Letter to the Editor of the Canberra Times from Defence Minister Stephen Smith
Sunday 1 April 2012.
Defence reporter David Ellery can usually be relied upon to check the facts and substance of his articles, including seeking comment on anonymous allegations and conspiracy theories.
On Friday 30 March he did none of the above ahead of his erroneous article 'Smith under attack from ship critics, 31/3' on the Government's purchase of the Offshore Support Vessel Skandi Bergen.
Following the failure of Navy's heavy amphibious lift capability in February 2010, the Government moved to restore this important capability through the purchase of HMAS Choules, a maintenance programme for HMAS Tobruk, a comprehensive review and change to amphibious maintenance programs through the Rizzo Review and now the purchase of the Skandi Bergen.
The purchase of Skandi Bergen was effected on the advice of Defence, Navy and the Defence Materiel Organisation.
The fact that in due course it can be utilised by Customs is both a capability advantage and an effective and efficient use of taxpayer funding.
Stephen Smith MP
Minister for Defence
Letter to the Editor of the Canberra Times from the Chief of Navy VADM Griggs
Sunday 1 April 2012.
I refer to the article in Saturday’s Canberra Times “Ship Under Attack from Defence Critics - Defence Purchase a Stunt”. This was a disappointing article in that it contains a number of errors of fact and gives your readers a highly inaccurate view of the value that the offshore Support vessel Skandi Bergen provides to Navy.
To say that the ship is of no use to Navy is incorrect. Navy has been using chartered vessels to supplement its amphibious capability since May of 2011 and in the process has been able to provide greater assurance to Government that it can cover a range of Humanitarian Assistance and Disaster Relief (HADR) contingencies during the amphibious capability transition to the new Landing Helicopter Dock ships. The focus of these chartered vessels, and now of the Skandi Bergen, has principally been on providing HADR options if required. With a fleet of only two major amphibious ships, having one ship online can not always be guaranteed, particularly when one of those ships (HMAS TOBRUK) is in the latter part of its life and its availability can be considered fragile. Skandi Bergen significantly enhances Navy’s flexibility to manage the limited number of assets during the transition period between now and 2016.
The claim that the ship was bought because Customs needs it is also incorrect. The initial decision to purchase an interim HADR vessel was made solely on the basis of Defence requirements. The scope of the purchase was subsequently, and very sensibly, expanded to capitalise on the broader Whole of Government need over the longer term.
To claim that the ship has no amphibious capability is simply wrong. The amphibious capability is a system about the collective ability of the ADF to land, support and sustain ground forces from the sea. The amphibious spectrum of operations covers everything from HADR and non combatant evacuation through to higher end warfighting roles. A roll on roll off capability is, despite what the article contends, not what defines a ship as being 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.
R.J. GRIGGS, AM, CSC, RAN
Chief of Navy
Canberra Times Article
Smith under attack from ship critics
David Ellery, Canberra Times
March 31, 2012
Defence Minister Stephen Smith's decision to order his department to spend $130 million on a ship for the Border Protection and Customs Service is unprecedented, a former senior bureaucrat says.
Critics within Mr Smith's department say the ship, the Skandi Bergen, is of no use to the navy and that the purchase is a public relations stunt.
It is due to undergo sea trials in May and will arrive in Australia around the middle of the year.
Advertisement: Story continues below ''Navy did not buy this ship to fill any void until the Land Helicopter Docks come on-line,'' a source said. ''The government bought this ship because Customs needs it - but Customs does not have any money. The defence minister directed Defence to buy it with Defence money.''
Attempts by the minister to pass the Skandi Bergen off as an amphibious vessel were just plain wrong.
''It is not, I repeat, not, an amphibious ship,'' the source said. ''It has no amphibious capability whatsoever.''
Professor Ross Babbage, the former head of strategic analysis in the Office of National Assessments, said Mr Smith's intervention was remarkable.
''It strikes me as truly without precedent,'' he said yesterday. ''I cannot recall a previous occasion where the minister has ordered his department to buy a major piece of Defence equipment which the department itself hasn't previously identified as a requirement for defence capability.''
The intervention represented ''a serious breakdown in the discipline of force structure development''.
Unlike last year's purchase of HMAS Choules - which at only $100 million represents a lot more bang for the buck than the much smaller Skandi Bergen - funds do not come from a budgetary underspend. ''The decision was not related to any budget underspend. Defence is not currently anticipating an underspend in 2011-12,'' a Defence spokesman said.
The decision to buy the Skandi Bergen, a sister ship to the Border Protection and Customs Service's Ocean Protector, was driven by Mr Smith's fear HMAS Tobruk and HMAS Choules would not be sufficient to respond to a natural disaster such as a cyclone or tsunami in the region.
''Navy [now] only has two amphibious ships and the minister wanted a third ship for humanitarian assistance and disaster response,'' the source said. ''This reeks of the government trying to give the impression it is doing something about defence - it is an attempt to mislead the electorate. It is worse than doing nothing as it is a diversion of focus and resources,'' another Defence insider said.
The Skandi Bergen purchase followed the announcement, on December 13, by Mr Smith and Minister for Defence Materiel Jason Clare of ''the next step in the government's plan to improve the Royal Australian Navy's amphibious capacity - the purchase of a ship to add to the Royal Australian Navy's current amphibious ships, HMAS Choules and HMAS Tobruk''.
To qualify as an amphibious vessel a ship needs to have a ''roll on, roll off capability''. The Skandi Bergen does not meet this requirement.
Answers provided to questions from David Ellery, the Canberra Times, on 29 March 2012
1. I have been told the Skandi Bergen, the sixth Globemaster and the Bushmaster deal have all been signed off on because, as was the case last year, Defence has been unable to spend all of its 2011/2012 budget. Your confirmation the Skandi Bergen purchase is funded from that budget appears to support this claim. Is it correct?
The acquisition of all three additional capabilities was foreshadowed by Government last year.
They are priority capabilities that have been funded from within the existing Defence budget.
At the time of the 2011-12 Budget it was determined that there would be a $1.6 billion underspend for the 2010-11 financial year, and $1.3 billion of capital funding to be reprogrammed.
Accordingly, the Minister asked the Secretary and the Chief Financial Officer to conduct a comprehensive stocktake of the Defence budgeting system, taking into account all budget processes, estimation methods and underlying budget assumptions. This includes the way in which Defence’s Capital equipment budgets are formulated and managed and includes ways in which underspends might be reduced.
The decision to acquire these additional capabilities was based on the utility that each brings to a critical area of ADF operations. The decision to acquire these capabilities was not related to any budget ‘underspend’.
Additional Amphibious Ship
When Cyclone Yasi hit North Queensland in February early last year, Defence did not have any amphibious ships available to assist.
At that time Minister Smith and Minister Clare made no secret of their disappointment with the state of the Royal Australian Navy’s amphibious ships.
Since that time the Government has taken a number of steps to rectify the problem with the Navy’s amphibious fleet.
First, in April last year the Government purchased the RFA Largs Bay from the British Government. In December it was officially commissioned into the Royal Australian Navy as the HMAS Choules.
Second, work was conducted on HMAS Tobruk to return it to sea.
Third, in order to maintain the Navy’s amphibious capability, ships were leased to supplement the existing capability. Subsea Operations Vessel Windermere was leased to provide extra support during the cyclone season.
Fourth, to ensure such a gap in capability does not happen again, the Government also commissioned Mr Paul Rizzo to develop a plan to improve the maintenance and sustainment of our naval fleet. The recommendations from the Rizzo report are now being implemented.
Fifth, in December last year Minister Smith and Minister Clare announced that they would pursue the purchase of an additional ship under a civilian crewing arrangement to be used by Navy for humanitarian and disaster relief situations.
In September last year the Minister announced that Australia was investigating the purchase of a sixth C-17A Globemaster III heavy-lift aircraft.
The purchase of the sixth C-17A will double the number of C-17A aircraft available for operations at any one time from two to four.
The C-17A aircraft can lift very large and heavy cargoes over long distances providing a significant contribution to Australia’s ability to reach and respond to events.
One C-17A can carry up to four C-130 Hercules loads in a single lift and cover twice the distance in three-quarters of the time of a C-130.
The additional C-17A will greatly increase Australia’s capacity to respond to natural disasters and provide humanitarian aid.
This has been made even more apparent through the Australian Defence Force response to the 2011 Victorian Floods, Cyclone Yasi and the Queensland floods, as well as the earthquake in Christchurch and the tsunami in Japan.
Bushmasters have saved Australian lives in Afghanistan. The vehicles have proven to be very effective, providing Australian troops with mobility and protection, particularly against Improvised Explosive Devices (IEDs).
In May 2011 the Government approved the purchase of an additional 101 Bushmaster protected mobility vehicles to support ADF operations in Afghanistan.
Thales Australia is currently manufacturing Bushmaster Protected Mobility Vehicles at its factory in Bendigo. This manufacturing capability, and the skills of the workforce, is an important national security capability.
In December 2011, the Government announced that in order to retain critical skills in Bendigo the Government would explore the purchase of additional Bushmaster vehicles.
The announcement to spend more than $15.5 million to manufacture components of the next tranche of Bushmaster vehicles is the next step in that process.
2. How much would Defence have underspent its 2011/2012 budget if these assets had not been ordered?
3. How much will the Defence budget underspend be taking these acquisitions into account?
Response to Q1 and Q2:
Defence is not currently anticipating an underspend in 2011-12.
4. What capability have they replaced? I.e. - what was meant to be delivered but is not coming?
The Skandi Bergen does not replace an existing capability but alongside Choules provides an interim capability to respond to Humanitarian Assistance and Disaster Relief contingencies after the early withdrawal of the Amphibious Transports (LPA) HMAS Ships Kanimbla and Manoora.
5. The Minister's statement suggests the next Skandi Bergen has been acquired principally as a short term disaster response option ahead of the arrival of the LHDs. Is this a fair statement?
Yes, the Skandi Bergen has been procured to assure fulfilment of the requirement for an interim maritime humanitarian assistance and disaster relief capability for Defence until the arrival of the second LHD in the middle of the decade. The capability requirement was then increased to allow Defence to procure a vessel that met the additional requirements of the Australian Customs and Border Protection Service for a Southern Ocean Maritime Patrol and response capability, thereby ensuring a better Whole of Government outcome.
6. What, apart from this standby capacity, is she going to be used for? Is there a projected schedule of operations for the vessel at this stage?
The vessel has been procured primarily to provide an additional Humanitarian Assistance and Disaster Relief capability until the arrival of the second LHD in the middle of the decade at which time the vessel will transfer to the Customers and Border Protection Service.
In addition to exercises and training required to ensure that she is ready to conduct her primary mission, the vessel will also be used for general naval training and amphibious sea lift support.
7. Is the Skandi Bergen fully rated to operate in Antarctic waters and the icing conditions experienced in the deep Southern Ocean?
Skandi Bergen has a DNV classification of ICE-1B with DEICE, meaning that as a commercial vessel she is able to move through new year ice flows up to 0.6m thick. The DEICE capability is a crew safety feature that prevents ladders, decks and emergency doors and hatches from icing up. It is ideal for the Southern Ocean Maritime Patrol and Response capability. These classifications have met the requirements set by the Australian Customs and Border Protection Command service.
8. Where will the new vessel be based?
Subject to the Force Posture Review, the vessel will be based in Sydney at Garden Island. The new vessel can also be based out of a number of other ports, including HMAS Stirling.
9. How will the civilian crew be recruited?
Defence will release a tender for ship management services including ongoing sustainment and crewing. The contracted ship management company will recruit the crew. It is expected that they will use Australian seafarers already in their employ.
10. What is the crew complement?
The vessel will have a crew complement of approximately 20. For humanitarian and disaster relief missions, the Skandi Bergen’s civilian crew of around 20 will be supplemented by specialist ADF personnel, with the exact ADF crew mix to be determined on the basis of the specific task.
11. What is the projected annual operational cost of the Skandi Bergen while she is in navy custody? Can you break this down into consumables, maintenance and wages and salaries?
The Commonwealth will shortly be releasing a Request for Tender for the long term ship management, crewing and sustainment of the vessel. Details of the expenses involved in this contract will be released on the Austender website once the contract has been agreed.
12. Will she be formally commissioned into the navy?
The vessel will not be commissioned into the Navy. Skandi Bergen will be regulated by the Australian Maritime Safety Authority (AMSA) with a civilian crew.
13. Is Navy going to give her a name?
The ship will be renamed by Defence, in consultation with Customs and Border Protection. The name is yet to be decided upon.
14. What is the current status of Tobruk? Will she reach the end of her scheduled operational life - and is that, as has been reported, 2014?
15. If not 2014 when is the Tobruk due to be retired?
Response to Q14 and Q 15:
Tobruk is conducting a scheduled maintenance activity at Fleet Base East, Sydney and is expected to return to an operational status in May 2012. The Planned Withdrawal Date from operational service remains 2014.
16. How much money was spent on the rectification work required to return the Tobruk to 48-hour readiness last year? I have heard it is in excess of $25 million? Can I have an exact figure?
During 2011 Tobruk underwent both planned and emergent maintenance (including dry docking).The cost of the repairs during this period totalled $20.60M.
17. And, on another matter, I understand there are issues with HMAS Success following the double-hulling in Singapore. Can Defence confirm Success returned to Australia with propulsion issues arising from the propulsion have been moved out of alignment during the double hulling?
18. Is work currently underway to rectify that problem?
20. Is Success currently ready and able to put to sea?
21. If the answer is yes is that at 48-hours notice or less?
Response to Qs 17 to 21:
For over 10 years HMAS Success has had problems with her propulsion system alignment. Several attempts have been made to rectify this problem, but have only allowed management of the problem rather than correction. Commencing prior to the IMO Conversion in Singapore this system was subject to more intensive monitoring to facilitate a long term rectification to this problem. As a result, the ship is currently having this defect rectified at Fleet Base in Sydney.
19. How much is such rectification work expected to cost?
The estimated cost for the propulsion system alignment corrections is $4.10M
Please also see the following three media releases: