The decommissioned and rust-riddled HMAS Manoora and Kanimbla are both tied up at Garden Island awaiting disassembly expected to cost $10 million or more and HMAS Tobruk has only made one extended voyage - to Christmas Island - since February last year.

Defence has rejected claims its latest ship, HMAS Choules, lacks a full crew complement and says sufficient training has been carried out to ensure ship and crew ''can carry out any likely operational requirement asked of them''.

With the Choules purchase originally only intended to replace HMAS Manoora, which was marked for death last January, the navy is still well down on amphibious ship capacity.

Manoora's sister ship, HMAS Kanimbla, was formally pulled out of service last November and neither of the 41-year-old vessels had been operational since September 2010.

Meanwhile HMAS Tobruk is said to ''lack Mr Smith's confidence'' and has been described as ''fragile'' by Chief of Navy, Vice-Admiral Ray Griggs. Despite having had $6.5 million spent on it in recent times, it will not be ready to return to service until at least the end of this month.

The amphibious fleet problems are compounded by serious issues with the replenishment vessels. HMAS Success, the east coast oil tanker and replenishment vessel, needs $200 million worth of additional work if its operational life is to be extended by five years from 2017 Defence has said.

This is on top of the $35.8 million that has been spent on the ''ship of shame'' that has been the centre of numerous sex scandals and inquiries costing millions of dollars since it went to Singapore for an upgrade in December 2010.

HMAS Sirius, the west coast ''fleet oiler'', needs to carry a separate fuel store as it can't use the same fuel as the rest of the fleet.

And, according to an Australian Strategic Policy Institute Report, because it started life as an oil tanker it is meant to sail either full or empty, not somewhere in between. ''There are some sea-keeping problems as a result.''

Other issues include that helicopters can't be flown off the flight deck and it is too slow to keep up with a naval taskforce. It has been reported these problems are so grave the Sirius may be withdrawn from service before the end of its planned 15-year life.

Because Australia is a two-ocean navy, three if you count the southern ocean, at least two major replenishment vessels are considered necessary.

HMAS Success, described as ''anything but'' by one insider, has not been operational since December 2010 and may not be fit for duty until August - if all goes well from here.

One industry source said despite the well-publicised Rizzo review and a spate of ship acquisitions - including HMAS Choules which was commissioned just ahead of the cyclone season late last year, ''bugger all'' had been achieved since Mr Smith gave the leadership of the senior service and the DMO a very public caning at the Australian Defence Magazine Congress last February.

''The 'can do, make do' culture [the minister criticised at that time] is still alive and well,'' he said, noting there was no clear indication Defence would bite the bullet and cough up the cash to fix HMAS Success for once and for all.

Others are more charitable, saying attention was being paid to the recommendations of the Rizzo report but that the problems are taking longer to fix than anticipated.

''Navy is serious about Rizzo; the chief of navy has an implementation team in place and whenever you here talk about doing something with ships or new capability Rizzo is constantly mentioned.

''It is hard to see what has changed because navy and the DMO is still playing catchup with the backlog of maintenance on the old ships - but as this is being conducted Rizzo features strongly.''

A visibly angry Mr Smith had told surprised 2011 ADM congress delegates there was a view ''major support ships are not subject to the same level of risk as submarines as aircraft, almost a perception HMAS Manoora and HMAS Kanimbla are second-class ships''.

''Maintenance and sustainment must be bread and butter business for Defence, the Defence Materiel Organisation, for navy and the Defence industry,'' he said.

Thirteen months on both HMAS Kanimbla and Manoora are gone, Tobruk is dodgy and there are mutineers on the chief of navy's own quarterdeck questioning the wisdom of spending $130 million of Defence treasure on a new boat for customs when so much core capability is going begging.

The Canberra Times drew fire from both Vice-Admiral Griggs and Mr Smith last week for quoting a defence insider as saying the $130 million purchase of the Skandi Bergen - a sister ship to customs' Ocean Protector - was an exercise in deception.

The source said Defence was misrepresenting the ship, described by its own builders as a ''multipurpose support vessel'', as an ''amphibious vessel'' in a bid to make it appear something is being done about the capability gap. It had actually been bought to meet a Border Protection and Customs specification.

Vice-Admiral Griggs, not surprisingly, rejects any suggestion the Skandi Bergen is a fraud and brings nothing to the navy's table - even though she will never be operated by a navy crew.

He says it qualifies as an amphibious vessel because - if operated in conjunction with ''other RAN assets that make up the overall amphibious capability'' - it can ''land and support troops and equipment free from established port infrastructure''.

This claim has been met with scepticism by some.

One maritime executive said any navy ship, including patrol boats, missile frigates - and probably even the Collins-class submarines - qualified as amphibious on that basis.

When asked if the definition would raise eyebrows across the fleet, a Defence spokesman said: ''The chief of navy is not suggesting every vessel in the fleet is an amphibious asset, he was merely pointing out a 'roll on-roll off' capability is not the defining feature of an amphibious vessel.''

AMI International defines amphibious ships as ''ocean going vessels capable of conducting amphibious operations with either embarked aircraft or landing craft''. Under AMI's definitions the Skandi Bergen would qualify as a fleet auxiliary but nothing more.

One thing the purchase will do is to allow sister ship, the Ocean Protector, to concentrate on its primary focus - border protection and customs duties. Ocean Protector was press ganged into service as part of a number of ad hoc arrangements to create an ''amphibious capability'' in the wake of the Tobruk debacle last year.

Defence maintains the decision to buy Skandi Bergen, a sixth C-17 Globemaster and long lead items on a new batch of Bushmaster troop transports had nothing to do with avoiding a Defence budget underspend for the second year in succession.

Defence refused to say whether there would have been an underspend in its 2011-12 budget if it had not ordered the $425.5 million in unprogrammed spending.

''Updated details of Defence's budget estimate for 2011-12 will be released in the usual way in the May budget,'' a spokesman said. ''Defence has proceeded on the basis there will not be a significant underspend in 2011-12.''

DEFENCE RESPONSE

Defence has rejected many of the assertions about the state of the amphibious and sustainment vessels in this report. Here is a summary of the key responses:

HMAS Success: ‘‘The current Defence Capability Plan includes project 1654 Phase 3 to replace HMAS Success, whose life of type ends in 2017. ... If it is determined by government that HMAS Success’s life is to be extended, the cost would be in the order of $200 million for a five-year period beyond 2017.’’ This needs to be read in conjunction with an earlier response that played that cost down: ‘‘The Current Defence Capability Plan includes the Project SEA 1654 Phase 3 to replace HMAS Success. In addition to maintenance and repair costs, the department has received recent advice indicating that extending the life of HMAS Success for five years beyond the current planned withdrawal date of 2018 would require expenditure of just in excess of $20 million.’’

HMAS Sirius: ‘‘The Chief of Navy is satisfied with the capability that Sirius provides.’’

HMAS Tobruk: ‘‘In January-February 2012, while assigned to Operation Resolute (January 13 to February 25, 2012, as standby Navy Major Fleet Unit), HMAS Tobruk has been as far as Christmas Island. Tobruk has shown improved reliability since its maintenance period last year. HMAS Tobruk is now 31 years old and, as with any ship of this age, the ship needs to be carefully managed. The Minister agrees with the Chief of Navy.’’

Current refuelling capability: ‘‘The RAN has the auxiliary oiler, HMAS Sirius, fully operational and currently at sea. Navy does not currently lease a replenishment tanker. HMAS Sirius is being complemented by the participation of the Royal New Zealand Navy’s tanker, HMNZS Endeavour, in RAN training activities at sea. We do not have an absence of a fleet oiler at this time. Further use of the Endeavour is on a case-by-case basis.’’

HMAS Choules: ‘‘Defence inquired at the time as to whether a second (Bay Class) vessel was for sale and was consistently advised by the United Kingdom Ministry of Defence that this was not the case. HMAS Choules has a full crew complement and sufficient training has been carried out to ensure she can carry out any likely operational requirement.’’

Skandi Bergen: ‘‘Skandi Bergen has been purchased on Defence advice, including that of the Chief of Navy, as interim capability to assist in Navy’s current amphibious transition.’’ The Chief of Navy, in a letter to The Canberra Times, said: ‘‘To claim that the ship has no amphibious capability is simply wrong. A roll-on-roll off capability is not what defines a ship as an amphibious vessel.
‘‘It is the ability to land and support troops and equipment free from any established port infrastructure [such as wharves] that is the key qualifier. Skandi Bergen has this ability in conjunction with other RAN assets that make up the overall amphibious capability [HMAS Choules, HMAS Tobruk]. This [the purchase of the Skandi Bergen] is an effective, efficient and value for money purchase for the Commonwealth.’’

Rizzo review: ‘‘Progress is well under way in implementing the recommendations of the Rizzo review. As identified in the Rizzo review, the management of the amphibious and afloat support force was inadequate. The subsequent maintenance activity for Success and Tobruk were part of the rectification of some of the issues.’’