Defence Business: What is the Defence State up to? | ADM Nov 2010
Defence SA’s CEO Andrew Fletcher, who bares much of the responsibility for developing and implementing the SA Government’s Defence Strategy, talks about the probability of Techport Australia expanding, the JLTV bid and SA’s initiatives on the education front to attract technically qualified people into the defence industry.
Serge DeSilva-Ranasinghe | Perth
“Under the current Defence Capability Plan (DCP) and the 2009 White Paper, the indigenous procurement and through-life support spend is going to increase from about $4.6 to about $5.6 billion over the next three-four years,” Fletcher explains to ADM.
“At the moment South Australian industry is winning around 25 per cent of Defence’s indigenous procurement and through life support spend, so we are securing about 1 and a quarter billion a year.
“We are focused on maintaining and growing this share over coming years as we look to double the defence sector contribution to our economy to $2 billion.
“SA is clearly committed to developing a sustainable naval shipbuilding industry, as demonstrated through the State Government’s $300 million investment in Techport Australia.
“There is a quarter trillion dollar program in naval shipbuilding and support in Australia over the next 30 years, providing a big opportunity for SA and indeed Australian industry.”
However, the Rann government has admitted only $2.5 billion of the $8billion contract to build AWDs will be spent in Australia, according to recent statements in state government budget estimates.
SA Treasurer Kevin Foley said $800 million from the $8billion AWD project would be spent in the state.
Federal Defence Minister Stephen Smith referred the matter to his department, a spokesman saying the project was “on track to meet the target of more than 50 per cent Australian industry content”.
The AWDs, designed by Spanish-based Navantia, are being built at the Techport and ASC facilities in Osborne, near Port Adelaide.
Asked during budget estimates by opposition defence spokesman Martin Hamilton-Smith how much of the $8 billion would be paid to overseas suppliers, and how much was being spent here, Foley said the only ‘credible’ figure was “$2.5 billion as payment to Australian contractors”.
Foley told the committee 66 of the 93 fabricated and pre-fitted hull blocks would be built in NSW and Victoria, leaving South Australia with less than one-third of the total work.
“Forgacs in Newcastle and BAE Systems in Williamstown will deliver 66 of the 93 fabricated and pre-fitted hull blocks, which are then joined together to form a completed AWD,” Foley said.
“The blocks will be transported to Techport Australia for consolidation.
“The remaining 27 blocks are being built at ASC's facility at Techport.”
Rann’s pre-election statement said: “In the past six years, SA has secured for now and the future around $44 billion worth of defence projects.
“This includes the largest defence contract awarded in Australia’s history, the $8 billion AWD project.”
A spokesman for Foley said the government “always maintained the $8billion AWD contract will help create 3,000 jobs and contribute an estimated $1.4 billion into SA’s economy over the next 10 years.”
Like any project, the true benefit to the state will only be able to be truly caluculated once the project has been completed.
“We are most definitely focused on attracting future shipbuilding projects to Techport Australia, in addition to the AWD project and assembly of the future submarines,” Fletcher said.
“We are pursuing the replacement frigate program as well as off-shore – patrol combatants and deep repair and maintenance activities.
“With its world-class infrastructure and critical mass of naval shipbuilding expertise, Techport Australia is the logical location for future naval shipbuilding, consolidation and sustainment.
“We strategically designed the facility with long-term expansion in mind to support additional projects as they come on line.
“Clearly, there are significant advantages in using common user infrastructure in terms of reducing overheads for the Australian Government.
“SA is focused on supporting the Future Submarine Project, whatever shape and size the submarines might be, and we are promoting the state as the logical location for design activity.
“There is bipartisan support for assembly of the submarines in SA, and we are making sure that we’ve got everything right for that to happen as and when the process is worked through.
“We are actively promoting SA’s defence credentials to national and international companies shortlisted for Defence’s Land 121 Phase 4 project.
“We are well placed to support this and future military vehicle projects such as Land 400 with our well established vehicle engineering and manufacturing capabilities enhanced by a strong SME base with significant fabrication, production and maintenance capabilities.
“We are particularly focused on companies shortlisted for the Manufactured and Supported in Australia option, in terms of promoting SA as an ideal base for their manufacturing and support operations should they be successful.
“If the JLTV option proceeds, the reality is that the vehicles will be manufactured offshore.
“We’re certainly keeping an eye on it though, in terms of potential global supply chain opportunities for our local companies and any through life support opportunities down the track.
“There is no question that skills are paramount as we grow our sustainable defence industry in SA.
“Governments have a lead role to play in delivering a pipeline of skills to meet industry’s long term needs, and we work very closely with the Defence Teaming Centre, industry and the State’s education and training arms to achieve this.
“Of course the need for greater uptake of maths and science at school spreads wider than just defence, it impacts mining and information technology and even high-tech agriculture.
“We have started right from the grass roots level, encouraging kids into maths and science at primary school and educating parents on career opportunities in these areas.
“The Government is implementing a $51 million primary maths and science strategy, and around $10 million in recruiting and retaining maths and science teachers in our secondary schools.
“We’ve also mandated minimum teaching times for science and maths from next year, and we’re refurbishing 22 science centres across the state.
“At the post-graduate and research levels, the State Government has supported the establishment of the Defence Systems Innovation Centre (DSIC).
“On top of the State’s major investment in skills, the Commonwealth has recently invested $20 million in SA defence skilling initiatives, including professional doctorates and masters programs focused around systems integration, as well as an advanced technology schools pathways program.
“From next year, the State Government is providing 75 new scholarships each year to students studying defence related honours degrees.
“SA has a long history of successful defence research underpinned by education and industry alliances, powered by the Defence Science and Technology Organisation (DSTO) at Edinburgh and University of Adelaide, University of SA and Flinders University.
“These cover a wide spectrum of specialist R&D, with concentrations in: systems engineering and integration, photonics; modeling and simulation; robotics; electronic warfare, and communications and networking.”
A day in the life of Defence SA
As a key state government agency, Defence SA coordinates, sponsors and explores all aspects of defence and industry for the state.
The Defence SA Advisory Board, composed of 10 senior executives and chaired by General Peter Cosgrove, assists the SA government in the strategic planning, management and delivery of its major projects.
In an exclusive interview General (Rtd) Peter Cosgrove provides insights about the contribution of the Advisory Board and his role as Chairman.
“We have various operational environments covered with experts who are eminent and regarded internationally, and in the wider Australian defence industry.
“We use our knowledge and experience of both Defence government activity and defence industry to try and broker situations, which are first and foremost to the benefit of the Commonwealth, and the people who work for the Commonwealth.
“Secondly, of course, to the taxpayer; and thirdly, to the state economy and defence industry.
“We try to nominate good pathways to go ahead.
“For example, the Techport facility, which is possibly the prime ship maintenance and ship building facility in Australia.
“The facility where the submarines were built is also being expanded, upgraded and modernized and now it has acquired a very substantial ship-lift, which gives it the capacity to lift large military ships and of course have a commercial shipping role in the support of commercial ships.
“It is an industry which over time could be over $200 billion or more, when you take into account construction and maintenance.
“These are important matters the board and I, and for an agency like Defence SA to be involved in.
“The increasing defence presence on the ground in SA, which is evident through the expansion of the Edinburgh super base, with the new generation of maritime patrol aircraft that are likely to stay there, and the decision by defence to locate the 7RAR Battle Group, an army mechanized infantry battalion, are all things we espouse and promote in the state’s interest.
“We try to facilitate with the agreement of the political leadership and also the commonwealth’s positions in that regard, and when they decide that SA is the destination for some of these assets, we help the state to come up with a comprehensive plan to ease the way.
“I serve year by year at the pleasure of the premier and the deputy premier, and have been Chairman of the Board for four years.
“As people move on we refresh the advisory board from time to time with people of wisdom, insight and experience who continue to add to the board.
“We have one vacancy which I hope to fill in some future time, again, probably for a service officer.”