Comment
GEOFF CRITTENDEN – CEO, Weld Australia
A lack of local skills will impact nuclear submarine manufacture
Australia will need to rely heavily on the experience, skills and technology of the US and the UK in building and maintaining the newly-purchased nuclear submarines.
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N 16 September, Prime Minister Scott Morrison announced that Australia would no longer proceed with the Attack Class conventional submarine program to be built by Naval Group. Instead, Australia is set to build at least eight nuclear-powered submarines after striking a trilateral security agreement with the US and the UK. News of the termination of the $90 billion Naval Group contract was the single largest Australian defence industry announcement since the award of that very same contract. When the contract was awarded to Naval Group in 2016, it was quite contentious. Contract negotiations were tough, with some terms and conditions still not finalised five years on. Delays and cost overruns became inevitable. However, the cancellation of Naval Group’s contract is even more contentious, particularly given the Federal Government’s nuclearpowered replacement plans. Australia will need to rely
8 DECEMBER 2021 Manufacturers’ Monthly
heavily on the experience, skills and technology of the US and the UK in building and maintaining these nuclear submarines because we do not have a local nuclear industry. We don’t have infrastructure, skills, or experience in nuclear power—and none of this can be created overnight. There was general consensus that building the Attack Class Submarines would be a challenge for Australian industry—building nuclear powered submarines presents an inordinate number of issues. The skills, knowledge and expertise required to build a submarine are akin to those required to build a space craft chartered for the moon. Building a nuclear submarine is equivalent to building a space craft set for Mars and beyond. It is an entirely new quantum.
Local content requirements Without an existing nuclear industry, it will be difficult for any defence prime contractor building these nuclear-powered submarines to meet the local industry content
requirements that are included in all Defence contracts. While ambitious, the Federal Government’s local content requirements are of enormous benefit to Australian industry. However, without exception, they have been extremely difficult to execute effectively on recent Defence projects. There are a number of reasons for this difficulty. Firstly, the Defence projects are extraordinarily complex, requiring a highly skilled workforce, investments in cutting-edge technology and rapid upskilling. Secondly, the companies delivering these projects are global entities, with priorities that extend beyond Australia’s borders. Lastly, and perhaps most significantly, several of these major Defence projects were announced simultaneously. Local industry hasn’t been given the opportunity to keep up with the speed and scale of delivery expected. In some areas, and across some skillsets, there are gaps in the local industry. And this is in industries in which Australia already
has proven experience – let alone nuclear power. Mandating local industry content requirements is a powerful government tool that affords many benefits, but it is impossible to create industry capability and capacity overnight. As a result, the defence prime contractors can find themselves stuck between a rock and a hard place – the balance between delivering on time and on budget and meeting local industry content requirements becomes unworkable.
A lack of local skills While the Prime Minister has stated that the nuclear-powered submarines will be built in Adelaide, it’s not yet clear whether this will involve manufacturing, or just assembly of US or UK supplied parts. Although, given that there are no welders in Australia certified to the Standards required for nuclear welding, it’s unlikely that manufacture will occur in Adelaide. This will obviously impact local industry content requirements, as well as upskilling, manmonthly.com.au
