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Budget 2018: Nothing shipshape: urgent changes required to Naval Shipbuilding Plan

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NOTHING SHIPSHAPE Urgent changes required to Naval Shipbuilding Plan The release of a damning Auditor-General's report on the execution of the Federal Government's Naval Shipbuilding Plan confirms and highlights concerns that both former Senator Nick Xenophon and Centre Alliance Senator Rex Patrick have previously raised.

"The Plan is unravelling fast and needs urgent adjustment," said Rex.

"High to extreme risk in the Plan, which could ultimately cause a blowout in the order of tens of billions of dollars, must be addressed immediately. So must the total chaos in workforce planning and mismanagement in the program."

Senator Patrick is calling on the Government to make immediate changes to the Plan:

Offshore Patrol Vessels (OPV)

 The Government must regain control of the OPV program - the program costs have already

blown out by $870 million and the Auditor-General has advised that Defence has no idea on what the sustainment costs for the program will be.  The Government must increase the number of OPVs built in Adelaide to at least four to help

bridge the valley of death - note that in August 2015, Defence admitted to former Senator Xenophon that they had done no cost analysis of splitting the build between SA and WA.

Future Frigates

 Reintroduce established and highly experienced Australian shipbuilders into the program -

leaked tender documents in August 2017 revealed that Australian shipyards were not permitted to take a lead role in the program.

 Slow down the selection process - FOI documents released to Senator Patrick in January 2018

shows that the Government's intention is to build a prototype hull starting in 2020 and commence the real build in 2022. In effect, the program is due for a 2022 start - everyone should recognise this.

Future Submarine

 Engage an industry-experienced program manager for the Future Submarine Project

management team - the Strategic Partnering Agreement negotiations are almost one year behind schedule, the Australian Steel Development and Qualification Plan 13 months behind schedule and the Australian Industry Capability Plan 12 months behind schedule.  Drastically de-risk the program - re-evaluate all developmental elements of the program

including the pump jet.


 Have ASC and/or Austal conduct all build work for the Future Frigates and Future Submarine

and transfer responsibility for workforce development to the commercial entities - the Government's Naval Shipbuilding College is already two and a half times over budget.  Don't just announce that 200 ASC workers are being transferred from the Air Warfare Destroyer

Program to submarine sustainment - actually transfer them.


 Open up all program planning documents to scrutiny.

 Release all Naval Shipbuilding Advisory Board's deliberations and minutes in relation to build


Centre Alliance fully supports the Naval Shipbuilding Plan but it has to be implemented properly.

"This is a program where all significant decisions were made before the Naval Shipbuilding Plan was released. The Government has taken a cart before the horse approach," said Rex.

"Minister Pyne is a nice guy and a good parliamentarian. That doesn't mean he makes a good shipbuilding program architect."

For media inquiries contact Chloe Preston on 0419 117 464