Interview with ABC – Visit to Japan

QUESTION:

Minister, thanks for your time. First of all, your trip to Kobe. You’ll be looking at the Soryu for the first time, what do you expect to get out of that?

MINISTER ANDREWS

Look, essentially my trip is a goodwill trip. Just as I went to Kiel in Germany and Cherbourg in France, it was to obviously inspect the manufacturing of submarines in each of these three countries and to say to each of these countries, Japan included, that this is a competitive evaluation process and we are looking forward to their participation in that because we think through this Australia will get the best result.

QUESTION:

Is there anything though in particular that you will be looking for? Obviously, you will be looking for the first time, you’ve heard a lot about it – obviously you have read a lot about it. What in particular will you be looking for?

MINISTER ANDREWS

Look, I’m not the expert so far as it comes to submarines, my job is to oversee the process, to ensure as best I can that this is one that is carried out with upmost integrity and that at the end of the day we’ve assessed the submarine which is going to best suit our capabilities, given that this is a very long-term project. These subs will be ten years or so before they are built and they will still be in operation in close to fifty years time.

QUESTION

What…just the basics here…what’s attractive about the Soryu? What do you think makes it a strong contender for Australia’s future subs?

MINISTER ANDREWS

Well, first of all, there’s no such thing as an ‘off-the-shelf’ model of submarine, and in each case there are modifications and changes that would need to be made.

The Japanese submarine is about the size that we are looking for in Australia, but obviously it requires changes. What we want is a submarine which has the endurance of the Collins; that has superior stealth capacity to the Collins, and; is one which is going to be interoperable in terms of the weapons system with the US.

Now, that’s going to require design changes and modifications in the case of whichever submarine we buy from, which ever country, and so it’s important that each of the countries, Japan included, understand that.

QUESTION

And how important is that strategic factor, obviously the capability is one of the major concerns in terms of picking a winner, but strategy is important here isn’t it? I mean, does Japan have an edge in terms of strategy? I’m obviously talking about the tri-partner relationship between the US, Japan and Australia. How critical is that?

MINISTER ANDREWS

Well in order of precedence, it’s capability, capability, capability. After that, then there are a range of factors including things that go to where it’s going to be manufactured or partly manufactured, there are options there. Then there is strategic considerations, there’s industry considerations. They will be well weighed in the process, but in the end it’s the capability of the submarine, because it’s one of the key pieces of defence equipment that a country has, that Australia has currently, and we will need in the future.

QUESTION

Obviously our relationship as we saw in Shangri-La, and of course you were there, has just been strengthened yet again. Isn’t that a critical factor here in terms of picking a side we are strongest with, as opposed to say Germany or France…they are on the other side of the world and granted their submarines may be built in Adelaide, but still to, in terms of having that interface, isn’t that really a critical element here?

MINISTER ANDREWS

It’s a factor, it’s an element to be weighed up in the process, but as I said, at the end what we want is a submarine that is going to serve our purposes, which means it’s got to have long endurance. As a conventional submarine it has got to have stealth capabilities that are as good if not better than the Collins class. They’re the key factors. After that there are a range of other factors. Quite clearly, our strategic environment is part of that, but that’s not the key factor. The key factor is capability.

QUESTION

Modifications – tell me about them. I mean, as you said earlier, every bidder will have to modify. What do you expect the modifications….well first of all, before we go there…..What do you expect of the modifications generally? What are our needs?

MINISTER ANDREWS

Well key modifications go to the weapons and also the communications command – all of those systems – the electronics on the submarine that make us interoperable with other navies, most particularly the US in this regard. So they are going to be key modifications who ever builds this submarine at the end, and we have to make sure that we get that right.

QUESTION

Are you worried in the sense that the Soryu is as you know, a very high-tech, sophisticated piece of machinery developed over sixty years. Are you worried, is there any concern, that if you modify you essentially lose the essence of what is the Soryu?

MINISTER ANDREWS

Well that has to be weighed up and that will be done by the Defence Department. I’m going to be appointing an expert advisory panel to make sure that there is probity in the system. We will be announcing that sometime in the next week or so. But whichever submarine we buy is going to involve modification, we understand that. What we need to know is what they are at the outset, have an understanding of what’s involved in make those design and modification changes, and ultimately we need to know what the cost is as well.

QUESTION

And obviously the other big issue factor here is, from both sides, but from the Japanese side, and we have seen them release some of their secret technology. Do you have any sense of, or any concerns again, that you may not get the whole package, the whole design the technology may not be released, because from their side in terms of national security, they may be concerned about leakages coming to Australia. Is there any sense of concern, how are you going to address that?

MINISTER ANDREWS

Look our sense at the moment is that the Japanese are aware of that; they want to cooperate in relation to this. They are obviously going through a major transition so far as they way they look at the defence of Japan, the way in which they relate to other countries, and matters of legislative changes in the Diet at the present time. There are obviously sensitivities in Japan, but at the same time we have requirements and if those requirements can’t be met we may well look elsewhere.

QUESTION

And the other issue there is I think, is that the Soryu has been tested and retested in terms of both, obviously in the shipyard by obviously at sea and you know that some people we’ve interviewed before – senior former defence personnel – say that the Germans and the French don’t have the same level of testing. The French will have to modify from their nuclear sub and the German’s haven’t got a sub big enough. Do you have any comment?

MINISTER ANDREWS

Well as I said, each of these submarines will need modifications. It is true, the French submarine, the Barracuda, is a bit bigger that what we are looking at and is a nuclear powered submarine so it would require modification to a conventional power source.

The German submarine is not a big as what we are looking for and would need to be up-scaled for Australia. But there is no off-the-shelf submarine that perfectly fits our needs. Each of these countries are going to have to modify it and I’ve detected so far a number of claim and counter-claim about each other’s product so far and I’m sure we will hear more of that in the next few months.

QUESTION

On the other side of course are the French and the Germans who say, quite rightly with some measure that the Japanese really have zero experience with huge defence projects like this.

MINISTER ANDREWS

As I said, there is going to be claims and counter-claims. This is a very competitive process. It is a huge military acquisition that’s got a lifetime value of something like $50 billion, so everyone is very keen about it. From Australia’s point of view, that is a huge advantage because in a sense it’s a buyers market.

QUESTION

Aren’t you concerned about the potential teething problems here? If there has been no history to work out what some of the issues are…Let’s say the Germans, however, I believe they have exported about 160 subs, if they haven’t got that corporate history, for want of a better term, in selling, what’s the concern there?

MINISTER ANDREWS

Well, two issues, first, every major defence acquisition has some teething problems. I don’t recall one that hasn’t. But we have to try and ascertain what they are in advance. And secondly, that is going to be part of the evaluation process. It will be looking at what potentially are any teething problems with Japan, Germany or France.

QUESTION

And the other big issue here is of course, is whether the subs will be built in Adelaide. How much of a factor will that be in terms of the winning bid?

MINISTER ANDREWS

Well what we have asked of the potential partners is to look at an overseas build, an in-Australia build, or a hybrid build. Now, I don’t know what they will come back with. I’ve already seen some publicity from various quarters about what they may or may not do. But until we get the final bids towards the end of the year we don’t know and it may well be that different countries put in some options in terms of what they are capable of doing in that regard. That’s part of the competitive evaluation process. Obviously the long-term sustainment and maintenance of these submarines is going to be in Australia. We have said that’s going to be centred on Adelaide. And the rule of thumb is that about two-thirds of the total lifetime cost of these projects is the sustainment and maintenance, which means that two-thirds of $50 billion is going to be spent mostly in Adelaide.

QUESTION

And do you have any concerns at all that with, say for example, the Soryu, it’s very high-tech, developed as you know over sixty years. At each stage year by year they are modifying it, they are improving it. The steel, the tension is incredibly difficult to replicate… do you think that the workers in Adelaide, in the shipyards in Adelaide, really are up to that task?

MINISTER ANDREWS

Well this really depends on what the bid is that is put in. I mean, I’m not going to pre-judge what each country might do, and there are a variety of options that are open to them. It may well be that workers are trained in the country where the winning bid comes from and then return to Adelaide. It could be that workers from that country go to Australia, I just don’t know and I would be speculating as to what that bid might be as I suspect there will be a range of options that are put to us.

QUESTION

Can you at this stage can you speculate (laughter) on the German and French, is there any sense … (laughter)…

MINISTER ANDREWS

(laughter) Good try, good try…

QUESTION

…Is there any sense that you are getting from them….

MINISTER ANDREWS

No, look I went to Kiel and I was very impressed by the shipyard there. I then went to Cherbourg a day later and I was equally as impressed by the one there. I am sure I’m going to be impressed by what I see at Kobe because what we are talking about is three countries that are the leading countries in terms of making submarines in the world. And I expect that the Japan operation will be equally impressive. But at the end of the day that’s not the issue – it’s not what I see on this tour. It’s basically hard-nosed assessment of what’s going to meet the capability requirements Australia needs for the next half century.

QUESTION

Thanks for your time.

MINISTER ANDREWS

Pleasure.