SPECIAL REPORT Thinking through submarine transition Dr Marcus Hellyer October 2018 About the author Dr Marcus Hellyer is a senior analyst focusing on Defence economics and military capability. Previously he was a senior public servant in the Department of Defence, responsible for ensuring that the government was provided with the best possible advice and recommendations on major capital investments such as the Joint Strike Fighter, Future Frigate and Future Submarine. He also developed and administered Defence’s capital investment program. Marcus has also worked in Australia’s intelligence community as a terrorism analyst. Before joining the public service, Marcus had a career as an academic historian in the United States Acknowledgements I would like to thank all those who have read and commented on drafts of this work. Since some are still involved in the broader submarine enterprise, I have decided to keep all anonymous. Their input, however, has been invaluable. As is ASPI’s policy, all views expressed here are my own. One thing that’s clear from their comments is that there’s a broad range of views on particular aspects of submarine transition; for example, on whether full-cycle dockings should be moved to the west, or the best location for an east coast base, or how (or even whether) the Collins class should serve as a testbed for potential future submarine design elements. So there’s room for debate, and the debate needs to be open and robust in order to identify and evaluate all options for transition. I hope this piece will help foster and inform that debate. But the one thing that all those who have commented on this piece agree on is that the submarine transition will be unlike anything else that the Department of Defence and its industry partners have been through, and the key to a successful transition lies in having a single, coordinated, enterprise-level approach to Australia’s submarines. About ASPI ASPI’s aim is to promote Australia’s security by contributing fresh ideas to strategic decision‑making, and by helping to inform public discussion of strategic and defence issues. ASPI was established, and is partially funded, by the Australian Government as an independent, non‑partisan policy institute. It is incorporated as a company, and is governed by a Council with broad membership. ASPI’s core values are collegiality, originality & innovation, quality & excellence and independence. ASPI’s publications—including this paper—are not intended in any way to express or reflect the views of the Australian Government. The opinions and recommendations in this paper are published by ASPI to promote public debate and understanding of strategic and defence issues. They reflect the personal views of the author(s) and should not be seen as representing the formal position of ASPI on any particular issue. Important disclaimer This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. Cover image: HMAS Farncomb, the first Collins class submarine to undergo a two year full cycle docking following the Coles Review and move to a 10+2 usage upkeep cycle, after it rolled into the Maintenance Support Tower © ASC Pty Ltd. Thinking through submarine transition Dr Marcus Hellyer October 2018 © The Australian Strategic Policy Institute Limited 2018 This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities, and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge. First published October 2018 Published in Australia by the Australian Strategic Policy Institute ASPI Level 2 40 Macquarie Street Barton ACT 2600 Australia Tel + 61 2 6270 5100 Fax + 61 2 6273 9566 Email [email protected] www.aspi.org.au www.aspistrategist.org.au Facebook.com/ASPI.org @ASPI_org CONTENTS EXECUTIVE SUMMARY 4 INTRODUCTION 6 1. WHAT LEVEL OF CAPABILITY IS REQUIRED DURING TRANSITION? 9 2. TRANSITION OPTIONS 14 3. WHAT SHOULD THE FUTURE SUBMARINE ENTERPRISE LOOK LIKE? 24 4. DEVELOPING THE UNIFORMED WORKFORCE 31 5. EAST COAST BASING 35 NOTES 40 ACRONYMS AND ABBREVIATIONS 42 EXECUTIVE SUMMARY The transition from the Collins-class submarines to the future submarine fleet will be more complex than any previous capability transition that Defence has undergone. The submarine enterprise will be in constant transition, rather than completing a short, bounded transition process. Traditional distinctions between design and build, between upgrade and sustainment, and indeed between different classes of vessel won’t be as absolute, requiring Defence and its industry partners to think differently. They’ll need to address challenging risks to prevent a decline in submarine capability and, ultimately, grow the submarine force and supporting enterprise. Overall, Australia’s submarine capability must be treated as a single enterprise, not two distinct fleets. Even if the Australian Government tries to get out of the Collins business as soon as possible, it will still need to extend at least three Collins submarines and operate them to around 2042 to prevent a capability gap. However, that approach wouldn’t provide a greater number of submarines until around 2044. Extending all six Collins would provide more submarines from 2032 and also help to mitigate one of the key challenges in the transition: the development of a much larger number of submariners. Under this option, the last Collins would be in service until around 2048, and it would be 45 years old. Regardless of which option the government chooses, it’s likely that some Collins boats aren’t even halfway through their service lives, and some members of the last Collins-class crew haven’t yet been born. There doesn’t appear to be any way to achieve a fleet of 12 submarines before roughly 2054 without breaking out of the two-year future submarine production drumbeat. Doing so would require even greater spending on submarine construction and disrupt the continuous build cycle that the government is committed to. At least three, and probably more, Collins boats will need to undergo some life of type extensions and serve for at least another 20 years, so maintaining ASC’s ability to sustain and upgrade Collins is essential to a successful transition. If ASC can’t preserve its Collins sustainment workforce, there will be a capability gap. One way to preserve ASC’s viability is to decide now that it will also be the sustainment entity for the future submarine. This will allow it to balance the workforce between Collins and the future submarine as well as to provide its current workforce with career certainty and development as part of a planned transition from one fleet to the other. It will also help to ensure sovereign sustainment of Australia’s submarine capability. However, to provide ASC with the understanding of the future submarine design necessary to sustain and upgrade the boat throughout its service life, it would be beneficial to bring ASC into the design and build of the future submarine. One potential commercial model for this could be similar to that adopted by the government for the future frigate project, in this case with Naval Group taking on ASC’s submarine arm as a subsidiary that may revert to full government control at some point. This model is, however, not yet proven. However ASC is brought into the build, it will require careful negotiation. E XECUTIVE summary 5 Bringing ASC into the design and build of the future submarine would also allow it to apply its considerable expertise in sustaining submarines under Australian conditions with Australian industry partners to the design of the future submarine. This approach would also allow greater coordination between the upgrade and extension of the Collins and the design of the future submarine. Collins could serve as a testbed for potential future submarine systems— provided that did not reduce Collins’s capability or availability. Moving Collins full-cycle dockings (and then conducting future submarine dockings in Western Australia) could also address sustainment workforce risks, but a decision to do so will need to balance the short-term disruption against longer term gain. Growing the size of the submariner trade is another key challenge, as it will be much larger than it currently is— potentially over three times as large. Two measures can help to address this. One is to extend the life of all Collins boats, as the Navy will need more boats to train more submariners. Potentially, Collins could evolve into being a dedicated training fleet as more future submarines enter service, meaning that the government wouldn’t need to invest as heavily in maintaining the Collins’ regional capability edge. But the most important measure to grow the uniformed workforce will be to establish an east coast submarine base to provide access to Australia’s largest population centres. Without this, it’s very difficult to see how the Navy could ever crew the future submarine fleet, rendering the massive investment in the vessels nugatory. There are no clear, stand-out options for an east coast base, and all viable locations are currently occupied. Therefore, the earlier a decision on the location is made, the more time Defence, industry and those members of the community who are affected will have to prepare.