SOVEREIGNTY AND THE CURIOUS CASE OF THE ATTACK CLASS SUBMARINE MAIN BATTERIES
September 17, 2022
Sovereignty and the Curious Case of the Attack Class
Submarine Main Batteries
By Brent Clark
As the debate rages as to how best achieve the Governments stated requirement to establish a sovereign industrial capability to ensure that Australia can be as self-reliant as possible when it comes to the support of the nation’s defence equipment a strange decision was made.
In March this year there was an announcement made by Naval Group that Australia’s main battery supplier to the Collins Class submarines was awarded contracts for studies and the design of the Attack Class submarine.
The ‘awarding’ of these contracts was not to be the sole source supplier, rather the Australian company was awarded a contract to compete with the Greek company Sunlight Systems.
Despite being the supplier of submarine main batteries for Australia for around 30 years, despite the fact that the Australian company has been funded to undertake expensive R&D activities into submarine batteries, despite the fact that the Federal Government funded the company to build new facilities to clear the path for the submarine construction yard in South Australia – the decision was made to put the Australian company into a competition with a foreign owned company with zero presence in Australia.
An interesting point to note is that in February, a month prior to the Australian competitive process being announced, the Executive Vice President Development Naval Group, Alain Guillou, released Naval Groups long term cooperation plan, developed to support the acquisition program for two Frigates for the Hellenic navy, in this launch he also stated that Naval Group had been working with Hellenic industry for many years and that Sunlight Systems in particular is a strategic supplier for Naval Groups submarine programs.
Submarine main batteries are one of the top five equipment sets for the Attack Class submarine, the others being; the submarine main motor, the weapons discharge system, the diesel generators and the main DC Switchboards. These four systems were awarded sole sourced to overseas suppliers and at least in one case the logic of not undertaking a competitive process for the main motor supplier is not readily obvious, given the battery decision. The rationale of ensuring the best technology available to be part of the Australian program produced in a competitive, value for money way should (if we follow Defence’s argument) mean that wherever possible competitive processes are undertaken.
Defence has released guidance on what constitutes sovereign industrial capability priorities, according to Defence these priorities are capabilities that are critical to Defence and must be developed or supported by Australian Industry. These include Collins Class submarine maintenance and technology upgrade and continuous shipbuilding (including submarine acquisition), they specifically mention in their own document that particular importance is placed on submarine endurance and that endurance includes batteries for energy systems. In the continuous ship building and submarine acquisition section Defence clearly states that Australian Industry will need to be integrated into global supply chains.
Unless Defence has made the decision that submarine endurance and therefore submarine batteries will not be a sovereign industrial capability for the Attack Class submarine, it would appear that on every measure the Australian SME PMB is a sovereign industrial capability.
The creation of sovereign industrial capability is fully supported and given the reality of the COVID-19 pandemic and how exposed Australia was to the requirements of foreign Governments own domestic pressures combined with the hit to the Australian economy, it should be a requirement of Government to all government departments, not just Defence, that Australian industry is initially sourced to supply equipment. If Australian industry cannot supply 100% of a piece of equipment, then measures need to be put into place to understand why not, and what is needed to ensure that it can.
There should only be very specific equipment that are not sourced domestically or at the very least involve some measure of Australian Industrial input.
But what of PMB and the decision made by Defence to compete a sovereign capability?
This Adelaide based Australian SME has been at the forefront of battery technologies for decades and it continues to expand its’ footprint globally. Earlier this year the company secured the battery design contract for the UK Ministry of Defence and it will do this with newer Nickle Zinc battery cell technology. It has also recently acquired the EnerSys’ submarine battery business and secured the contract to supply the Royal Canadian Navy with submarine main batteries. This Australian SME continues to grow its domestic footprint at the same time continuing to increase its defence export market, another requirement of the Australian Government. Should PMB be unsuccessful in securing the Attack Class opportunity the potential to damage its global position is obvious.
But sovereignty also provides the Australian Government with technology control, if we accept that Australian companies produce world leading technology, then the Government should be able to control where that technology goes and have the ability to develop these technologies for the sole benefit of Australia and Australia’s allies.
The only way to ensure that there is no military technology leakage is for the Government to have the right to refuse export sales, this currently exists with PMB, there is no ability for the Australian Government, nor Defence, to prevent a Greek owned company selling technology anywhere and to whomever it chooses.
AIDN has consistently advocated for Australian companies to be able to compete in a fair and equitable manner, we acknowledge that there are occasions when equipment may require to be sole sourced as the capability and the ability to supply from within the Australia market does not exist or the equipment provides a unique and necessary capability. If a company like PMB, a company that is by Defences own definition providing a sovereign capability, a company that has been supplying to Defence for decades, if this company does not justify being sole sourced then it is hard to imagine a scenario where any Australian company can be. This decision further undermines Australian companies already sceptical opinion of the procurement system.