Press Conference, Parliament House – 5 March, 2015

KEVIN ANDREWS:          

Thank you very much ladies and gentlemen. It’s certainly been a week for decision and delivery in defence and I have with me this morning Rear Admiral Mark Purcell who is the head of Maritime Systems Division at the Defence Materiel Organisation.

Today I want to announce on behalf of the Government the request for tender for the replacement, Australian made, of the Pacific Patrol Boats under the Pacific Maritime Security Program. What’s known as project SEA3036 Phase 1.

This project represents a significant investment in Australian defence industry with the Australian made patrol boats worth $594 million in addition to the life sustainment and personnel costs estimated at $1.35 billion over the next 30 years.

This announcement is obviously good news for defence industry in Australia but it’s also good news for our engagement in the Pacific region. In December last year the Government announced a plan that will allow for a sustainable naval shipbuilding industry that supports ship building jobs in Australia.

We recognise the significant value to our nation of having a skilled naval shipbuilding force as part of our continued commitment to maritime security in the Pacific region. This project will involve the construction here in Australia of up to 21 steel hulled replacement patrol boats for our Pacific Island neighbours.

The replacement patrol boats have been offered to all current participating states which includes; Papua New Guinea, Fiji, Tonga, the Solomon Islands, Tuvalu, Kiribati, Samoa, Vanuatu, Federated States of Micronesia, Palau, Republic of Marshall Islands, the Cook Island as well as a new member namely Timor-Leste.

Following this tender process which I’m announcing today the Government is likely to make further decisions about the project either towards the end of this year or early in 2016.

And on that note can I ask Rear Admiral Purcell to say a few words about this project.

REAR ADMIRAL MARK PURCELL:

Thank you Minister. This commitment will assist the Pacific Island countries to continue to take an active part in securing their economic exclusion zones. The replacement vessels will be larger and more capable than the current fleet, they will also have greater sea keeping capability, habitability and endurance and will be updated for contemporary operating environment.

The request for tender process will be an open tender for both the procurement and sustainment of the replacement vessels. Along with the sustainment of the current pacific patrol boats until their end of life as well as the new Tongan landing craft medium.

Under the essential requirements of this request for tender the replacement vehicles will be built in Australia and will be of steel construction. The key requirements for these vessels are;  to be designed and constructed to commercial standards; simple and cost-effective to own, operate and maintain; weapon systems will not be fitted, but allowance made to military standards; a speed of greater than 20 knots in top of Sea State Four; a range of 2,500 nautical miles at 12 knots with 20% burnable fuel remaining; a mission duration of 20 days; a length up to 40 metres; capable of operating to the top of Sea State Four; accommodation for 19 crew with 23 berths; and an embarked Sea boat will be capable of speed of greater than 20 knots, operating at the top of Sea State Four, and with a crew of 6 or 8 desirable.

And the request for tender documentation will be released by defence through the Aus tender process and that’s expected to occur today.

KEVIN ANDREWS:

Thanks very much Rear Admiral, now any questions?

QUESTION: 

Minister, may I ask the Rear Admiral, can you please explain for the land lubbers amongst us what sea state 4 is? How often you’d find that, how bad the seas get up to our north. And can I also- has the Navy now made a decision to go for steel rather than aluminium generally, or is this just a one-off?

REAR ADMIRAL MARK PURCELL:  

So I’ll take your question in two parts. Sea state 4 is a- and we measure the state of the oceans, it’s a combination of wind, it’s a combination of swell, it’s a combination of other environmental factors. Sea state 4 gets up around- wave heights of around 2.5 metres, and some analysis we’ve done of the region and the economic exclusive zones of the nations says that sea state 4 is a reasonable state for operation for vessels in this area. It enables vessels to be able to escape adverse weather conditions if necessary, and obtain the necessary sea room. With regards to the mandating the steel construction of these hulls. These vessels operate in the island nations; there is limited infrastructure in many of these island nations, and therefore for these vessels it’s important that we have a steel hull that gives us robustness for these vessels, and gives them robustness operating with limited infrastructure and other bits and pieces. More broadly, in terms of Defence capability, we haven’t made a determination whether we’re going to mandate steel or other materials for vessels, so it’s really just in the context of the Pacific Patrol Boat program. The current Pacific Patrol Boats are made out of steel that gives us robustness in their operation. We’ve mandated that for the replacement Pacific Patrol Boats.

QUESTION: 

Is this- in industry term, does this have any bearing on the replacement of the Armidale class?

REAR ADMIRAL MARK PURCELL:  

What this gives Australian industry an opportunity to do is to move into a design, a build, and a sustainment phase for Australian ship building. As has been indicated, these are mandated to be built in Australia, so there are significant opportunities for Australian industry with this program. And I would envisage, and we would certainly envisage, that this would be able to give industry a leverage into future programs that may be announced.

KEVIN ANDREWS:          

And we expect the first vessel to … first vessel to be produced in about 2018, and then rolled out. And the timetable will depend on the interest from the particular Pacific nations and of course the tender, what the tender process is as well in terms of what’s forwarded in terms of the winning tender.

QUESTION: 

Defence- the naval ship building industry has been very concerned about the valley of death, and gaps after the- when the current building program’s finished; are these boats- is this a significant enough project to bridge that gap to some extent?

KEVIN ANDREWS:          

Well, can I say first of all that the valley of death is Labor’s valley of death, and that’s something which we are trying to address. This is an important component in terms of us saying we want a ship building industry in Australia, and we want a Defence industry so far as Australia is concerned. This is a component of the future but what’s important is that we plan for decisions, because these are decisions that take time to get to the point of actually building something, let alone the whole project of building. So, yes, we are concerned to have a naval ship building industry in Australia. This will be an important component.

QUESTION: 

Yeah, but this will help bridge that gap, or provide….

KEVIN ANDREWS:          

Well that will depend on the outcome of the tender process, and we can’t prejudge that.

QUESTION: 

We don’t know yet, presumably, where they might be built?

KEVIN ANDREWS:          

We’ll wait and see who expresses interest.

QUESTION: 

Minister, can I just ask on another issue …

KEVIN ANDREWS:          

Before we move any other questions on the patrol boats? No? Yes?

QUESTION: 

Just ask on another issue. The ADF does lot of joint exercises with the Indonesian military, we donate a lot of equipment to the Indonesian military; have we made any suggestions to Indonesian leaders that we could take some of these joint training exercises or equipment off the table if the executions go ahead? Is- could we pursue those issues if the executions go ahead?

KEVIN ANDREWS:          

Look, the entire focus of our attention, from the Prime Minister to the Foreign Minister, right through the Government at the moment, is to seek to convince the Indonesian Government and the President in particular, not to go ahead with these executions. That’s our entire focus. Now, depending on the outcome of those representations there may well be other decisions which the Government will take, but it’s premature to be considering what they are at the moment.

QUESTION: 

What did you make of the military show of force involved with the transfer yesterday?

KEVIN ANDREWS:          

Look, that’s a matter for the Indonesian Government and the Indonesian defence. I’m not going to comment on that. As I say, our focus has to be entirely, as a Government, and indeed reflecting, I think, the view of the majority of people in Australia, that we believe that these two people’s lives should be spared, that they have shown remorse, they have rehabilitated. And our belief is that in those circumstances a different outcome should be in place. Yes, they should be punished, but we don’t believe that executing them is the appropriate thing to do.

QUESTION: 

But it is true that the ADF has invested a lot of time and money in building relationships with the Indonesian military, and that would be one of the key ways you would be seeking to exert…

KEVIN ANDREWS:          

I’m not going to prejudge what we may do or may not do in the future. We have a significant strategic relationship with Indonesia. Indonesia is a next-door neighbour, has been, is, and will be in the future, and so that is obviously part of our ongoing consideration. But having said that, we are urging Indonesia in every possible way, as you know over weeks now, to spare the lives of the two.

QUESTION: 

Minister, part of the case yesterday on the ADF pay deal the Prime Minister cited was that the APS in recent years has had a 25.9 per cent pay increase, whereas the uniformed ADF had only had a 20.8 per cent. Now, it now emerges that the APS figure of 25.9 per cent is median pay movement, which includes things like- all statistical movement in pay, including incremental rises such as when someone’s promoted or moves up a pay grade. So inevitably that is going to be higher than simply aggregating the pay increases under the WRA, as was done for the ADF. How is that not a misleading use of those figures?

KEVIN ANDREWS:          

Well, what we were advised is that the APS data that you referred to was the most comparable data, and that advice was provided by the Australian Public Service Commission. So, we’re relying upon that advice.

QUESTION: 

It wasn’t entirely comparable though, because they’re two- they’re actually apples and oranges. So won’t you need to…

KEVIN ANDREWS:          

Well, my answer is the same that is that the advice was that that was the comparable data.

QUESTION: 

Do you have room to move on superannuation? The military community is very against the idea of a two-tiered system and have other concern

KEVIN ANDREWS:          

Look, we are continuing to discuss that. This week I was dealing with the building partner capacity deployment, and I have been dealing with the pay issue that we’ve just been speaking about. Superannuation is on my long list of things that I’ll be looking at in coming weeks.

Thank you.