The contract for the 37 billion euro submarine project was awarded to DCNS
"DCNS of France has been selected as our preferred international partner for the design of 12 future submarines; the commercial terms are subject to further discussions." Good news for the structurally weak region, which Australia's Prime Minister Malcolm Turnbull announced on 26 April against the backdrop of the South Australian shipyard ASC in Adelaide, but bitter pills for the German and Japanese competitors. Shortly before the general election scheduled for 2 July, the Prime Minister was able to promise that "this 50 billion [Australian] dollar investment will generate 1,100 Australian jobs directly and a further 1,700 Australian jobs in the supply chain." Almost 30 years after HDW lost the COLLINS project to the Swedes, the company is now facing another defeat as tkMS.
What was the reason, why did the champagne corks pop in Cherbourg, why are Kiel and Kobe licking their wounds? In MarineForum issue 5-2016, the German-Australian author Hans Ohff posed the decisive question in his progress report: "What does Australia want?" and, with his personal answer, simultaneously hinted at the superficial advantages of the three competitors: "Exclusive access to Japanese technology, benefiting from global German submarine experience or preferring to go with the French, who want to open up the path to nuclear-powered submarines for the Royal Australian Navy (RAN) in the future." Has Turnbull answered the third question with his government's decision? Was there really a nuclear "hidden agenda"? Defence Minister Marise Payne vehemently denies this.
The most ambitious submarine designs of all time were created in Kiel, Cherbourg and Kobe
The three competitors in the "Competitive Evaluation Process" (CEP) announced on 20 February last year, tkMS, DCNS and the Japanese government (with the shipyards Mitsubishi and Kawasaki Heavy Industries, MHI/KHI) had been working on their Australian submarine designs for a long time. With reference to my article in MarineForum 6-2015, I will spare you the technical details of the SHORTFIN BARRACUDA (DCNS), which emerged from France's nuclear BARRACUDA, the new Type 216 design (tkMS) and the GORYU, which was further developed from Japan's SORYU.
The CEP team was co-led by an active Australian and a retired American rear admiral. To oversee the CEP, the Australian government set up an "Expert Advisory Panel" under the leadership of a former American Navy Minister; two other retired US admirals advised the CEP team. The two European competitors founded Australian subsidiaries (tkMS-A, DCNS-A) and appointed two completely different local personalities as their Chairman and CEO: The Germans appointed an experienced industrial manager who had already worked with the German licensor B+V in managing the successful ANZAC frigate project and had made a name for himself in Australian naval shipbuilding; the French appointed a former submarine officer who had most recently worked as the office manager of the Australian Minister of Defence and had excellent connections in the government sector. The Japanese, with whom the government side acted directly as a competitor, were obviously convinced until spring 2016 that they could manage without a project office in Australia for the time being and were counting on the corresponding commitment of their ambassador in Canberra. They seemed to trust that Prime Minister Tony Abbott's handshake with his colleague Shinzo Abe had all but sealed the submarine contract.
Over the course of the CEP, competitors increasingly recognised the importance of building the entire "Future Submarine Program" (FSP) in the country for employment policy reasons, although the submission of the options "build overseas" and "hybrid build" (first boats overseas) was also explicitly requested. Back in October 2014, tkMS was the first to commit to building the entire programme at the ASC shipyard and stated that this would be possible at a fixed price of AUD 20 billion. The Chairman of tkMS-A adopted this position and defended the view in a Senate hearing that the boats could be built in Australia at the same price and in the same time as in Kiel. They also wanted to buy and modernise the ASC shipyard and planned to develop it into a service centre for tkMS submarines in the entire Asia-Pacific region. During his visit to Australia in early September, the CEO of tkMS reconfirmed the fixed price of AUD 20 billion for 12 boats and assured that tkMS would spend over 70 % of this in the country. The Daily Telegraph quoted him as saying "... a group like ours has deep pockets and when we promise something we have to deliver".
The French took a different tactic; they only committed to complete construction in the country from July 2015 and openly expressed the view that the most efficient option would be a "hybrid build", with appropriate training of Australian personnel during the construction of up to two boats in France. Cost estimates were only vaguely and cautiously disclosed. In the Nikkei interview, the CEO of DCNS-A emphasised that his company would use the best technology available in France for the FSP. France's own submarines are extremely powerful and their stealth signatures are unique. This technology has never been shared with others. This is only possible because the French government has declared the Australian FSP to be a strategic programme. Yes, they will offer a fixed price, but are not yet in a position to make any binding commitments.
The Japanese, who had only created the legal conditions for exporting weapons in 2014, were reluctant to make promises. At a conference in Adelaide in March 2015 entitled the "submarine summit", neither representatives from the two shipyards nor from the government side took part; only two retired vice admirals gave presentations and interviews. It was not until early May 2015 that Defence Minister Nakatani approved participation in the CEP, reaffirmed Japan's intention to enter into a strategic partnership with Australia and, shortly afterwards, the National Security Council gave the green light for the release of classified information as part of the CEP.
Defence Minister Andrews visits Japan (Image: JMOD)
In April 2015, Abbott's Defence Minister Andrews flew to Germany and France, accompanied by naval experts and journalists, to meet his ministerial colleagues von der Leyen and Le Drian and to visit the shipyards. It was reported in the newspapers that Andrews spent several hours at the Kiel shipyard, where he learnt that tkMS had built 161 Submarines for 20 navies and during a helicopter tour of the shipyard site, he was impressed by 9 boats in various states of construction or repair. The clear message had got through to him: Germany is an industrial power and Submarines their speciality.
The French presented the DCNS shipyard in Cherbourg, which is steeped in tradition, and let it be known that there are still over 100 Submarines They never tired of emphasising that submarine technology, precisely because of its importance for nuclear deterrence, was one of the best-kept state secrets that no country except Australia was prepared to share. Andrews' impressions were described as "gigantic". No wonder, seeing the shipyard working at full capacity with the activities for the series construction of the 6 BARRACUDA nuclear-powered boats displacing over 5,000 tonnes gives a foretaste of what Australia intends to do with its FSP comprising 12 boats of almost the same size: "Think big".
Although it remained unspoken during Andrews' visit to Japan in early June 2015 that a Japanese submarine design in the service of the RAN is seen by Tokyo as an important building block for a future US-Japan-Australia tripartite alliance in the face of pacifist resistance in the country, Andrews undoubtedly took this conclusion home with him. Of course, the two shipyards MHI and KHI in Kobe also managed to impress the minister with their potential. The Japanese shed light on their novice status in defence exports with apparently uncoordinated interviews during the visit: a retired vice admiral is said to have told the Australian ABC News that the lack of skilled welders in Adelaide was preventing the successful processing of the extremely high-strength steel for Japanese submarines could be more difficult. Two staff officers were convinced that there were no better non-nuclear weapons in the world. Submarines than the Japanese. "We fear proliferation to China once our knowledge is in Australian hands," the same paper said. The reports countered Japanese official assurances that the option of "building in the country" was firmly in view.
The suspicion of a "captain's pick", i.e. an award for Japan that had already been agreed between Abbott and Abe since 2014, had persisted in most Australian media. As a reminder, Abbott's proclamation of the CEP was intended to remove the basis for rumours of a rigged "Option J" and enable nothing more than the "best for Australia". At the end of August 2015, a Japanese industry delegation in Adelaide was still behaving in a tight-lipped and awkward manner with regard to questions about cooperation opportunities with the "local supply chain", i.e. the involvement of Australian companies, should the contract be awarded to Japan. On 15 September 2015, the captain's pick was suddenly taken off the table when Malcolm Turnbull replaced Tony Abbott in an internal party coup and became the new prime minister. Turnbull's assumption of office also promised trouble for the Japanese competitor, as the Prime Minister is said to be close to China, and possibly a tailwind for the German - his wife was Honorary President of the German-Australian Chamber of Industry and Commerce at the time. On 21 September, Turnbull appointed Senator Marise Payne as the country's first female defence minister.
The propaganda war
As soon as the three competitors had submitted their designs by the deadline of 30 November 2015, activities broke out that can best be described as a "propaganda war of everyone against everyone". Journalists presumably in the pay of the respective competitors provided new speculation and analyses, insinuations of technical deficits in opposing designs, political-strategic hypotheses, defamation of individuals, anti-Japanese publications bordering on xenophobia and conspiracy theories regarding Chinese and, above all, American influence in several newspapers and blogs on a daily basis.
In February 2016, the CEO of DCNS-A attracted attention with a publication in which he wrote about a strategic partnership between the two countries. France is a "complete submarine power", he said, which on the one hand plays in the same club as the USA and the UK, because it only has nuclear-powered nuclear weapons. Submarines but also masters conventional propulsion. With France, Australia will join this club and gain regionally superior capabilities, with access to technologies derived from nuclear missile and attack submarines. The best technical example is the pump-jet propulsion technology to be made exclusively available to Australia as part of the SHORTFIN BARRACUDA design, which only the three club members mentioned possess. DCNS proposes to establish centres of excellence in Australia from the beginning of the FSP, which will be embedded in the French development programme for science, training and research planned until 2080.
The Germans, not members of this exclusive club, responded with technical clarifications and pointed out that pump-jet propulsion systems were unsuitable for the low-speed spectrum in which non-nuclear propulsion systems operate. Submarines most of the time. In contrast, a lightweight propeller made of composite carbon fibre has been developed and is already being tested on the 212A class. In mid-March, the tkMS CEO appeared together with the German ambassador at the International Press Club in Canberra and announced, among other things, that his company would introduce the "digital shipyard" concept in Adelaide if it was awarded the contract and realise the benefits of the German transformation to "Industry 4.0", which means nothing less than the next phase of the industrial revolution. In addition, the existing subsidiary will be substantially expanded into a centre of excellence for shipbuilding, which will support the RAN in the long term, not only in the area of shipbuilding. Submarinesbut could also provide support in other ways.
Despite the replacement of the Japan-affine Abbott by Turnbull, the Japanese competitor initially remained the favourite in the media - no longer because of the presumed deal between the heads of government, but because of the strategic interest of the USA in a future tripartite alliance. The "Financial Times" reported that both the French and the Germans had fallen behind the Japanese design, the former due to US security concerns, the latter because they had never built such a large submarine before. Official statements from Washington, however, reaffirmed the neutrality of the USA in the FSP and denied speculation that the integration of the command and weapon deployment system set for the FSP would only be authorised on a Japanese boat. However, statements by a US admiral made headlines, according to which the Japanese are currently the clear technology leaders in conventional Submarines would possess. An anonymous Australian team of authors then debunked all pro-Japanese myths in the "Australian Defence Reporter" at the beginning of April. Japan does not have any highly developed submarine technology; on the contrary, SORYU is even inferior to COLLINS in most areas.
Then, citing "two people familiar with the matter", the Wall Street Journal suddenly reported on 20 April that Japan had dropped out of the competition because the Japanese solution had been deemed too risky in view of its lack of experience in naval shipbuilding overseas. The German company had most likely emerged as the frontrunner. The fact that the Prime Minister's wife had already resigned from her honorary presidency of the German-Australian Chamber of Industry and Commerce on 13 April was therefore believed by the Germans to be an indication in their favour.
Conjectures about reasons, errors, influences
Two days earlier than the rumour mill had spread, on 26 April, Prime Minister Turnbull announced the award of the contract to DCNS. This was by no means only due to the pressure that had been built up by the leak about the Japanese leaving. It was also a matter of urgency because the Prime Minister intended to dissolve both Houses of Parliament on 11 May in order to call a federal election for 2 July. As the government can no longer pass budget resolutions during the election campaign period, the early announcement of 12 new Submarines in Adelaide, a welcome 50-billion-dollar election promise that will secure several thousand new jobs in South Australia.
Prime Minister Turnbull and Defence Minister Payne announce the result (Image: malcolmturnbull.com)
The Japanese are said to have lost because their inexperience in arms exports was seen as too great a risk. The unofficial but subtly launched support of the USA by influential people did not seem to have helped them, perhaps it was rather counterproductive, because nothing offends the Australians more than allusions to the "51st state of the USA". It is striking that Turnbull explicitly mentioned the three former US admirals and the ex-US Secretary of the Navy by name as responsible parties in the CEP when he announced the result, as if to say: "Look how independently we decided anyway". Opposition to the export from Japanese officials and industry was unmistakable, Tokyo's representatives were only moderately convincing, the concession to complete construction in the country had come too late, and finally, there was probably some truth in the propaganda about technical deficits - this is how the media analyses can be summarised. Although there were speculations in the Japanese media that the submarine decision could have something to do with a kowtowing to Beijing by Turnbull, a friend of China, one Japanese analyst answered the question of whether Tokyo would now reconsider its relations with Canberra by stating that a deeper security partnership with Australia was not only still in Japan's interest, but that strategically Japan needed Australia more than the other way round.
Why did the Germans lose? It is rumoured in Australia that DCNS convinced both the RAN and the American experts in the CEP team of the advantages of the pump-jet propulsion system. The French design is said to have been assessed as quieter than the Type 216 over the entire speed range and to have significantly more powerful sonar systems. Furthermore, with their "digital shipyard" concept, the Germans had not been able to dispel doubts about a successful "up-scaling" from the maximum 2,400 tonnes built to date to over 4,000 tonnes. In addition, the skilful move that DCNS largely developed the CEP offer in its Canberra office - and not at the parent company like tkMS - was convincing.
It should be noted that the media campaign was extensive and the political support was unusually committed by German standards - from the Federal Chancellor to the Minister of Defence and the State Secretaries right up to departmental level. In addition, the inspector of the navy in "Down Under" was very impressive. The Federal Foreign Office also recognised the geopolitical and military-economic dimension of the submarine business with a country like Australia. The ambassador in particular showed no fear of contact with the defence industry in his supportive efforts on site. However, "Le Mannschaft", as Heiko Borchert recently called for in Griephan 21/16, was not yet a concerted effort in black, red and gold.
Type 216 from HDW (Graphic: tkMS)
In my article a year ago, I quoted the authors Yule/Woolner on the reasons why Kockums won the contract against IKL/HDW in 1987: " ... the Germans were too conservative in their design, and since the Swedes agreed to everything the Australians demanded, the Germans should have followed suit ... but the Germans didn't recognise this message ... they wanted to fulfil the basic requirements and win on price". This time the design was not conservative and in some cases went beyond the basic requirements; it was certainly the best that German engineering was capable of and was probably technically on a par with the French proposal. It is therefore astonishing that tkMS did not counter constant repetitions in the media that it was an "up-scaled" version of the Type 214, i.e. the "off-the-shelf" export design. In fact, Type 216 as a "two-decker" has far more design similarities with U212A, i.e. the premium boat for their own navy, the "special and unique" that the Australians attach so much importance to.
It is true that the Germans have never built a boat over 2,400 tonnes. That it would be difficult or even impossible to realise the required displacement of over 4,000 t for the Type 216 by "up-scaling" a smaller design is nonsense, because the proof has already been provided: for the FSP, a doubling of the displacement compared to the largest boat of German provenance to date, the DOLPHIN-AIP for Israel, is required. However, the development of U212A as the successor to U206A already involved a tripling of the displacement. Nevertheless, U212A was a success right from the start! Why didn't tkMS make this simple argument publicly? Instead, media consumers could read almost daily about the unrivalled export successes of the mighty corporation over the last 50 years, i.e. with boats "off the peg". In addition, the Germans wanted to win on price again without need - AUD 50 billion is not an austerity budget. The early and repeatedly confirmed promise of the fixed price of AUD 20 billion, combined with the implausible claim that construction in Adelaide could be just as cost-effective and fast as in Kiel, was perhaps a serious mistake.
Concluding remarks
Unlike in France - and also in Australia - the Submarines in the German Navy as operational components such as mine defence forces or corvettes at best. This probably did not go unnoticed by the attentive Australians, who decided in favour of the most costly armaments project of all time for strategic reasons and ultimately chose a partner that positioned itself strategically from the outset: an ally for over a hundred years and a Pacific power - albeit with a relatively modest military presence in the regional "Overseas Territories" - and a country with an almost complete reliance on state-of-the-art, globally operating navies. Submarines nuclear deterrence. Germany does not belong to this club.
The design philosophy of German Submarines of the post-war period - compact design based on the principle of "as small as possible and as large as necessary" - was characterised by the operating conditions of the Cold War. In Australia, this philosophy was not in demand from the outset, but rather "think big". The SHORTFIN BARRACUDA, derived from its nuclear sister design and weighing almost 5,000 tonnes, will be a dangerously large target for active sonar detection, despite the latest sound-absorbing coating methods and structural acoustic mirroring. Nuclear-powered Submarines have unlimited maximum speed reserves with which they can move quickly and far away from a "datum" (position of detection). A conventional boat of this enormous size, on the other hand, can probably not run for much more than half an hour at maximum speed, even with fully charged batteries. The energy-guzzling pump-jet propulsion, which is apparently so highly valued by the Australians, will make this situation even worse.
There were submarine experts on the CEP team who were of course aware of these parameters. I therefore do not rule out the possibility that there could be a "hidden agenda" that provides for the transition to the nuclear sister design. After a five-year design phase, construction will not begin until the 2020s and will enter service from 2030. Plenty of time, then, if Australia is ready to join the club of "nukes" by then, not least in view of China's naval power.
There will certainly still be potential demand from the tkMS portfolio. In Norway and Poland, the Germans will have the next opportunity to compete against the "équipe tricolore" with "lessons learned", and it will not be about procuring an enormously expensive and underpowered "Leviathan".
Captain (ret.) Wallner was a submarine commander, squadron commander and defence attaché in Tokyo. When the Australian SEA 1000 project began in 2008, he was involved in the official support of German industry as Head of Division for Underwater Systems in the Defence Department of the BMVg.
Author: Raimund Wallner
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