Aussie-French submarine deal comes under fire

Turnbull criticised for hurting ties with Japan, 'political' decision to build vessels locally

Australian Prime Minister Malcolm Turnbull (second from left) looking at a Royal Australian Navy submarine in Adelaide on April 26.
Australian Prime Minister Malcolm Turnbull (second from left) looking at a Royal Australian Navy submarine in Adelaide on April 26.PHOTO: AFP

Australia's decision to award a A$50 billion (S$52.3 billion) deal to France to build 12 new submarines was greeted as a "historic" victory in Paris on Tuesday, but the deal has raised questions back home about its handling.

The decision to award the contract to France's naval contractor DCNS Group largely won approval from analysts, who said the 4,500-ton long-range submarines will be well-suited to Australia's defence needs.

But Canberra has come under criticism on two fronts: the impact of the announcement on ties with Japan and the decision to build the submarines in Australia.

Japan openly criticised the deal after reportedly receiving an informal assurance by Australia's former prime minister Tony Abbott that it would win the contract.

Mr Abbott, ousted by current leader Malcolm Turnbull last September, favoured the "strategic" benefits of granting Japan the contract - a move that would have tightened military ties between the partners in the face of China's growing assertiveness in the region.

In an unusual move, Mr Abbott, now a backbench MP, wrote a personal letter to Japanese Prime Minister Shinzo Abe to thank him for trying to deepen relations with Australia. However, most commentators believe that Canberra and Tokyo will swiftly mend any damage.

The two nations, both close allies of the United States, are seen as having too much to lose, especially as they seek to adjust to China's growing power in the region.

"Japan will be upset it lost out," said political commentator Paul Kelly yesterday in The Australian.

"But the Australia-Japanese strategic partnership will continue to deepen because of great power realities."

But deeper criticisms surrounded the decision to build the submarines in South Australia - a move seen as an attempt to shore up votes in the state ahead of the next election, which is due to be held within months.

Politically, Mr Turnbull's announcement appeared to have its desired effect.

Welcoming the news as a "French kiss of life", South Australia's main newspaper, The Advertiser, triumphantly declared "Oui won it" and the state's Premier, Mr Jay Weatherill, swiftly flew to France last night to discuss the deal, which is set to create 2,800 jobs.

But the contract has raised questions about whether Canberra has been excessively swayed by politics rather than its own defence needs. Building the vessels in Australia, analysts say, will add 30 to 40 per cent to the overall cost of the submarines and is seen as a political fix at a time when the South Australia economy has been flagging.

An expert on maritime and regional security, Dr Euan Graham from the Lowy Institute, said the decision to build the submarines in South Australia meant that it will take about five years longer to ramp up the local production capability and deliver the new submarines to the navy. This will mean it must rely for longer on its ageing Collins class fleet and its overall regional military prowess will be effectively weakened.

"The operative factor in the decision is local and domestic," Dr Graham told The Straits Times.

"They will need to wait five years for the submarines - that is in deference to South Australia and certain senators (who risk losing out in the election)."

Dr Graham said the delay would affect Australia's "strategic" edge in the region, and Canberra could have opted to buy one or two submarines outright from France while preparing to build the remainder in South Australia.

Some supporters of the move to build locally said the decision would boost workforce skills and help Australia to keep its shipyards viable.

But the move has largely been greeted with cynicism, particularly as it comes just two weeks before Mr Turnbull is expected to call an election. "There are much cheaper ways to win votes," political commentator Brian Toohey wrote in The Australian Financial Review.

A version of this article appeared in the print edition of The Straits Times on April 28, 2016, with the headline 'Aussie-French submarine deal comes under fire'. Subscribe