The reduced Collins-class submarine Life-of-Type Extension (LOTE) program, announced on 19 May, will cost more than previously expected and deliver less capability. The government’s decision to cut back the scope of the work also increases the risk to Australia’s possession of a modern, crewed submarine capability in the next decade.
AUKUS remains the best partnership for Australia to acquire the nuclear-propelled submarines necessary for Australia to manage the most dangerous era since World War II. But the now elevated risk of losing adequate conventional submarine capability in the meantime strengthens the case for preparing a Japanese fallback option.
Canberra should approach Tokyo to see how it could buy or lease Japanese submarines should they be required in the 2030s.
The Collins-class LOTE program as originally planned was always highly risky, so cutting back what will be done to the six submarines to keep them going is an understandable and responsible move. Instead of a more extensive LOTE, equipment on the submarines will be repaired and replaced as judged necessary for each boat. Sensors and weapons will be replaced where possible. The focus will be on maintenance and safety rather than enhanced capability. Replacement of the diesel engines and generators will be done only if judged to be critical.
The cost of the reduced LOTE is estimated at around A$11 billion, double what had been estimated for the full LOTE. This is likely not just because the previous costs were probably greatly underestimated but also because old equipment on the submarines will be increasingly expensive to maintain. Critical elements such as the hulls and in some cases the propulsion systems will be approaching or possibly exceeding 40 years of service by the end of the next decade, increasing the risks to safety and likely requiring intensive monitoring and maintenance.
This raises the question of value for money. Even if all goes according to the new plan, Australia will pay around A$1.8 billion per boat to keep roughly its current level of conventional submarine capability, at best. In all capability aspects this does not compare favourably with new, modern conventional submarines. For example, Japan’s Taigei‑class submarines cost about A$600 million to A$700 million each. If further reductions to the scope of the LOTE occur – and the announcement yesterday leaves this prospect open, pending further engineering studies – a future government might decide that the running cost of an increasingly fragile and shrinking capability is not worth it and cut its losses. This could mean rapid retirement of older Collins-class vessels and even deciding not to extend the lives of some units, leaving a smaller and rapidly ageing submarine force until the arrival of nuclear boats.
The government plans that at any time three Collinses will be in deep maintenance, which will include life-extension work. Two of the remaining three are to be available for operations. Even assuming this can be achieved in what’s still likely to be a risky and technically challenging program, the life-extended submarines will possibly be less stealthy and probably have less endurance than previously planned. They will progressively fall behind newer regional competitors and probably be less able to undertake the full suite of required missions.
The reduction in planned submarine capability as a result of the de-scoped LOTE program increases the importance of achieving the remaining two key steps of the AUKUS Optimal Pathway, delivery to the Royal Australian Navy of US Virginia-class nuclear attack submarines (SSNs) and local construction of the follow-on Anglo-Australian SSN-AUKUS class.
The Virginias are due to arrive in the early 2030s, almost certainly not before 2032. But there is a significant risk that deliveries could be delayed – or even withheld if the US judges that it has too few SSNs for its own requirements. Since the Collins class is losing its competitiveness with age, delays to the Virginias and SSN-AUKUS could leave Australia without a modern crewed submarine capability for a decade or more – hence the need to get ready now for the Japanese fallback option.
As the ASPI report Hedging our Bets recommends, it is more than prudent to prepare now for the future contingency of rapidly buying or leasing conventional submarines from Japan (or even another partner) should these risks to Australia’s submarine capability emerge. The reduction in the LOTE program and resulting reduction in planned capability is a clear reminder that such risks are very real.
