In a surprise move the Australian Government has selected DCNS of France to build the next generation of submarines, to replace the current Collins class, which have served the Royal Australian Navy since 1996. Prior to announcing the submarine deal, Prime Minister Malcolm Turnbull stated that a strong Australian defence industry was one of the critical components of his government’s long-term economic transformation into a high-tech economy. Last year, the Liberal-National government selected three bidders, DCNS of France, Japan’s Mitsubishi Heavy Industries and Germany’s ThyssenKrupp Marine Systems (TKMS) as finalists in the tender competition to supply the Royal Australian Navy’s project, SEA 1000, with 12 new, conventionally-powered submarines, to be built locally with the cutting of steel ready for sea trial by 2022. The vessels will begin to replace the Collins class from 2026 and will be built and commissioned over the following decade. The announcement today of the French submarine deal also included further details of the wider expansion and re-equipping of the Australian Navy. An offshore patrol vessel (OPV) programme of 12 vessels costing more than $3bn is due to begin from 2018 and nine new billion-dollar Frigates to replace the current Anzac Class will start being built by 2020.
“The Australian submarine programme was to be the launch party of the new Japanese defence export sector, which is considered to be an important part of Abe’s ‘Three Arrows’ vision”
The winning proposal by French company DCNS was for an evolved non-nuclear version of its 97-metre, 5,000-tonne Shortfin Barracuda Block 1A design. This submarine uses a revolutionary pump jet propulsion system instead of traditional propellers and will be quieter than other conventional submarines. The future vessels will be locally built at the ASC shipyard in Adelaide, South Australia, thus creating a much-needed economic boost to that state’s ailing industrial fortunes. South Australia’s industrial sector has fallen on worryingly hard times with the forthcoming closure of the large General Motors plant that produces the Holden range of cars, and a shipbuilding sector that seemed precarious without any consistent orders coming in, past the completion of the Navy’s new Aegis destroyers. The new submarine deal will now give certainty to both local and industry, providing 2,800 jobs around Australia with the bulk of them at the ASC shipyard. It is hoped that many of the soon-to-be laid off GM workers will find jobs within the revitalised shipbuilding programme. It will also help in the re-election of the Liberal-National Coalition that may have otherwise been crucified at the ballot box by South Australians in the coming July 2, 2016 general election.
The selection of the French firm DCNS will be a blow to not just the Japanese defence sector, but also to Japanese Prime Minister, Shinzo Abe. The Australian submarine programme was to be the launch party of the new Japanese defence export sector, which is considered to be an important part of Abe’s ‘Three Arrows’ vision to build a beautiful and prosperous Japan that has a ‘normal’ defence and security posture like its trading allies. The Japanese Soyru deal would have been the icing on the policy change cake for his personal advocacy towards the re-interpretation of Article 9 of the Japanese Constitution banning foreign military sales and engagement.
“The avoidance of making an already complex project even more complex and protracted may have won the day.”
The Japanese consortium, led by Mitsubishi Heavy Industries, tendered their bid on an evolved version of the Soryu Class submarines currently in service with the Japanese Maritime Defence Force. The Soryu Class, at 89 metres long, carries a crew of 65 and has a range of over 6,000 nautical miles. Most defence industry insiders were predicting a win for the Japanese and their highly rated design. The vessel is reported to have outstanding dive characteristics due to its advanced metallurgy. During the last three years the Soryu class was considered to be highly favoured by former Australian Prime Minister Tony Abbott and his group of defence advisors. They, along with Mr. Abe, believed that the submarine deal between the two nations would provide the Western-Pacific region with a jointly developed, high quality and globally capable submarine type that would contain the rise of an expansionist China. Abe and Abbott planned for a number of long-term synergies around future technology transfers and the submarine deal was to be the template for further collaborative work. They believed that by working together they would be able to keep both countries ahead of the pack technology-wise with respect to the maritime security within the region. For Japan it was also an important third technical and security partner in which it could triangulate and reinforce its long-standing relationship with the United States. The rebuff of Japan by the Australians though a commercial and political setback will not damage the strong relationship long-term. What it does do is remind Japan that defence exports are a tricky, competitive and politically nuanced endeavour. If Australia had bought the Soyru-Class vessels, it would have been a huge boost to the credibility of their fledgling defence export sector. The Australians are close US allies and usually buy top-shelf US military equipment. For the Australians to buy Japanese would have been a significant endorsement and thus would have assisted Japan in its export sale push, not just for ships, but for other military equipment that it now wishes to sell abroad.
Both countries are two of Washington’s key allies in the Asia–Pacific region and the possibility could be raised that the real politique of a possible Japanese buy would have risked antagonising China, Australia’s top trading partner. However, those sentiments aside, what may be the real reason for the failed bid is that the Soyru design, though extremely capable, was designed around Japanese requirements in terms of space and endurance. The average Australian submariner is physically larger than the average Japanese, and having to redesign all the ergonomics inside the Soyru may have seemed too difficult when the French offered a design with both comfortable habitation spaces and the tasking endurance that the Australians required. The avoidance of making an already complex project even more complex and protracted may have won the day.
“Of course, many would ask why Australia needs 40 billion dollars worth of submarines.”
It is also possible that both the Japanese and German tenders may have failed to get over the line with respect to value for money and the ability to create the kind of industrial offsets, employment opportunities and production synergies that the Australians were politically looking for. Nevertheless, it is my view that the French DCNS Barracuda design finally won out because a couple of significant factors that may not seem initially apparent, Firstly, it was 25% larger in displacement than the other bids, therefore initial size and the allowance for specification upgrades over time must have been the final overriding factor that sunk the Japanese and German bids. Secondly, the other factor that may have also swayed the tender towards the French winning is that submarines are used more and more for the clandestine deployment of Special Forces. This may have been a critical capability component of the Australian submarine project that was not well enough addressed by the Japanese and German tenders. This is an area of military operations that the French would have had far greater experience with than the Japanese and Germans who are politically self-restricted in this area.
“the only question now remaining is whether or not the French can make this $40-billion deal work.”
Of course, many would ask why Australia needs 40 billion dollars worth of submarines. The nation has a huge EEZ and is a veritable treasure chest of natural resources. As a trillion-dollar economy it is essential that this is protected. Australia is a maritime trading nation with over 90% of its imports and exports arriving by sea and it sees submarines as offering the most effective deterrent and defensive capabilities of any conventional weapon system. Just as significantly, submarines are an important intelligence gathering capability enabling the country to generate intelligence traffic, not only for itself but also on behalf of its ‘5 Eyes’ partners and other selected defence allies, thus providing another layer of security through having advanced situational awareness. Though the submarine will be French and built in South Australia, it will have its combat systems and advanced intelligence gathering capabilities provided by the United States.
Unlike most western countries, the military is not a marginal, distasteful, almost taboo subject amongst the political classes and the wider public of Australia. Yes, there is dissent from the far left of the political spectrum about the morality of maintaining a defence force and defence industry within Australia, but that has not resonated across to the wider public or voting electorate. The sustainment of a local defence industry directly translates to employment and industrial development. The Australian public seemingly understands this. Defence policy usually gets bipartisan support from both sides of the house with current opposition Labour politicians generally endorsing the new submarine announcement. In fact, many are trying to claim some credit for the job creation it brings their union members. Furthermore, there is considerable pride taken by rank-and-file Australians in their nation’s military capabilities, which place it right at the top of the ‘middle power’ list. The French deal will consolidate that. However, the only question now remaining is whether or not the French can make this $40 billion deal work.
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