SENATE INQUIRY INTO NAVAL SHIPBUILDING LAST NIGHT REVEALS: SUBS DOUBLE WHAMMY

21 June 2017
  • DCNS backs away from 90% local build promise
  • 1400 SA-based ASC jobs slated to go to WA

Senator Nick Xenophon says "damning evidence" at a Senate inquiry last night revealed that French company DCNS has backed away from its previous 90 per cent local content commitment for Australia's Future Submarines, and that 1400 SA jobs are slated to be shipped to WA after the commencement of a Future Submarine build in 2023-24.

"This damning evidence is a double whammy - it will cost Australia and SA in particular billions of dollars and over 1400 jobs," said Nick. In a blow to SA and Australian Industry, DCNS reduced its commitment to a rubbery 60 per cent of local ‘build and assembly’ and made no commitment as to the use of local components in the Future Submarine Program.

"Sixty per cent falls well short of the 70 per cent achieved during the build of Collins and the 90 per cent promised for the Future Submarine Program by Minister Pyne on Q&A last year and by DCNS before a parliamentary committee in March this year," said Nick. 

"Let's hope it doesn't turn into an Ikea project, where all we do is bolt together a bunch of components that have been shipped to Australia from overseas."

In response to questioning by Senators Nick Xenophon and Kim Carr, DCNS also told the Senate Economics References Committee that ASC will have no part to play in the Future Submarine Program and ASC’s workforce would be "absorbed" by DCNS when the submarine build commences in 2023-24.

Senator Xenophon called on the Federal Government to reveal its plans for deep level maintenance at ASC. “It’s now apparent that deep level Collins maintenance will be shifted to ASC’s facility in WA when the build commences”, said Nick. 

The recently released Naval Shipbuilding Plan confirmed that Defence are considering all options in relation to Collins sustainment
and the CEO of ASC, Mr Stuart Whiley, revealed at Senate Estimates last month that their current 15 year sustainment contract is only being renegotiated for another five years.

"That five year contract will end at about the same time as the Future Submarine build”, said Nick. 

“At that time, submarine full cycle dockings, an activity that employs 1400 South Australians and generates at least $150 million of local annual economic activity, will be shifted to WA where ASC currently conducts intermediate and mid-cycle dockings. 

"Instead of a jobs bonanza, the Future Submarine Program may actually result in these jobs being lost for South Australia. The Federal Government has to be completely open with its long-term plan."

Senator Xenophon's call for transparency comes after evidence that, despite DCNS knowing for well over a year that ASC would have no part to play in the Future Submarine Program, the Senate, ASC and its workforce have been left in the dark. 

You can watch last night's Senate Economics Committee hearing here.

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