Long awaited Shipbuilding Plan released

Patrick Durrant | Sydney

Larger and more complex than the Snowy Mountains Hydro-Electric Scheme and the National Broadband Network, the Government's highly anticipated Naval Shipbuilding Plan has been released today.

The Plan maps out the establishment of a national shipbuilding enterprise that will engage all States and Territories through their contributions to naval shipbuilding and sustainment of both current and future naval vessels, or as contributors to industry supply chains, or providers of national workforce development and skilling to meet the growing need for skilled naval shipbuilding workers across the sector.

It is in many ways a comprehensive response to the RAND report which made clear that the Australian naval shipbuilding industry was in a precarious and uncertain state as a consequence of underinvestment over many years. According to the report, the underinvestment had resulted in an increase in the cost of building naval ships in Australia to a figure 30–40 per cent greater than US benchmarks, and even greater against some other naval shipbuilding nations. 

Major goals in the short term are the development of the new Osborne South surface ship construction facilities, considered to be one of the most time sensitive stages of the plan, with future frigates set for steel cut in 2020. The existing infrastructure is sufficient to enable the continuing block assembly of Australia’s three air warfare destroyers and is largely suitable for construction of the smaller and less complex offshore patrol vessels.

However, according to the Government, it is inadequate for high productivity construction (versus block consolidation) of major surface combatants such as the future frigate. An investment of up to $535 million is expected to start in the second half of 2017, following consideration of the detailed design and awarding of contracts. The Government also announced on 20 February 2017 that it will invest $100 million in naval related industrial infrastructure and sustainment in Western Australia from 2017 to 2020

The Government has outlined four key enablers necessary for the success of the naval shipbuilding enterprise, that will require its additional investment as well as engagement and investment from industry: 

  • The first of these enablers is a modern, innovative and secure naval shipbuilding and sustainment infrastructure.
  • The second enabler is a highly capable, productive and skilled naval shipbuilding and sustainment workforce. By 2026, the industry will require over 5 200 staff employed in construction activities, and more than double that number employed in sustainment activities and in supply chain and related institutions and industries that directly and indirectly support the enterprise, on both the customer (Government) and supplier (industry) sides of the activity. Over 15 000 personnel will ultimately be directly or indirectly employed in the naval shipbuilding enterprise.
  • The third enabler is a motivated, innovative, cost-competitive and sustainable Australian industrial base with industry at its centre.
  • The final of the four enablers is a national approach to its implementation. 

Other points of note that conform to earlier Defence documents, such as the 2016 Defence White Paper and the associated Integrated Investment Plan, include the option to construct a hydrographic vessel as part of the Naval Shipbuilding Plan for a strategic military survey capability, with the military survey capability to be delivered in the mid 2020s.

The life of the four current Huon Class minehunters will be extended until the early 2030s while new technologies are developed to counter the threat of maritime mines. New vessels are likely to be required at that time.

A riverine patrol capability will be re-established in the 2020s, based on a fleet of lightly armed small patrol boats to allow mobility in a wide range of riverine environments.

A new infrastructure company, Australian Naval Infrastructure Pty Ltd, will own on behalf of the Commonwealth the critical infrastructure previously held by ASC Pty Ltd, necessary to support shipbuilding and submarine programs at Osborne and Henderson, in line with the Prime Minister’s commitment that the fundamental assets of ASC remain under Commonwealth ownership.

A costed and detailed design of a modernised submarine construction facility at Osborne North for the purpose of building the DCNS Future Submarines will be presented for the Government’s consideration in 2018.

Options are also under consideration to potentially add a second floating dock to the Common User Facility at Henderson in WA with an increased capacity to handle larger vessels up to 28,000 tonnes.

The Plan acknowledges that significant challenges exist in ensuring a highly skilled workforce is available within the timelines required.

Considering the enterprise as too important to "allow selected designers and builders of future generations of submarines, future frigates and offshore patrol vessels to source their own workforces and establish their own training requirements", the Government will play an active role in managing workforce issues, at least in the initial stages of implementing the Naval Shipbuilding Plan, through a collaborative approach with key national and international stakeholders to finalise a strategic workforce plan.

The Government will implement a national communications strategy, a key element of which will be a naval shipbuilding career awareness program. This program will focus on secondary school students, to encourage school leavers to consider the naval shipbuilding sector as a career path.

A National Shipbuilding College will be established in Adelaide and Government also sees spare capacity and expertise within the SA and WA TAFE structures to assist with expanding and skilling the naval shipbuilding workforce.

The Defence Industrial Capability Plan, scheduled for release later this year, will baseline Australia’s current defence industry capability and outline a strategic plan to grow an industrial sector that is set up to maximise its involvement in the delivery and sustainment of naval shipbuilding capability to 2025–26 and beyond.

Government also sees the CDIC as being at "the heart of the new collaborative approach required to grow and sustain Australia’s defence industrial base, including the naval shipbuilding industry".

The Government is also looking to industry to reform itself, encouraging it to invest in its own development and support the naval shipbuilding enterprise "through key investments in Australia’s workforce skills base and in innovative new construction practices that will help deliver highly capable and cost-competitive naval vessels. 

Arguing that strong oversight and governance and assessment of implementation effectiveness will be critical to the success of the plan, it has stipulated that regular audits of the sector will be undertaken, aimed at maintaining the health and security of the enterprise and its achievement of naval shipbuilding benchmarks. The independent Naval Shipbuilding Advisory Board will play an important role in advising Government on appropriate benchmarks and in reporting progress against them.

ADM will cover the National Shipbuilding Plan in more detail in this week's Defence Week Premium newsletter.

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