Papalia’s push for subs to go West

Paul Papalia has been waiting nine months for a phone call from the federal government.

As Western Australia’s inaugural defence issues minister, Mr Papalia has spent the past three years shoring up the state’s economic position among the nation’s defence industries.

It’s a role created to help bolster the state government’s economic agenda and fulfil its election commitment of obtaining $195 billion of federal defence work by 2027.

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Mr Papalia has spent most of his tenure building WA’s visibility in the sector, forming state-led advocacy body Defence West and appointing rear admiral and former Lockheed Martin chief executive Raydon Gates as the state’s top defence advocate.

A significant amount of his attention, however, has been devoted to securing what is referred to within the defence industry as ‘full-cycle docking’ of Australia’s six Collins class submarines.

That work describes a process that occurs every 10 years, wherein the submarine’s interior is dismantled in order to extend its lifespan.

Full-cycle docking is currently undertaken in Osborne, South Australia, and is seen as especially lucrative given it employs about 700 people and brings $400 million into that state annually.

That’s on top of the fact the submarines will be commissioned well into the 2030s on the back of ongoing delays to the federal government’s $50 billion plan to build 12 Attack-class submarines.

The state government’s focus on full-cycle docking of the Collins class submarines cannot be understated, given Defence West was explicitly created with the intention of bringing the work to WA.

And although WA already undertakes all other maintenance of the Collins class submarines at the naval facility on Garden Island, located about an hour’s drive south of Perth, the more significant work component has remained in SA for several reasons.

One is because the submarines were built at the Osborne facility in the 1980s, when the SA-based Australian Submarine Corporation (ASC) was still a privately owned entity.

Moving the work to WA could also, by some estimates, cost as much as $1 billion in workforce relocation and infrastructure costs, and key figures within the finance and defence ministries have reportedly had little appetite to pursue the move as a result.

Political figures in SA have also worked tirelessly to retain the work, with home-state senator Rex Patrick leveraging his position on the crossbench to keep the work from moving west.

However, concerns have grown in recent years as some critics have noted the pressure that having multiple, highly-demanding defence contracts undertaken concurrently could put on SA’s workforce.

One report commissioned by the WA government and produced by PwC made the case that SA’s resources would be strained if it kept the work, given 5,700 people would need to be employed to simultaneously oversee production and maintenance works.

Other reports, such as one undertaken internally by the ASC in September of last year, came to a different conclusion, finding the skills, knowledge and capability of the workforce would be compromised if the full-cycle docking moved to WA.

SA Premier Stephen Marshall hailed those findings at the time as a blow to WA’s argument that it should receive the work.

That hasn’t stopped Premier Mark McGowan from repeatedly criticising his SA counterpart for running a state he views as overly reliant on federal contracts.

It was widely expected the federal government would make a final decision on the matter by the end of last year.

The recent bushfires and ongoing pandemic have tied up resources, however, and the issue remains unresolved.

That’s left Mr Papalia, who has lobbied the federal government for years to move the work to WA, impatient with what has become a protracted decision-making process.

He’s still waiting for a phone call.

“It’s high time the federal government made a decision on this matter because it’s in the national interest,” Mr Papalia told Business News.

“We’ve made the case very robustly that it should come to WA in the national interest, not just in WA’s interest.

“To get that task commenced in WA, even if it’s in the 2026 cycle, [the federal government] must make a decision and we must start training people and building infrastructure to facilitate it by that time.”

The state government has already primed itself to receive the work by spending millions of dollars renovating the Australian Marine Complex, located in Henderson, in preparation of possibly receiving full-cycle docking of the submarines.

That’s not including the $88 million that will be spent upgrading the manufacturing hub’s wharves, road intersections, and shipbuilding hall, as part of the state government’s post-COVID-19 stimulus spend.

And while the state government has made securing maintenance of the Collins class submarines part of its jobs agenda, Mr Papalia has repeatedly emphasised the strategic value in the move.

For one, he points to having commissioned major general Jeff Sengelman to author the state’s strategic plan, which outlines the case for WA to be the principal location for all submarine maintenance, sustainment and upgrades, by 2030.

The document was just one in a series commissioned and released by the state government throughout last year that made the strategic and economic case for moving all naval maintenance works to WA.

Mr Papalia argues those reports, along with the millions of dollars the state government has already pledged to upgrade the AMC in anticipation of possibly receiving full-cycle docking, proves WA should be the primary location for the work.

“Every other level of maintenance for the Collins class submarines is done in WA; this is the only task that is not done in WA,” Mr Papalia said.

“All the submarines are based in WA [and] we’re the closest point to the operational areas.

“This is a strategic state, and quite obviously, we have the capacity.”

Mr Papalia’s experience and background lends some legitimacy to the idea it is in Australia’s strategic interest to bring all docking work to WA.

That’s in part due to his more than 25 years with the Royal Australian Navy, during which time he rose to the rank of lieutenant.

Having entered politics as an outsider candidate for the seat of Peel in 2007, following the resignation of scandal-plagued incumbent Norm Marlborough, Mr Papalia won a comfortable double-digit majority on the back of his military background and opposition to the Iraq War.

His relatively unrivalled familiarity with both the needs of the defence force and its top brass meant he emerged an obvious pick for the defence issues ministry upon its creation in 2017.

Mr Papalia said his ambition was not purely to secure contracts for WA’s defence industry.

Instead, he said bringing the work west was sensible, given both the strategic implications and the vast amounts of money the state government had shown it was willing to spend to secure the work.

“[T]his task is critical because if the full-cycle docking capability is eroded through frigate builders and submarine builders poaching the workforce … then that puts at risk our operating capability,” Mr Papalia told Business News.

“This [Collins class] submarine is going to be our operational capability for a long time yet.

“It’s a strategic asset and a strategic capability and it should not be compromised.”