This is a shipload of money. Submarine fleet tipped to cost $225b to build and maintain
By Anthony Galloway
November 29, 2019 — 12.46 pm
Australia's new fleet of attack submarines is now estimated to cost a total of $225 billion to build and maintain, according to Defence officials.
The Department of Defence had previously said the cost of building the 12 new French-designed submarines was $50 billion, which is the "constant cost" according to today's estimates.
But Rear-Admiral Greg Sammut, general manager of submarines, told a Senate estimates hearing on Friday the "out-turn cost" - the actual cost of the build calculated at the end of the project - was estimated to be $80 billion. There would be an additional cost of $145 billion to "sustain, update and upgrade" the submarines until 2080, he said, but cautioned this was a "rough estimate".
He confirmed the actual construction start date was not until 2024, with the previously quoted 2022-23 kick-off applying to the qualification of the personnel, tools and the processes for the build of the pressure hull of the submarine.
Australian Strategic Policy Institute senior analyst Marcus Hellyer, who had previously estimated the actual construction cost to be $79 billion, said the total cost of the future submarine program was not surprising.
"Submarines are currently our most expensive capability to sustain – around $600 million per year," Dr Hellyer said.
"When you take into account we are getting twice as many and they will be 50 per cent larger and more complex, a sustainment cost of $2 billion per year seems reasonable. Once you out-turn that to take into account that delivery will last until around 2054 and the last boat will be in service until 2080 or so, then $145 billion is not surprising.
"The program have been saying construction would start in 2022-23, but it all depends on what you mean by construction. The problem is that there is very little information on what the schedule is and how it has changed over time."
The Opposition's spokesman assisting Defence, Pat Conroy, used the updated figures to claim the schedule had "blown out by another year".
"The government has also been forced to disclose that the total cost of the project is $225 billion," he said. "I have zero confidence that this government can deliver this project, given the schedule and cost blowouts.
"This is the biggest project Australia has attempted and we are seeing some very worrying trends."
The first attack-class submarine is still slated to enter service in 2034 or 2035.
In a response to a question from Labor senator Kimberley Kitching about whether any of the future submarines could be nuclear powered, Defence Minister Linda Reynolds said it was not being considered.
"It has been the policy of successive Australian governments for the future submarine to be conventionally powered," she said.
https://www.theage.com.au/politics/federal/submarine-fleet-tipped-to-cost-225b-to-build-and-maintain-20191129-p53fds.html