Interview with Tom Connell, Sky News

TOM CONNELL:

The Government, according to reports in The Australian today, faces another problem with defence acquisitions, this time relating to new frigates. It's a $45 billion fleet. The Australian reporting they'll be slower than originally planned and could be vulnerable to detection by enemy vessels. To discuss this, I'm joined by the Defence Minister Peter Dutton. Thanks for your time today.

PETER DUTTON:

Thanks Tom.

TOM CONNELL:

What can you tell us about this report? Is it accurate?

PETER DUTTON:

Well, it's only accurate in part. I mean unfortunately the most important part has been left out, and that is that, yes, concerns are raised, but they are being addressed. When you look at the complexity of these programs, I mean trying to build frigates or submarines or putting together a helicopter fleet, the weapon systems, the millions of componentry parts and decision-making points; I mean it's quite phenomenal. So I think the first point is that there is an element of risk in all of these projects, otherwise, if you're not prepared to take that, don't build them. So yes, things will go wrong, but I think what really was a low-level report has been exaggerated and the fact is that the concerns that have been raised are being addressed, and the Chief of Navy has been very clear about that.

TOM CONNELL:

So all the concerns in here? Because some of them seem pretty dramatic; substantially slower vessels, shorter range as well. They were all legitimate concerns, but you're saying they're all being addressed.

PETER DUTTON:

Correct. And there'll be more concerns over the run up to a project like this, different pieces of technology that can be made redundant, there can be new technologies that they can embrace, new componentry, new engineering standards or techniques that they're able to incorporate into the build. So these issues come up, but again, I think we've seen half of the story today, but the other half is that issues are being remediated, they're being addressed and this is, I suppose, the reality of a shipbuilding program.

I mean Labor never had these problems because they never commissioned a ship, they never built a frigate and we've got a fairly extensive program underway.

TOM CONNELL:

So when you say they're being addressed, does that mean they get addressed by a cost blowout?

PETER DUTTON:

There will be a cost involved. I don't think there will be a cost blowout because there is an envelope there of money that's been provisioned, that's been put in place…

TOM CONNELL:

…so there's a $45 million price tag. You're saying within that it was always built in there would be changes and so on. You don't think there'll be any cost blow out to the current price?

PETER DUTTON:

No I think, again, Tom, there are two things here. One is that there is a contingency, big contingencies built into these contracts. So Defence provision for cost overruns, for additional equipment that they want to install for new technologies, as I say.

The second is this is a decision that was made in June of 2018. I took a decision late last year, the National Security Committee did, that we would push back the start of this ship by about 18 months and the reason that we did that was because of the lack of maturity around the design. We could have launched into an early build, which I think would have caused us dramas down the end, at the back end of the project, but the other important point to make here is the advice to me has been that by delaying and getting things right to start with, we think there will be a time saving during the course of the build. So you catch up some of that time that you've delayed at the start because I think you've been more prudent at the beginning of the project.

So when you put all of that together, it gives us a great capability and we need it. We know the Indo-Pacific is going through a very uncertain period and that will be the reality, really, for the next decade and beyond and we need the capability to provide support to our country.

TOM CONNELL: 

So as it stands, no additional cost. What about the weight standards that have been raised as an issue? Is it going to meet the weight standard?

PETER DUTTON:

Well again I mean it's an issue that's been raised, and the head of CASG and the Secretary of my Department give me an assurance that they can mitigate that risk, that they can deal with that issue, but the engineers will go through and try and pick out every possible problem. This is one of them. And the engineering solution that they've crafted for it means the problem has been identified, it's been addressed, and we move on.

TOM CONNELL:

And in terms of any potential change of tack, we know there was a significant issue with the subs and in the end we sought a new supplier. Is there a plan B being worked on?

PETER DUTTON:

No, we've looked at the plan B and we went through this project in great detail late last year. Obviously I've been very conscious of looking at all these programs. We cancelled the subs contract as you know. We've gone to a different helicopter platform because the MRH90 was not performing to the standard that was assured to us, and we looked very carefully at this project and we've decided that we will proceed with it. The relationship with the United Kingdom is incredibly important. BAE is a very important partner with us…

TOM CONNELL:

…is that part of the reason for staying because…

PETER DUTTON:

…yes…

TOM CONNELL:

…ending relationship – I shouldn’t say that…

PETER DUTTON:

No.

TOM CONNELL:

…but souring relations with the UK, I mean after it's already happened with France just would be so unpalatable.

PETER DUTTON:

I think there are a number of considerations. That is one of them, as it was with the French. I mean we didn't want to cause a difficulty to the relationship. We knew that it would because of the size of the contract and the cancelling of it, but there were good reasons for that and it wasn't just the diesel-powered technology. It was that there was a much greater capability in the submarine.

TOM CONNELL:

You've got to get to the Prime Minister speech.

PETER DUTTON:

I do.

TOM CONNELL:

Thanks for your time.

PETER DUTTON:

Thanks Tom.

[ends]