Feb 5 2011 at 12:05 AM
Updated Feb 5 2011 at 12:05 AM
Defence spending follies must stop
by Brian Toohey How hard can it be to design and build a small boat to carry a 50-tonne load between a transport ship and the shore? Much too hard for the Australian Defence Department, it seems.On Tuesday, Defence Minister Stephen Smith
scrapped the project under which six landing craft were built for a cost of $40 million, but did not go into operational service after being delivered in 2005.Called LCM 2000 Watercraft, the 25-metre boats were supposed to be carried on the transport ships Kanimbla and Manoora and launched by crane. Smith said that, "most critically, the dimensions and weight of the watercraft meant they were unsuitable to be launched from these ships and are not fit for alternative Australian Defence Force use".The backdrop to this latest debacle underlines the folly of exempting Defence from the discipline imposed by the 2 per cent cap on the real increase in annual government spending.
To contain costs and improve quality, defence companies operating in Australia should not be given more protection against imports than any other manufacturer. Instead of repeatedly botching local design and construction, the ADF could save billions by buying proven equipment from overseas production lines.
This would have the added advantage of addressing the skills shortages that Prime Minister Julia Gillard
promised to tackle on the day that Smith axed the landing craft. But Gillard showed no understanding that it makes no sense to create jobs in military production when the same skills are in short supply in more profitable parts of the economy.The Howard government's decision to design and build the LCM 2000 watercraft locally did not even require the integration of complex electronic systems that typically proves beyond the capability of the Defence Materiel Organisation and the Australian industry.Because the Kanimbla and the Manoora initially operated with US-made landing craft on board, the DMO knew the space and weight limits this imposed. But it went ahead and replaced a mundane piece of military equipment with an Australia-designed replacement that was too big and too heavy.Although there is nothing inherently wrong with buying second-hand ships from overseas, the experience with the Kanimbla and the Manoora demonstrates the potential traps. The Keating government paid a "bargain" price of $60 million for these two former US navy ships in 1994, and then discovered they were rust buckets.
The Navy insisted on extensive modifications at a Newcastle dockyard, including removing bow doors, crane and tank ramp, while adding helicopter hangars and hospital facilities, at a cost of about $400 million.The ships were not handed back to the Navy until late 1999. After suffering multiple problems, they were taken out of service in September last year.Smith announced on Tuesday that the Manoora would be decommissioned ahead of schedule. The Kanimbla will be out of operation until mid-2012 before being decommissioned in 2014, if not earlier. This only leaves the smaller supply ship Tobruk available to help with the relief effort after the cyclone and floods in Queensland.Buying new but unproven equipment from overseas is also risky. John Howard
and Kevin Rudd
should never have committed Australia to buying the trouble-plagued US Joint Strike Fighter when flight testing will not even be completed until 2016. This commitment made even less sense after Howard's defence minister Brendan Nelson ordered 24 Super Hornets - a proven fighter being delivered on time and on budget.
Defence's difficulties in integrating electronics systems in weapons platforms include the Seasprite helicopter project, abandoned at a cost of $1 billion. It took nine years to fit the AGM-142 missile to the F-111 - the job was only completed a year before the big jets retired in 2010.In August 2008, Australia paid $50 million for 31 Supacat patrol vehicles for use in Afghanistan as replacements for the SAS's old Land Rovers. But the DMO is still struggling to integrate a different communications system that it preferred. The British bought the same basic vehicles and promptly dispatched them to Afghanistan.The scrapping of the LCM 2000 watercraft raises a larger question. If a simple $40 million project is beyond the ability of the nation's defence sector, how can it be trusted to deal with its immensely complex project to design and build 12 big new submarines, which Australian Strategic Policy Institute procurement specialist Andrew Davies estimates will cost about $40 billion? It can't.The experience of designing and building the smaller Collins-class submarines has been a disaster. Often, the Navy is lucky to have two of the six subs operational.
In an interview published in the AFR on Thursday, Defence Materiel Minister Jason Clare said the most worrying issue he faced was how to sustain the Collins subs. They already cost more than $300 million to maintain and are expected to remain operational until about 2025.It would be cheaper to scrap them now and buy high-performance, reliable submarines from overseas. Four to six are enough, particularly as the Navy can raise only two crews.Although the 12 new, locally designed submarines are not due to be commissioned until the mid-2020s, key design issues have to be decided within a couple of years. Australia long ago gave up any delusions about designing and building fighter planes - a much easier task than designing advanced submarines. Smith should abandon this absurd $40 billion plan.Probably the best option would be to buy the highly successful Type 214 submarines from production lines in Germany or South Korea. Australia could have an input into the specifications for later models.
Near-new Type 214 subs could be available at fire-sale prices from the cash-strapped Greek and Portuguese navies. But six brand new models would cost about $3 billion and be available within a couple of years. This would sure beat paying $40 billion for nothing but trouble.
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