ZCZC
BCN-38
AUSTRALIA-BUDGET-SUBMARINE
Australian submarine project 130 billion USD over budget: expert
CANBERRA, Sept. 24, 2018 (BSS/Xinhua) – An Australian submarine deal with
France is facing a 400 percent cost blowout, a leading critic has warned.
The Australian government in 2016 awarded France’s DCNS a 50 billion
Australian dollar (36 billion U.S. dollar) contract to build 12 submarines
for the Royal Australian Navy.
The project has been plagued by problems and Robert Gottliebsen, a leading
business analyst for The Australian newspaper, on Monday warned it was facing
a significant cost blowout.
“I think we can say that the nation of Australia faces a 225 billion AUD
(163 billion USD) plus bill for 12 submarines,” he wrote.
“And the first submarines will not be available for at least 14 years, but
the Rear Admiral (Gregory Sammut) believes they will still be useful up until
around 2080.
“Of course, the way technology is moving in the defence space, conceivably
they could be outmoded before construction is finished in the late 2030s.”
“According to Australian Strategic Policy Institute (ASPI) we were looking
to spend about 30 percent of our estimated defence capital on these 12
submarines.”
DCNS beat German shipbuilder TKMS for the contract despite the German
company offering a price of 20 billion AUD (14.5 billion USD).
Rex Patrick, an Australian Senator who previously served as a Royal
Australian Navy submariner, in January said that the program was “starting to
go a little bit off the rails.”
“Rear Admiral Sammut is a highly respected and highly capable naval
officer, however he’s never run a major project, he’s never run a minor
project,” Patrick said.
“There are a number of highly qualified, highly experienced project
managers in the mining industry, in the chemicals industry, in the IT
industry that can be brought in to offer assistance for this extremely
important program.”
BSS/XINHUA/HR/1500