A furious Defence Minister, David Johnston, went on the warpath in the Senate on Tuesday, basically telling the Government-owned the Australian Submarine Corporation (ASC) it has no chance of getting the $20-plus billion contract to build 12 new submarines to replace the Collins Class.
The senator launched a tirade against the ASC after being pressed by Labor over his pre-election promise to build the subs locally, saying he wouldn’t trust the Adelaide-based shipbuilder “to build a canoe”.
Senator Johnston said the cost would blow out $80 billion if the subs were Australian made and claimed the ALP already knew that.
ASC general manager Stuart Wiley previously estimated the cost to build 12 subs in Adelaide was between $18 and $24 billion.
The defence minister pointed to a $350 million blow out in the ASC’s A$8 billion, 2007 contract to build three Hobart Class air warfare destroyers (AWDs). The first ship is due to be commissioned in early 2016, two years late.
“They’re $350 million over budget on three AWD builds. Now I’m being conservative, it’s probably more than $600 million, but because the data is bad, I can’t tell you,” Johnston said.
“You wonder why I’m worried about ASC and what they’re delivering to the Australian taxpayers? You wonder why I wouldn’t trust them to build a canoe?”
It’s not the first time the minister has fired a shot across the bows of the ASC, having attacked it over cost blowouts in June, just before he announced two new Australian Navy ships would be built overseas.
In the Senate yesterday, Senator Johnston also attacked the shipbuilder over its maintenance program for the Collins Class submarines it built.
But late on Tuesday Prime Minister Tony Abbott’s office released a statement distancing himself Senator Johnston’s attack, saying that changes to the submarine maintenance program had seen it exceed Navy targets.
“This has improved the availability of our Collins Class fleet to defend our national interests,” the PM’s office said.
It said the government was working with ASC on a reform strategy to improve shipyard performance and productivity.
“It is early days, but the Government is confident that ASC and its partners will successfully turn the corner on this important build.”
The Coalition’s Commission of Audit recommended privatising the ASC.
Business Insider Emails & Alerts
Site highlights each day to your inbox.