Another Gottliebsen story from today's Australian
Australia’s patrol boat debacle
A Lurssen-built offshore patrol vessel. Pic: Lurssen
ROBERT GOTTLIEBSEN
Business ColumnistMelbourne
@BGottliebsen
It’s now clear that
the government has stuffed up the $4 billion patrol boat tender.
Normally I would not highlight these sort of mistakes but Australia is embarking on one of the largest naval military ship building programs in the world involving an outlay of around $90 billion — a huge sum for a country that is in budget deficit.
On a per vessel basis we are spending substantially above any other country--- some estimates have the per equivalent vessel expenditure at twice world levels.
And everywhere you look you find that politics have played a role in our naval spending decisions, which boosts the costs and leads to mistakes.
It is as though Australia’s defence policy has been based on the belief that there will be no war so we can play political games. The world situation now looks like it is too serious for political games.
And yet there is also an opportunity. We have a once in a lifetime opportunity to build an industrial base around this enormous program.
That $90 billion expenditure level is almost as big as that of Japan and Korea and larger than the UK, Germany, France, Italy or Spain.
Australia is looking at building two major ships a year which is a huge number given the size of our infrastructure.
Japan is building three major ships per year; while the UK, Germany, France and Italy are each building between 1.5 and two ships a year. The US, with its huge military industrial complex and an industrial base 25 times as big as ours, builds eight ships per year.
We are in the big league and we planned to start with 12 patrol boats, which theoretically would show the world how good we are.
Instead it has shown how bad we are.
Three large groups were invited to tender --- two German companies Lürssen and Fassmer and a Dutch company, Damen. They were all surprised to be told that the first two patrol boats had to be built in Adelaide (the defence industry minister’s home state) and the next 10 in Western Australia, where the government could lose large numbers of seats in the next election. Inevitably that boosted the costs substantially. But worse was to come.
Lürssen was chosen as the winner and in typical German style they had contracted with detailed agreements so that ASC would do the work in Adelaide and Civmec would undertake the work in WA. The whole tender process had taken around two years because design was involved.
Then, suddenly, 24 to 48 hours before Lürssen was to be announced, Lürssen was told that it had to include the listed Austal group in its WA operation (Austal had been a partner in one of the losing consortiums). The Germans were stunned. How would this work?
Only in the worst of third world countries would a defence department pull a stunt like that. But everyone remained silent while defence chiefs claimed the process would be easy. Of course that was rubbish.
Malcolm Turnbull tours Austal’s operations last year with then WA premier Colin Barnett. Pic: Simon Santi/ pool.
Lürssen partner Civmec had acquired Newcastle shipbuilder Forgacs in 2015 and was constructing a vast facility for shipbuilding at Henderson south of Perth. It needed that patrol boat contract.
Including another shipbuilder for part of the contract would destroy the economics. But Austal had the ear of government and as WA’s largest shipbuilder if it missed out it would not be good for votes at the next election.
And so now the defence department has appointed a “mediator” to try and sort out the mess it created. This is really third world. Are we going to keep doing these crazies? If we keep it up we might end up spending $180 billion not $90 billion.
The most obvious WA solution is that Civmec gets paid its full contracted work but only performs part of it, with the rest constructed by Austal.
Maybe there is a better way but already the cost of the patrol boats has been inflated by contracting in two cities for political purposes and now there is to be another boost.
This sort of activity is not just a once-off. We are concentrating a large amount of the $90 billion activity in Adelaide, which involves huge union risks. Shipbuilders around the world spread their activities because they can better tap a variety of skills. And for the frigates we wanted the first steel cut by 2020. (Guess why). If we rush the project we have no chance of establishing an infrastructure and the frigates will be simply IKEA flat pack jobs.
I could go on and write about submarines but that’s enough. The message is clear.
But finally, if China establishes an air base in Vanuatu (or Timor?) it will base its new generation fighters there, which are far superior to our JSF disasters.
The new patrol boats will replace the navy’s Armidale-class vessels.
PS : se tivessem falado com a WS e com a MdG o projecto
NPO 2000 sai-lhes muito, mas muito mais barato, mas as LUVAS dos políticos e afins falam mais alto !!!!
Abraços