world”. Since the Australian and the Japanese prime ministers signed a trade agreement during Shinzo Abe’s visit in early July, the media has breathlessly suggested the possibility of off-the-shelf purchase of Japanese submarines. The Australian submariner community is highly sceptical, as Japanese subs do not meet Australia’s unique requirements, and their much-touted air-independent propulsion is actually Swedish technology that would have to be bought directly from Sweden. The supposedly silent propulsion system, according to these submariners, also includes a modified French engine that is already out of date. While the upside of a Japanese agreement might include sharing valuable technical data, the Soryu subs are not the easy solution the minister is looking for. For Australia, the submarine choice remains tantalisingly elusive.

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