The Royal Australian Navy is unlikely to be able to field more than two submarines during the LOTE upgrade process. Photo: LSIS James McDougall, ADF.
The Collins-class submarine Life of Type Extension (LOTE) program has been continually beset with delays and design variations, an Australian National Audit Office (ANAO) report has found.
With the first of the six Collins boats due to enter its LOTE upgrade later this month, the release of the audit office report is particularly timely.
The audit report sought to examine the effectiveness of Defence’s planning and implementation of the LOTE, to form a conclusion about whether Defence effectively identified requirements and assessed options, whether Defence established effective governance, oversight and risk management arrangements, and whether Defence effectively undertook the necessary planning and implementation activities.
The six Collins-class boats entered Royal Australian Navy service between 1996 and 2003 and, at the time, each had a planned service life of about 28 years, with the boats scheduled to be withdrawn from service between 2026 and 2036.
But, initial delays in funding replacement programs as far back as 2009, followed by a decade of changed plans to initially acquire Japanese submarines, then the French Attack-class, and then AUKUS nuclear-powered submarines, has seen the Collins boats forced to soldier on without a replacement in near sight.
This has been amplified by poor availability of the Collins boats due to repeated sustainment issues, often meaning only one or two of the boats were available at any one time and seeing the project return to the Ministerial Projects of Concern list.
When it commenced in 2016, the scope of the LOTE would have seen the Collins-class upgraded with complex systems designed to integrate with the larger Attack-class boats – a conventional version of France’s Suffren-class nuclear powered attack submarine – that were then on order for the Navy.
But the Attack-class was cancelled in favour of Australia’s 2021 decision to enter into the AUKUS construct with the UK and US and acquire US Virginia-class and later, SSN AUKUS nuclear-powered submarines.
Since then, instead of plans to equip the boats with new engines and batteries, a new periscope and masts, and the Tomahawk land attack missile, the scope has been significantly reduced seemingly without any associated savings.
The ANAO’s report found that, since the LOTE system and detailed design contract was awarded in February 2022, it has been varied 53 times and has increased by $688 million, and four of the five key design reviews were not achieved on schedule.
The LOTE has been assessed by Defence as a high-risk project, even though its focus is now on refurbishing and retaining existing systems and equipment to maintain availability. As it stands now, the LOTE will now see the first Collins boat withdrawn from service in 2038, and the last in 2048.
The ANAO found that Defence did not manage the project in a way that was commensurate with its complexity, risk profile and strategic purpose, and that its approach to defining the scope, assessing options and advising government did not adequately adapt following the cancellation of the Attack-class submarine program.
It also found that Defence did not communicate emerging risks to the Attack-class program or alternative submarine capability options to the personnel making key LOTE scope, procurement and design decisions.
It noted that the February 2022 system and detailed design contract has increased from $125 million to $813 million, and that Defence has committed substantial funding without demonstrating commensurate progress against contracted milestones.
Shadow Defence Minister Senator James Patterson said the report reflected four years of dithering and delays by the government.
“[The report] has shown multiple opportunities over the previous four years for government to provide Defence with clear and timely direction following repeated warnings about the LOTE project,” he said in a statement.
“The result of this dithering has been to increase the risk of a serious capability gap in Australia’s maritime security.
“Collins-class submarines will be less capable and less available as a result of the Albanese Labor Government’s indecision.
“At times we may only have two submarines in the water – nowhere near enough for a maritime trading nation with supply chain vulnerabilities. This situation will get worse if there are any further delays in Collins sustainment or any slippage in delivery of Virginia-class submarines.”
Greens spokesperson on Defence Senator Shoebridge said the LOTE delays were what happened when there was a Defence establishment that failed time and time again, and that the major parties were linked to the AUKUS “gravy train”.
“This whole project has been a farce, with Defence signing a half-baked design contract in February 2022 that they have had to amend 53 times since, with the cost spiralling from $125 million to $813 [million] in that time,” he said.
“Once the Coalition and Labor decided to sink $375 billion on nuclear submarines, with no value for money assessment, no review, no analysis, it was always going to have damaging flow-on effects.
“It is a pattern of behaviour from Defence; they don’t explain what they are doing and are hostile to anyone seeking basic answers about AUKUS or the LOTE.”
