Should Australia build its own naval warships?

 Recommendations

 1. An expansion of Australian military power will help support the forces of the US and its other allies at a crucial time, as American pre-eminence comes under serious challenge. However, locking into a naval shipbuilding program in perpetuity is betting heavily on surface vessels, which are increasingly vulnerable to new technologies.

 2. Given the very high costs and strategic importance of the RAN’s surface fleet, any plan to establish a continuous naval shipbuilding program should be accompanied by a comprehensive analysis of the costs, benefits and risks of the program compared to alternative procurement options.

 3. The sale of ASC is inextricably linked to a number of elements of the broader naval shipbuilding industry landscape, including the future submarines and frigates and the ongoing maintenance of the Collins-class submarines. Any credible enterprise-level naval shipbuilding plan will need to include a sequenced road map showing how the various elements will be brought into harmony.

 4. If a monopoly rolling production program is established, the government needs to explain how it will monitor performance and ensure value for money through incentives and sanctions. One option would be to establish a Naval Shipbuilding Office to oversee the performance of Defence and the monopoly supplier.

 5. Rather than commit to a rolling-build program today, the government could initiate an Anzac replacement program with a production run on a schedule consistent with transitioning to a continuous-build program later, with any further work contingent on achieving value-for-money levels of productivity.

Full Report



The structure of this article is my reply to the five recommendations listed above. I will also address the need to modernise the Australian shipbuilding industry. Note to the reader: The report only covers the replacement for the Anzac Class Frigates and not the Collins Class submarine successor.

1. In a future war Australian shipyards will be called upon to meet the wartime demand for frigates and other surface vessels. In short this require the expansion of the RAN's surface fleet to meet wartime demands and replacing ships lost in combat. Having Australian shipyards and other industrial plants tooled for rolling production is a prerequisite for wartime mass production.

If the reader would like me to further explore the topic of wartime mass production , then feel free to drop me a line or leave a comment below.

2. Why is any cost , benefit and risk analysis being done on the current work force and as the shipyards and other industrial plants are tooled? Wouldn't the analysis be worthless if the shipyards and other manufacturing plants are retooled for 3D printing?

3. The sale of the ASC is one of the pivotal policy decisions concerning the Australian Defence industry that has been made in recent years. I would go as far to say as the buyer could make or break the future of Australian shipbuilding.

The reader may want to consider how the fate of the New Zealand rail network during the years it was owned by Tranz Rail. Tranz Rail guttered New Zealand's rail network with a lack of maintenance and investment in equipment. Tranz Rail only real goal was asset stripping. I believe what happened to the railways in New Zealand under Tranz Rail's watch is a cautionary tale. Government's must take care when they privatise strategic assets like shipyards and railways.

What kind of criteria should the Australian government set for the sale of the ASC? What measuring sticks should be used when measuring the success a firm has previously had in delivering vessels on time and on budget?

4. I am not opposed to the creation of the Naval Ship Building Office. I do think that the future owners of the ASC should receive payment bonuses for vessels that are delivered on or under time. By the same token the firm should lose money on a vessel that has been delayed longer then a specified amount of time.

5. A very sensible idea. How does the RAN's surface fleet expand if the initial order of vessels suffers from gross cost over runs? A contingency plan that ensures the additional vessels are available from off shore sources is required.

I do think that the production of vessels should take place in two phrases. Phrase one would entail the trialling of competing designs. After the winning design has been chosen prototype vessels can be constructed for further testing. Ironing out any wrinkles with new production methods and a retrained work force could also take place without adversely effecting the phrase two production schedule.

Phrase two as I have indicated would be the production phrase. The focus would be on delivering vessels in a speedy manner to the RAN and maybe even export markets.

Modernisation of the Australian Shipbuilding Industry

I believe that the advent of 3D printing as rendered current manufacturing tooling obsolete. The reader may want to consider how the Chinese are using 3D printing in the construction of high rise buildings If 3D printing can be used to fabricate high rise buildings , why cant it be used in shipbuilding? 

So the matter becomes how and who pays for the modernisation of the shipbuilding industry. Who will pay for the Research and development into 3D printing? Who will pay for retooling the shipyards? How will the smaller firms who support the shipbuilding make the transition to the new era of 3D printing? I would advocate that these questions be resolved before the ASC is privatised.

Australia could potentially have a world leading and cutting edge shipbuilding industry. For the enormous amount of potential to be unlocked the Australian government will need to make careful and considered policy decisions. Australian firms will have to embrace pushing technological boundaries into uncharted frontiers.