Australian documents showed that the French submarine project was in jeopardy for years

SYDNEY, Sept. 21 (Reuters) – France shouldn’t have been surprised Australia canceled a submarine contract as major concerns about delays, cost overruns and suitability have been officially and publicly voiced for years, Australian politicians said.

Paris has called back its ambassadors from Canberra and Washington, saying it was caught off guard by Canberra’s decision to build nuclear submarines with the United States and Britain rather than sticking to its French diesel submarine contract. Continue reading

But as early as September 2018, an independent supervisory body led by former US Secretary of the Navy Donald Winter advised Australia to look for alternatives and questioned whether the project was in the national interest, according to a public report by the country’s audit office Year 2020. General shows.

Australian parliamentary hearings and reports on the project, initially valued at $ 40 billion and finally valued at $ 60 billion even before construction began, also revealed problems emerging. In June, the Defense Minister informed Parliament that “contingency planning” for the program was under way.

“You’d have to keep your eyes closed to hide the danger you were facing,” said Rex Patrick, an independent senator for South Australia, with a view to France.

Government ministers said this week that Canberra had been “up front” with Paris on the problems.

A French lawmaker also raised questions in Parliament in June about Australian concerns about delays and whether Australia might be considering submarine alternatives, French Parliament records show.

“We made a decision not to go through a gate in a contract,” Prime Minister Scott Morrison told reporters when he arrived in New York on Monday. “The deal was designed like this and we decided not to go through it because we felt it would ultimately not be in Australia’s best interests.”

French officials deny the contract had been plagued by problems for years, saying difficulties had been resolved at each stage and they expected the contract for the detailed draft phase to be signed in September.

The spokesman for the French Armed Forces Ministry, Herve Grandjean, made this clear on Tuesday.

“On the same day as the #AUKUS announcement, the Australians wrote to France to be satisfied with the achievable performance of the submarine and the progress of the program. In short, we are looking forward to the start of the next phase of the contract,” he said said on twitter.

The Australian and French defense and foreign ministers had “underlined the importance of the agreement”, according to a joint statement on August 30.

French officials have not denied that there were difficulties, as they do with any major treaty, but say the Australian authorities used “deceptions” and “tricks” for 18 months to hide the rival deal with the UK and the United States.

At no point had Canberra proposed to Paris to offer an alternative nuclear-powered program, despite French officials having raised the issue in recent months.

An official at the French embassy in Canberra said an intergovernmental agreement should have allowed confidential talks between ministers about changes in political or strategic circumstances.

“No warning, no suggestions for discussion have been made,” said the official, speaking on condition of anonymity because of the sensitivity of the matter.

OFF-RAMPS AND GATES

(File photo) A Rivercat ferry sails past the Royal Australian Navy’s Collins-class submarine leaving Sydney Harbor on May 4, 2020. The Australian government has considered extending the life of the Collins class while investigating the fate of its next-generation subroutine./File Photo

The deal was first announced in 2016. A pre-design review was postponed in 2018 because the “work provided by the Naval Group for defense did not meet Defense requirements,” said the Australian audit incomplete, citing missing construction details, operational requirements and 63 studies.

The contract between Australia and the Naval Group, majority-owned by the French government, was signed for 16 months at the end of February 2019.

It included contractual exits where Australia could pay to get out of the project and established “control gates” where the Naval Group must meet criteria before moving on to the next phase. The Department of Defense looked at these “breakpoints” for assessing project risk, the auditor-general said.

In September 2019, after spending A $ 446 million ($ 325 million) in France, the Department of Defense informed the auditor that it would extend the life of the Australian Collins-class submarine fleet “and the time it takes this would allow for the development of a new acquisition strategy ”. .

The 2020 auditor-general’s report investigating the Department of Defense’s largest ever submarine deal found that the department had acted “openly and timely” in communicating concerns with the Naval Group.

Naval Group said in a statement to Reuters that it was aware of the public discussion but that official statements support the submarine program. Morrison is “very clear that the decision is not due to difficulties with the Future Submarine Program or the Naval Group”.

“The Naval Group has fulfilled its commitments to the Commonwealth of Australia as confirmed in the cancellation letter we received for simplicity,” the statement said.

REVIEW PANEL

According to the Auditor-General’s report, the most recent major milestone in the French contract – a preliminary draft review – was in January 2021.

An industry source with direct knowledge of the matter told Reuters that Naval Group Australia provided defense material “in late January or February” but that Australia did not believe it met the requirements.

Morrison’s office set up a panel in January to advise a narrow circle of his cabinet on how to proceed with the program, according to the treaty notices and parliamentary papers.

In June, senators, including Patrick, asked panel chairman William Hilarides, a former Vice Admiral in the US Navy, whether he had advised the government to terminate the French treaty.

Hilarides, who oversaw the construction of ships and submarines for the U.S. Navy, said the panel’s advice was confidential.

Former head of BAE Systems Submarines, Murray Easton, who turned around a belated British nuclear submarine program, joined the panel in February, contract notices show.

It met ten times by video conference until June, including confidential briefings for its US members in the Australian embassy in Washington, the parliament said.

Easton and Hilarides did not respond to requests for comment.

($ 1 = 1.3755 Australian dollars)

Reporting by Kirsty Needham; Additional coverage from John Irish in Paris; Editing by Gerry Doyle and Alison Williams

Our Standards: The Thomson Reuters Trust Principles.