Enormous risk in $386bn sub deal

According to UNSW Canberra naval historian Dr Richard Dunley, that‘s the problem.

We don’t know.

Worse, we don‘t appear to have even explored them.

“If Defence seriously expects the public and successive governments to support the project over the next two decades, it needs to justify why the capability is necessary,” he says.

Prime Minister Anthony Albanese joined President Joe Biden and British Prime Minister Rishi Sunak at a US Navy construction facility in San Diego to detail the who’s, what’s, when’s, and where’s of the tri-nation project.

But the why remains a mystery.

And that‘s the single big gamble justifying a litany of unexplored risks.

An unknown number of US Virginia-class submarines built before 2017 include steel not up to the required combat or collision specifications. And the US has sold Australia dodgy second-hand ships before.

Wild fluctuations in geopolitical moods mean the thinking of any one of the three AUKUS nations is likely to change throughout the 30-year project. For example, consider how Canberra dumped the French Attack-class submarine deal.

Then there‘s the ability of both the US and the UK to deliver. Will Washington be willing to hand over attack submarines in the midst of an international crisis? Can London overcome the challenges its submarine industry already faces?

Finally, where will we bury the old nuclear reactors once they expire in the 2040s?

“This is by far the largest and most expensive acquisition in Australian Defense history. Yet, they didn‘t even do a strategic review or an update before announcing the decision in September 2021,” says Dr Dunley. ”So there’s just that nagging question over the degree to which the issues were fully through before the big announcement was made.”

Buyer beware

The US Navy was recently rocked by the revelation that many of its newest and best submarines had been built with steel of lower quality than specified.

It was a scandal that spanned more than two decades before the fraud was exposed in 2017.

The Pentagon has admitted the Virginia class attack submarines were among those affected but hasn‘t detailed what that means.

Unspecified issues are a problem the Royal Australian Navy has encountered before. It bought two second-hand tank landing ships (LSTs) in 1994 and significantly rebuilt them into helicopter-carrying amphibious assault platforms. But both HMAS Manoora and Kanimbla had to be retired early due to structural damage resulting from rust.

At the time, Howard government defence minister Ian McLachlan declared no government should ever again buy used ships from the Americans.

“In terms of the idea of them being second-hand, I don‘t see that as a huge issue. I’m assuming that, if we’re aware of these problems, people in defence are equally aware of them,” says Dr Dunley. They’re still going to be a very good bit of kit.

But their age and incompatibility with the subsequent British-designed SSN-AUKUS will likely mean Australia will only want to keep them for a short time.

“That means they will have to be decommissioning nuclear power plants much earlier than anticipated. I don‘t think they’ve figured out what to do with them yet. I don’t know if they’ve included that in the overall cost. How could they?”

Crystal-ball gazing

“We‘re saying the threat of conflict with China is the driver of this project,” says Dr Dunley. ”If that’s going to happen, the period of greatest risk appears to be the 2030s”.

The big issue with the British-designed, Australian-built submarines is they won‘t start to be delivered until the 2040s.

But Dr Dunley says getting the second-hand Virginia class earlier depends on whether the US Navy – let alone Congress, the Senate or its President – will still be willing to hand them over.

“With investment in American yards, you may see some uptick in construction. But the big risk is if that investment doesn‘t generate more submarines quickly enough.”

The US Navy wants a fleet of 65 to 70 attack submarines.

It currently has 53.

“So they‘re a third short of where the US Navy thinks they need to be,” Dr Dunley says. ”The Americans will want to be in a position where they’re beginning to rebuild their own fleet before they want to pass any off. And this is not going to be an administration decision. It’s ultimately gonna have to go through Congress. And that means if the Navy doesn’t want it, it will be a very, very hard sell.”

And then there are the vagaries of politics.

“How palatable will the concept of giving up capability for Australia be among those politicians who believe in America First? I don‘t know. I don’t suspect anyone really knows. But it’s certainly a risk”.

The UK, however, may be being overly optimistic. Dr Dunley says replacement and upgrade work on its own fleet is already substantially behind original schedules.

“Given what they‘re currently having to do regarding their SSBN (nuclear ballistic missile submarine) program, the idea of fully designing a new submarine and having it built by the late 2030s sounds very optimistic.”

What are they good for?

We‘ve been told what nuclear-powered submarines can do. They can remain underwater for months at a time, powering along at great depths while remaining unseen and unheard.

Conventional diesel-electric submarines like Australia‘s existing Collins class boats must come to the surface roughly once daily to “breathe”,… allowing their diesel engines to power up and recharge their batteries. That makes them more vulnerable. And limits the time they can stay at sea.

But Dr Dunley says the question remains: Is that enough to justify a $368 billion spend on eight nuclear attack submarines instead of $90 billion for 12 French Attack Class diesel-electric submarines?

“They‘re saying conventional submarines are obsolete, too slow, too limited in range, too easy to find. But they’re also saying at the same time that the Collins Class conventional submarines are fully capable of holding their own until the 2040s. Those two positions are mutually exclusive”.

And other similarly maritime-dependent nations, such as Japan, have taken a different stance. They‘re building diesel-electric submarines with advanced lithium batteries and air-independent engine systems.

“And that‘s in an environment that would be far more contested,” Dr Dunley says. ”If you’re talking surveillance, the East China Sea will be far riskier than the Southwest Pacific”.

And are submarines even the best value for money?

Last month, Canberra finalised a $558 million deal to buy 20 armoured trucks carrying six HIMARS missiles each. $368 billion equates to 13,200 more of these long-range weapon systems.

“Nobody is denying that SSN-AUKUS will be a very capable platform. But has anyone gone through all the different permutations of how that money could be spent?” he asks.

“So it comes back to that constant question, can you provide more security for that chunk of money? Defence will have to convince us it is if the project is to survive another 30 years”.