By Helen Clark —
Australia has just awarded a $38 billion contract to France to build its new fleet of 12 diesel-electric submarines, which will double the current sub fleet. The Competitive Evaluation Process (CEP) saw firms from France, Germany, and Japan seek to win the contract over a fifteen month period. While matching specifications for the subs capabilities was essential, domestic considerations played a crucial role in determining the winner.
There have been questions as to whether building all 12 in Australia is the most effective idea, compared with an initial build in France, but no doubts have been expressed as to DCNS’ ability to deliver. The scandal in nearby Malaysia involving bribery has been largely overlooked by Australian media.
The government has painted this decision as one of both technical ability and domestic considerations: France can deliver a submarine to unique Australian specifications and has built 4,000 ton submarines before and it is willing to build entirely in Australia.
An off-the-rack purchase, originally considered in the case of Japan’s Soryu-class, was scratched some time ago thanks to the unique stresses Australian subs will be subject to such as extended patrol distances. The new subs will likely be modified Barracuda-class subs, as explained here by senior staff at DCNS, the French industrial group which won the contract.
Why the French? The short answer can be found in Defense Minister Marise Payne’s press release in Adelaide. In part, DCNS can meet all capacity requirements, from stealth and endurance to cost and Australian industry involvement. What she said paraphrased parts of a 2015 paper, which read: “Submarines are the most complex, sensitive, and expensive defense capability acquisition a government can make” and it was thus a weighty decision.
The strategic benefits of such an important partnership with France were not discussed at length in Australia though President Francois Hollande said that it “marks a decisive step in the strategic partnership between our two countries.”
Prime Minister Malcolm Turnbull has also concentrated on DCNS being the best fit for both the specifications and the willingness to perform the construction in Australia. The main considerations aired were competency, cost, and local build capacity.
The important points for the Australian government are domestic, as much as it is possible reduce a decades-long, multi-billion dollar project to simple choices. Turnbull recently called a double dissolution (both houses of parliament) election for July 2 and he has been trying to secure political goodwill by focusing on the economy after a downturn in the polls. His recent trip to China promoted trade and tried to ignore regional discord.
This sub announcement included the announcement of the creation of some 2,800 jobs and maybe even more in the future. However it may be some years before employment. As Prime Minister Turnbull has pointed out, the French need to design the new submarine before any Australians can build it.
South Australian shipyards have the support of most South Australian politicians, including independent Senator Nick Xenophon who has campaigned for entirely local submarine construction. Yet a RAND Corp report has not painted a positive picture of the shipyards capabilities and former defense minister David Johnson complicated matters in 2014 when he said he would not trust the Australian Submarine Corporation to “build a canoe.” It cost him his job. However the watchword here has been capacity building.
At this point the capacity is more general than specific; what matters is an Australian build rather than the specifics of that build.
Japan was the bid competitor with far greater strategic implications, thanks to the close U.S. relations both nations have and the possible complications with China (which is what much of the media has focused on). Such an ambitious project would have been a political coup for Japanese prime minister Shinzo Abe. Former prime minister Tony Abbott came close to publicly promising the contract to Japan, which has left a sting in the defeat. The project would also have upped Australian and Japanese security cooperation and helped Abe’s attempts to strengthen Japan’s security agenda and policy. It is unlikely Japanese disappointment will permanently sour the good relationship, but it may engender caution in the future, especially so soon after the first visit by a Japanese submarine to pass through Sydney harbor since World War II.
From the strategic perspective, a main focus of the 2016 Defense White Paper was increasing Australia’s naval capacity. Doubling the size of the submarine force is a clear sign that Australia is concerned with its seas and the areas surrounding them. Though China may be happy to see Japan lose the contract, 12 powerful new submarines may make them less happy as the Lowy Institute’s Sam Roggeveen has suggested. The Global Times agreed.
However what often gets lost in the debate is anything beyond China and its actions. Australia also lies on the Indian Ocean, another area of growing importance and growing nuclearization. Whatever China and the People’s Liberation Navy do in the coming years (and they are the principle concern), Australia needs an updated fleet. As navies in Southeast Asia from Thailand to Vietnam stock up on subs, this gives added political impetus for the fleet expansion. Both are friends to Australia, but in what may become more crowded seas it feels useful and safe to be supplying a good membership of that crowd.
Strategic need coupled with domestic political and economic exigencies is why France and DCNS will be helping Australia build the subs.
Ms. Helen Clark is an Australian journalist and former Vietnam correspondent. She is currently the Oceania correspondent for The Diplomat where she writes on Australia, New Zealand and the Pacific.