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Has PM put Australia on the hook to finance struggling UK, US submarine projects?

by Marcus Reubenstein | Sep 23, 2021 | Government

“Almost comical”. Experts lambast Scott Morrison’s “crazy” AUKUS deal to buy nuclear submarine tech from parlous UK and US programs. Marcus Reubenstein finds a real prospect Australia will be used to “underwrite” the foundering foreign submarine industry.

Twenty-five years of ongoing maintenance delays for nuclear submarines, chronic shortage of both parts and skilled workers, under capacity at shipyards, and attack class submarines missing from deployments for up to nine months. These sound like potential problems for Australia’s future nuclear submarine fleet but they are actual problems right now confronting the US Navy and its fleet of 70 submarines. 

The US is at the cutting edge of nuclear propulsion. It has the largest and most sophisticated submarine fleet in the world, its first nuclear submarine was commissioned 67 years ago, and the US has literally decommissioned twice as many nuclear subs as Australia is planning to buy. 

If the US cannot manage to keep its fleet in the water, how can the Morrison government commit up to $100 billion of taxpayer money to secure nuclear submarines and guarantee they will be always operational and ready for deployment?

Professor Hugh White, ANU Professor of Strategic Studies, former Deputy Secretary of Defence and an eminent figure in strategic policy, wrote in The Saturday Paper, “The old plan was to build a conventionally powered version of a nuclear-powered French submarine. It was crazy.”

“The new plan—to buy a nuclear-powered submarine instead—is worse”. 

Says White, “There is a reason why only six countries, all of them nuclear-armed, operate nuclear powered subs.”

The sales pitch is underway 

Last week’s AUKUS announcement was nothing more than PR stunt in Australia, with the government merely committing to spend the next 18 months deciding what to buy—which conveniently kicks any actual the decision far enough down the road to avoid the next federal election. 

The ripples of the announcement, however, reached British shores in double-quick time. Just two days after the AUKUS alliance UK Defence Secretary Ben Wallis announced a $320 million (£170m) grant to be shared between BAE Systems and Rolls Royce to develop technology for Britain’s next generation submarines. 

According to Department of Finance figures, In the past twelve months BAE Systems has collected $1.88 billion from Australian taxpayers. The Astute class submarine, touted as one of the two options Australia is considering, is manufactured by BAE Systems. 

US Naval analyst, and Forbes Defense columnist, Craig Hooper predicts AUKUS could give the US Navy a big shot in the arm as well. He says a deal with Australia could effectively underwrite major improvements to the US Navy’s outdated submarine maintenance facilities by supporting “America’s decade-long, $US25 billion ($34.6 billion) effort to refit the U.S. Navy’s four aging public shipyards. With yard repair costs already high, America would go to great lengths to welcome any additional bidders for shipyard capability improvements.”

US subs in dry dock

In a report published six months ago, the US Congressional Budget Office (CBO) found: “The Navy’s four shipyards have experienced significant delays in completing maintenance on its submarines (all of which are nuclear-powered).” 

“Two factors have been the primary causes of delays in the Navy’s shipyards: The amount of maintenance that shipyards must perform in each overhaul has increased, and the Navy has not hired enough new workers to keep pace with the workload.”

The CBO projects scheduled submarine maintenance will fall behind in 25 of the next 30 years.

According to Hooper, “Unless the U.S. moves to fix things right now, America’s modern submarine fleet—soon to be full of new ballistic missile and attack subs—will rot away, pier-side.”

He calls the Navy’s submarine maintenance estimates “woefully bad” and blames private military contractors who are pushing to build their own maintenance facility. A proposal, he says, that “bears all the hallmarks of a tired lobbyist-driven campaign, pushing Congress towards a timid set of pricey half-measures.”

Should Australia go down the nuclear sub path what choice will it have other than to outsource the fleet’s maintenance?       

Hooper also blames the internal bureaucracy and politicking of the US Naval leadership, writing in Forbes, “The rot is deep; the U.S. Navy has underestimated submarine maintenance needs for more than two decades. 

“Until about sixteen years ago, the Navy used artificially low lifetime maintenance estimates to help keep the Virginia class submarine sold in Congress… the Navy still hasn’t come to grips with this massive—and likely deliberate—maintenance oversight.”

Her Majesty’s sub optimal fleet

Britain, touted as the alternative nuclear submarine supplier to Australia, has problems of its own. The Royal Navy operates ten submarines, only four of them were designed and commissioned this century. 

Like their American nuclear counterparts there are systemic problems keeping these subs in service. Last year, the chair of the House of Commons Defence Select Committee, Tobias Ellwood, reported two of the Royal Navy’s four Vanguard class submarines had been ‘out of the water for more than a year’. 

In May 2020, UK defence analysis website, Military Balance Plus reported “One of the submarines concerned is HMS Vanguard, in a scheduled LOP (Long Overhaul Period) since December 2015.  Originally planned to last three and a half years, the extensive refit has overrun by about a year so far and Vanguard is unlikely to re-join the fleet this year as previously intended.”

Launched in 1992, the HMS Vanguard is the oldest submarine in the British fleet. In 2009 it collided in the Atlantic with a French nuclear submarine, whilst in 2012 there was a leak in the vessel’s nuclear reactor, a fact the UK government concealed for two years—that leak cost $227 million to fix.   

Four months ago it was reported that the UK Defence Ministry had ordered a review into the delivery of the new Dreadnought-class submarines, due to enter service in three years but now not expected to be delivered until the next decade. To date that program has already consumed its entire contingency budget of almost A$19 billion (£10 billion).

That report also indicated significant delays to the BAE Systems built Astute hunter-killer submarines, the same class of nuclear submarine being touted for Australian as part of the AUKUS deal.

Hans Ohff, is a visiting research fellow at The University of Adelaide and a former CEO of the Australian Submarine Corporation has quoted as saying the AUKUS announcement is a “hocus pocus” deal. 

He calls it, “Almost comical, if it wasn’t so serious—Prime Minister Morrison and his Defence Minister have blown up the bridge behind them.”

Marcus Reubenstein is an independent journalist with more than twenty years of media experience. He spent five years at Seven News in Sydney and seven years at SBS World News where he was a senior correspondent. As a print journalist he has contributed business stories to most of Australia’s major news outlets. Internationally he has worked on assignments for CNN, Eurosport and the Olympic Games Broadcasting Service. He is the founder and editor of China-focussed business website, APAC News.

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