Submarine deal’s sinking feeling – defence doubts revealed

Comment by Peter Roberts

Australia’s $50 billion deal to buy submarines from the French Naval Grup looks to be on shakey ground with the release of a highly critical report from the Commonwealth Auditor-General.

Far from being a great deal, the federal government began planning to walk away from the deal during the torturous negotiation stage, according to the report.

Defence was instructed to examine extending the life of the Collins boats while it searched for a new supplier.

The Naval Shipbuilding Advisory Board asked Defence whether “risks outweighed the benefits of proceeding”.

However then defence minister Christopher Pyne went ahead and signed the deal.

The Guardian reported that since departing the ministry and becoming a lobbyist, Pyne has been specifically warned by the Attorney-General’s department not to work for defence contractors in breach of rul;s.

Lobbying rules prohibit former government ministers from engaging “in lobbying activities relating to any matter that they had official dealings with in their last 18 months in office”.

The Auditor-General’s report found that on key metrics and with the ink barely dry on Pynes signature the Strategic Partnering Agreement is behind on key metrics:

# The design phase of the programme is nine months behind.

# Defence is unable to show whether the $396 million spent so far has been “fully effective”

Concerns have also been raised publicly whether the French intend to provide the level of local opportunities envisaged in building the submarines in Adelaide.

The signing of the contract was greeted in France as a boon for local French jobs. While there have been a number of large contracts let which do include local elements, the skills and technology transfer to be had from the project are unclear.

Opposition defence spokesman Richard Marles told ABC: “On all three measures of this programme — on time of delivery, on the cost of the project, and on the amount of Australian content — the numbers are all going the wrong way.”

Industry minister Linda Reynolds responded: “I welcome the important ANAO [Australian National Audit Office] findings that the Federal Government has established a fit-for-purpose strategic partnering agreement with Naval Group.”

This contract was political from the start.

It was an attempt to salvage votes in South Australia following ministerial attacks on its own submarine building capability and their selection of a Japanese contractor.

Put together in secret, criticised even from within, behind on its aims…

How can industry have confidence in promises of local capabilities to be built up during the construction?

Picture: Defence

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