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Contractor harpoons submarine estimates

A major Australian defence contractor has sponsored a leaked paper which claims it would cost less than half the $36billion experts say it will take to design and build submarines in Adelaide.

The paper, to be published by Defence think-tank The Kokoda Foundation on January 19, has been written by the Australian Submarine Corporation's former strategic analyst, Brice Pacey.

ASC built the six trouble-plagued Collins Class submarines and is desperate to secure the contract to build the 12 replacements.

Experts say this would cost $36billion - at the very least. Mr Pacey's paper, according to News Limited reports, said the job could be done for $18 billion.

Sources say the Pacey report is almost 100 pages long, took months to complete and any cost estimates included are clearly spelt out and dependent on a range of specified conditions.

Mr Pacey declined to comment yesterday.


An ASC spokeswoman said the company would not comment on the paper before its official release. ASC would not deny it had sponsored the document and acknowledged it, with ''at least 40 other organisations'' had been involved in its preparation.

Comment has also been sought from The Kokoda Foundation.

Australian Strategic Policy Institute senior analyst, Andrew Davies, does not believe 12 locally designed submarines can be built in Adelaide for $18billion - or anything close to that. He was co-author of a report earlier this year that predicted it would cost $36billion - or more - to bring such a fleet into being.

''If Mr Pacey has been reported accurately then this [the $18 billion figure] is an extraordinary claim,'' he said.

''Extraordinary claims, in the words of Carl Sagan, require extraordinary evidence.''

Mr Davies said the figure needed to be taken with a very large grain of salt given recent experiences with both the Joint Strike Fighter and the $8 billion Air Warfare Destroyer.

He said the cost of the Hobart-class AWDs, being built by an alliance made up of ASC, Raytheon Australia, and the Defence Materiel Organisation, had originally been estimated at $4billion.

''It then went to $4.5billion, then $6billion and, when the contract was finally signed, $8billion.''

Mr Pacey, a Kokoda Foundation board member, wrote a 2010 paper that called for a fourth AWD to be built. That paper was sponsored by ASC, Jacobs and Lockheed Martin.

Lockheed Martin is a capability partner in the AWD project along with Navantia and the United States Navy.

Acoustic Force chief executive and former submariner, Rex Patrick, warned any attempt to build a ''half-price super submarine'' was doomed to expensive failure.

''When it all starts to go wrong it will make the Collins $800million plus per annum [sustainment] program look ridiculously cheap,'' he said.

''Any government that ignores the cold hard facts of Collins would be being more than just cavalier with tax payers' money; they would be failing in their duty of governance.''

It is common practice for military think tanks, such as The Kokoda Foundation, to receive corporate sponsorship across the board and for specific research projects.