Labour and capacity constraints in South Australia could lead to cost blowouts and delays in the building of new naval vessels, Premier Mark McGowan said today, as he lobbied federal counterparts to move more maintenance work for existing submarines out west.
Labour and capacity constraints in South Australia could lead to cost blowouts and delays in the building of new naval vessels, Premier Mark McGowan said today, as he lobbied federal counterparts to move more maintenance work for existing submarines out west.
The federal government has been considering moving full-cycle docking (mid-life) maintenance work for the Collins class submarines from Osborne shipyard in Adelaide to Western Australia for at least a couple of years.
Perth’s Henderson shipyards are already used for mid-cycle and other maintenance work for the Collins class vessels.
Almost all the submarines are home ported at HMAS Stirling base at nearby Garden Island.
About 700 maintenance workers are employed by government-owned ASC in Adelaide for the full cycle docking work, while 450 people are currently working at the ASC’s Henderson yards.
Business News reported earlier this year that the Department of Defence was reviewing the impact of such a move.
Speaking at the Perth USAsia Centre’s Indo-Pacific Defence Conference today, Mr McGowan said the state had commissioned two reports which supported the move.
“It's in the national interest full cycle dockings happen here in WA because the submarines are based here,” he said.
“The closeness of industry to the navy base makes it appropriate the work takes place here.”
Mr McGowan said there was suitable spare capacity at the Australian Marine Complex at Henderson.
“South Australia is now going to be building $90 billion worth of frigates and submarines,” he said.
“I wouldn't like to see that work timeframe slip, and I wouldn’t like to see cost blowouts.”
Sustainment work should be undertaken close to where the vessel operated, Mr McGowan said.
“It is consistent with Australia’s geopolitical direction, and it is considered international best practice to conduct sustainment activities alongside where the submarines are based,” he said.
“Thats how its done in France, the US and China.”
The government said a strategic study by PwC found the plan would de-risk the Attack-class submarine and Hunter-class frigate building programs, worth about $90 billion combined.
“It would reduce the workforce pressure on South Australia, freeing up workers to concentrate on the ambitious build programs,” the government said.
“Moving the complete maintenance program to WA is critical in securing the Collins-class capability and ensures it is not impacted in the years to come as the workforce is focused on sustainment.
“The study also found the Osborne Naval Shipyard will face significant constraints, while Henderson in WA has the room for an expanded ASC facility.”
PwC’s 12-page presentation is somewhat light on detail about the extent of potential constraints in SA.
A second report, by ACIL Allen, estimates about $220 million of capital expenditure would be used to expand ASC’s Perth facility.
It would be operational by 2024-25.
Defence Minister Linda Reynolds said the federal government was not yet ready to make a final decision.
“I congratulate the WA government for this plan, which I received on Friday,” she said.
“I and the government will look at this closely.
“Whatever decision the government takes on this, both states will grow in terms of industrial opportunities and jobs.”