Asia Defense | Security | Oceania

Australia’s Submarine Program Faces Delays

Australia’s Future Submarine Program has missed two key contractual milestones, according to an audit report.

Franz-Stefan Gady
Australia’s Submarine Program Faces Delays
Credit: Australian Submarine Corporation

The Royal Australian Navy’s (RAN) SEA 1000 Future Submarine Program has missed two key contractual milestones, the Australian National Audit Office (ANAO) reported on 14 January.

The two milestones were a “Concept Studies Review” and a “Systems Requirements Review.” The review was postponed by the Australian Department of Defense (DoD) over concerns about design changes proposed by French state-owned submarine builder Naval Group and whether they would meet the Navy’s operational requirements. 

The DoD notified the RAN in September 2019 that the design schedule had been extended by nine months. 

The “Systems Requirement Review” kicked off on December 5, 2019, five weeks behind schedule. According to the DoD, the five-week delay is recoverable by the next major milestone, the Systems Functional review, scheduled for January 2021.

“The program is currently experiencing a nine-month delay in the design phase against Defense’s pre-design contract estimates,” according to the ANAO report. 

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“As a result, Defence cannot demonstrate that its expenditure of A$396 million on design of the Future Submarine has been fully effective in achieving the program’s two major design milestones to date,” the report added.

Australia and France concluded an intergovernmental agreement (IGA) for the construction of 12 Shortfin Barracuda Block 1A diesel-electric submarines (SSK), christened the Attack class, a diesel-electric derivative of the Barracuda-class nuclear attack submarine, in December 2016.

The Australian government and Naval Group signed a strategic partnership agreement (SPA) in February 2019 nearly 16 months behind schedule. As I explained at the time: 

The conclusion of the SPA was preceded by a two-year wrangle over contract details. Negotiations for the SPA kicked off in 2017 and were expected to be concluded by September 2018. However, various disagreements over intellectual property and warranty periods for defects, as well as possible production delays, caused the SPA signing date to be repeatedly pushed back.

Under the SPA, the 12 submarines, except for a number of specialized parts, will be built in Adelaide in South Australia, home to Australian government-owned shipyard Australian Submarine Corporation. Construction of the first sub is slated to begin in 2022 with the first SSK delivered to the RAN by the middle of the 2030s. 

Given that the RAN’s Collins-class SSKs are expected to retire by 2026, the service life of the sub fleet may need to be extended and some of the subs  retrofitted and upgraded.

“We are yet to fully determine how many of the boats we will upgrade,” Royal Australian Navy Chief Vice Admiral Mike Noonan was quoted as saying in Australian media at that time. “We’re expecting that we will upgrade at least five, and the work around determining the scope of the upgrade has begun but has not yet been fully decided.”

The DoD continues to insist that the recent delays will not affect the delivery of the first-of-class SSK in 2032 or 2033.

Estimated acquisition costs of the 12 SSKs are around $55 billion, according to a November 2019 estimate of the DoD.