Our submarines to be built overseas?

On September 8, 2014 Tony Abbott reignited South Australian concerns that Australia's long anticipated future submarines would be built overseas. These submarines might be built more quickly and cheaply in Japan or Germany. Jay Weatherill, the Labor Premier of South Australia, is adamant that submarines should again be built in his state - following the Collins. If the submarines are built in Japan they would almost certainly be Soryu class submarines. The prospect of assigning the project to Japan brings up many issues including: fewer job opportunities for Australians; only small cash injection for South Australia's economy; and (dealt with below) Australia being Japan's first major defence customer as well as the Soryu's range limitations.

The expectation that Japan will be chosen is also partially due to a visit of 16 Japanese submarine technicians to the Australian Submarine Corporation's (ASC) submarine and shipbuilding facility at Osborne (South Australia) on August 26, 2014. The reason for the visit was not explained, but may be the beginning of a study regarding ASC's ability to maintain the future submarines and/or ASC's ability to provide some components for the Soryu production line in Japan.

I raised many procurement issues in Future submarines: Australia's $40 billion risk of July 21, 2014 on On Line Opinion including "It would be hugely wasteful for politicians, admirals and officials to again make hasty choices that again steer this country into a Collins disaster". Its better to gradually plan to build future submarines overseas rather than make hasty decisions that waste any savings.

It is possible that Abbott has intentionally made the submarine issue a contentious diversion from other issues bedevilling his Government. Abbott appears to be successfully refocusing public attention away from his weaknesses (the Budget and Palmer's power) to issues advantageous to his new image as "the National Security Prime Minister" who has been addressing Iraq-terrorism and Ukraine-MH17. Abbott appears to be now also pushing a theme along the lines, "Japanese built submarines will save taxpayer money versus extravagant Labor politicians and unions in South Australia."

If the Japanese Government finalises a submarine deal this will be Japan's first major arms export program. As this would be a first the Japanese Government and the Soryu's builders (Mitsubishi Heavy Industries and Kawasaki Heavy Industries) will need to develop new regulatory, industrial, political and cultural processes. This involves risks for Australia. Kym Bergmann wrote in ASPI "How would [the Australian crew training for the Soryu] be managed - not a trivial matter - especially as Japan has never before exported a submarine? Even providing manuals in English for the tens of thousands, possibly hundreds of thousands, of individual pieces of equipment that make up a submarine would be a hellish job." The gulf between military engineering jargon in Japanese and English is great.

The Soryu's comparatively short range may also present problems. Australia was careful to make the Collins a very long range submarine for our mission needs including a comparatively high speed (to-from) 6,000 km transit component. The Soryu has a far shorter range with no such transit component. To make up this deficiency any Australian Soryu may require mid-point refuelling with all the extra costs in port facilities and drop in operational security.

Australia may be hedging with a German alternative if the Japanese deal cannot be concluded or if a Japanese deal collapses mid-project for political reasons (on that see paragraph 6 of July's OLO article). In that case Germany's not yet built, on the drawing board, HDW 216 (built by ThyssenKrupp) is what Australia might buy. Germany has by far the most success and experience in exporting submarines. But Germany's submarines are much smaller than what Australia wants. Australia wants longer endurance (effectively a larger crew) and higher war-load (many torpedos, missiles and mines) than can be fitted into a small design. Australia has bitter experience of the problems involved in attempting to scale up the Collins from a much smaller European submarine design. A major defence purchase from Germany also brings none of the regional strategic alliance benefits that purchase from Japan brings.

All submarines have their strengths, weaknesses and unknowns. The Soryu looks appropriate but Australia has very little experience of their operational performance. Australia is much more familiar with German submarines but no current German submarine fits the bill. Japan wins on regional alliance links but Japan might change its mind for political reasons - while Germany is a proven exporter on quantifiable commercial grounds. The Abbott Government should now be prudent in gradually moving to the final selection.

Even if Abbott makes the right decision taxpayers will probably be paying $20 Billion upfront for 10 foreign built submarines. This is much less than the possible $45 Billion cost of building them here. While Abbott may be saving money, uncertainty, control and risk over the next 40 years of the future submarine program should still be considered.