In an unusually scathing report, the Australian National Audit Office (ANAO) has found Defence’s management of the proposed Collins-class submarine life extension program resulted in extra costs and delays while leaving capability risks.
It said that meant Defence was not well placed, as of May 2026, to demonstrate that the project would achieve intended capability outcomes or represent value for money.
“Defence’s planning and implementation of the Collins class Life of Type Extension (LOTE) project was partly effective, with the project not managed in a way that was commensurate with its complexity, risk profile and strategic purpose,” it said.
The ANAO released its report on Friday afternoon, a day after Defence Minister Richard Marles announced plans for an abbreviated LOTE on the six Collins boats.
That timing was likely no coincidence as members of the media were hastily invited to a background briefing on LOTE, which was to be announced in the Minister’s speech to the Lowy Institute on Thursday afternoon.
The six Collins boats are ageing and a program to extend their life until the arrival of replacements, initially the Attack-class submarines and now Virginia-class nuclear powered submarines, was identified in the 2009 Defence White Paper.
Scoping work started in June 2016 with ASC, the Commonwealth-owned platform systems integrator, initially focused on extending the service life of just three submarines, Farncomb, Collins and Waller.
Second pass approval was planned for 2023, with the expectation that each could be upgraded during the two-year full cycle docking maintenance program.
The core work was to update the main diesel engines, generators, power distribution and cooling and to add an optronics mast in place of the conventional periscope. The optronics mast was subsequently removed, reinstated then removed again.
Some other proposed capability upgrades were hived off into separate projects.
Total approved funding was $1.8 billion, which included procurement of long lead time items such as new diesel motors and generators for Farncomb and Collins.
In May 2026, Defence advised that design work was not complete and proposed upgrades could not be installed within a two-year full cycle docking period. It recommended that the LOTE delivery strategy should be changed.
That appears to have happened in record time as on 19 May, Minister Marles announced an abbreviated LOTE, with boats assessed and upgraded as required. That means not all will receive new engines and generators.
This work will extend each boat’s life by a decade, with a total budget of $11 billion.
That program was to start in May beginning with HMAS Farncomb, launched in December 1995 and commissioned in January 1998. The Farncomb LOTE will include a detailed engineering assessment to tailor upgrades and inform work required across the fleet.
The ANAO said the LOTE project was originally intended to mitigate risks with Defence’s transition from the Collins-class to the Attack-class submarines, a design derived from Suffren-class nuclear attack submarines designed and constructed by Naval Group of France.
One consideration was to align capabilities aboard upgraded Collins boats with those aboard the Attack-class boats.
But Defence failed to ensure that emerging risks to the Attack-class program or the fact that alternative submarine capability options were being examined, were disclosed to the personnel making key LOTE scope, procurement and design decisions.
“Following the cancellation of the Attack-class program, the LOTE became critical as the bridging capability to support the transition to delivery of the nuclear-powered submarines under the AUKUS trilateral partnership,” the ANAO said.
“When the Attack-class program was cancelled in 2021, the rationale for the alignment strategy no longer held. Defence did not systematically reassess the scope, delivery strategy or available options for the LOTE, nor did it present alternatives or advise government of the risks in a timely way.”
The ANAO said Defence’s early decision to align the LOTE project with the Attack-class submarine program created significant interdependencies between the two projects.
While this approach offered potential efficiencies if the Attack-class program proceeded, Defence did not present alternative options to government and did not reassess the delivery strategy when the underlying assumptions changed, it said.
In March 2026, Defence proposed an alternative LOTE strategy, to refurbish and maintain existing systems instead of redesigning and replacing them for up to five of the six Collins submarines.
“This represents a fundamental shift in the delivery strategy for the project. In May 2026, Defence recommended and government agreed to this revised delivery strategy,” ANAO said.
A detailed analysis of the Collins LOTE program will appear in the July/August issue of ADM.