Lynda French · @LyndaFrench19
11th Dec 2019 from TwitLonger
Submarines project a $220bn disaster
Very rarely in journalism do you come across a potential disaster that could jeopardise the nation for a generation.
I have access to information that has made me realise that the proposed submarine project is not a normal mistake that can be managed — it is a national disaster.
I invite the three most senior members of the cabinet — Scott Morrison, Josh Frydenberg and Mathias Cormann (I know and respect all three) to read what I have discovered and then use non-defence people to check me out.
I do not believe my whistleblower is wrong because he or she is acting in the national interest, particularly in the light of the recent events at NATO and in Turkey.
But to convey the sheer magnitude of this disaster I have to take you back to the Turnbull government’s decision to go with the French submarine plan. Previously former PM Tony Abbott had a nodding agreement with the Japanese prime minister to buy the Japanese submarine. However, down the line staff in the Japanese submarine operation did not want to do such a deal and so undermined the efforts of those at the top. The Japanese ceased to be a contender. The Germans became hot favourites and offered Australia an industrial network to support their vessel.
But the French brilliantly presented a most exciting and tantalising concept — Australia would join them to develop a new submarine and together we would be regional leaders in submarine development. The negotiation was brilliantly masterminded by the French. They concluded that the legendary and tough head of the French Naval industrial operation Hervé Guillou was the wrong person on push the deal through the Australian defence establishment.
So, Marie-Pierre de Bailliencourt was made his deputy and was given the job of selling the deal to Australians. She did the job superbly.
When the deal was concluded Hervé Guillou took control and Marie-Pierre de Bailliencourt went elsewhere.
I have now discovered that the deal the French and Hervé Guillou put on the table was very different to that proposed by Marie Pierre de Bailliencourt.
Defence officials may dispute this but, in essence, under the new deal the French do most of the designing and if we don’t like it we pay for the alteration. This was graphically illustrated when we wanted different lighting to that proposed by the French. Different lighting could be arranged by the French but Australia would pay. The idea of an exciting joint development has been trashed.
But it gets much worse.
Our defence systems are linked or at least compatible to the United States. The US defence and security people have never trusted the French since US defence secrets were leaked to Russia during the reign of President de Gaulle. That distrust has grown in the decades that followed and intensified when the base design of the Australian submarine was leaked prior to the deal. The Americans demanded that it only supply its combat system to the project if the US had a separate deal with Australia.
And so, the submarine development is two deals — one for the basic design between Australia and France and one for the combat system between Australia and the US. And the French will have restricted access to the combat system in the submarine they are designing.
It might have worked had the original French proposal of a true partnership been carried out.
but it is a hopeless arrangement when it is basically a French project. And remember this is a high-risk new technology submarine so with two “warring” suppliers there will be an endless blame game.
Australia might have hoped that, over time, the US distrust of France would fade. Last week’s NATO clash between Presidents Trump and Macron showed the distrust is getting worse, not better. And the US is very sensitive to its technology which was illustrated when Turkey bought antimissile systems from Russia. The US immediately cancelled its Joint Strike Fighter deal with Turkey.
The Australian government announced in 2016 that it would be paying $50 billion, inflation protected, for the submarines. By 2018 that had blown out to $90 billion.
At that time, with help, I estimated that the final costs over the life of the submarines, including maintenance etc, would be around $225 billion.
I expected that defence chiefs would deny such an incredibly high estimate. Two years later they have now confirmed my estimate, which makes me suspect that the real costs are much higher. Given the looming chaos that I have described we conceivably could be looking at $400 billion to $500 billion, although that is pure speciation.
In the original deal the first submarine would be operational in 2034 but the contract is already six months late and I am told the real delay is around 18 months to two years. Given what is ahead I think 2040 is an optimistic estimate for the first operational submarine.
In the next 15 or 20 years there will be incredible developments in warfare and technology.
Already we may have missed the lithium battery which the French are offering the Dutch.
Josh Frydenberg is right to be proud of his budget surplus. But he is sitting on a $225 billion disaster.
Frydenberg, Scott Morrison and Mathias Cormann can escape the contract with what in comparison to $220 billion is a token break-free. And there are better options.
https://www.theaustralian.com.au/nation/defence/submarines-project-a-220bn-disaster/news-story/ed563e92a735dfea84f8ed1adede153b