COVID-19 Could Delay $45 Billion Frigate Program of Australia

A CGI impression of Type 26 Frigate. Courtesy BAE Systems.

British company BAE Systems, which was selected in June 2018 to build nine frigates in Adelaide, has advised the government the COVID-19 pandemic has resulted in a shortage of engineers resulting delays on the delivery of the $45 billion frigate program reported Sydney Morning Herald.

The Department of Defense has been told this could result in delays to the design phase for the ships, which are slated to start replacing the ageing Anzac-class warships from the late 2020s.

Defense Minister Linda Reynolds told a Senate estimates hearing on Monday the government had received a range of advice and was working with BAE Systems subsidiary ASC Shipbuilding “to refine the schedule and cost projections”.

The Naval Shipbuilding Advisory Board, a high-level body of shipbuilding and infrastructure experts chaired by former US Navy secretary Don Winter, warned there were risks if construction began before the design work was completed.

Appearing before the Senate estimates hearing, Professor Winter confirmed BAE Systems had “discussed some of the pressures … as a result of the COVID-19 pandemic”.

“They were in the process of providing a set of options to Defence as to how to best manage those pressures. As best as I understand it, that work is still in progress and no decision has been made,” Professor Winter said.

Asked about the risk of continuing with the current construction schedule, Professor Winter said “the risk has to do with the question of the extent to which the design has been completed”.

BAE Systems has won a $35 billion contest to deliver anti-submarine warfare frigates for the Australian navy, beating competition from Italy and Spain.

Professor Winter said there had been some impacts on the design work related to the pandemic and to “other issues that have accrued that are not unusual to have accrued in a project of this nature”.

“No program of this type is without issues,” he said. “There are certain aspects of the design that are showing the impact of limited personnel that is tied to the COVID-19.”

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Professor Winter confirmed he had raised concerns about the schedule of the frigates program as early as 2017 with former Defense secretary Dennis Richardson.

The evidence comes after this masthead revealed earlier this month that the cost of the frigate program was $9.3 billion higher than had been publicly disclosed by the government in 2018. Defense officials said at the time the frigates would cost $35 billion, but the cost has now been upgraded to $45.6 billion

The initial design allowed for the frigate to have a weight of 8800 tonnes when fully loaded and length of 149.9 metres. But the ships now may need to be longer and heavier to incorporate necessary capabilities such as the radar system.

Defence officials also conceded a $30 billion increase in the future submarines program was kept from the public for more than two years, saying there was no conscious decision to keep it secret.

Labor’s Senate leader, Penny Wong, who led the questioning of Professor Winter and Senator Reynolds, said she did not believe the government could meet the 2022 target to begin construction on the first frigate.

In a statement, BAE Systems said frigate program “remains on target to achieve its contracted milestones of commencing prototyping in December 2020 and construction on the first frigate in December 2022”.

“Like any business, we have considered potential impacts from COVID-19 to the program, however at this point we are not requesting any delay to start of the Hunter program as a result of COVID-19,” the company said.

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