Scott Morrison kept senior Defence personnel in the dark over his decision to scrap the French subs contract, an insider’s appraisal says. Photo: File.
Scott Morrison cancelled the French submarines contract on a false premise and without even letting the contract manager in the Department of Defence know he was preparing to do it, according to an insider’s secret appraisal.
A confidential document leaked to the ABC on the one-year anniversary of the contract’s cancellation reveals the former prime minister used spurious grounds to end the deal with French submarine builder Naval Group and that almost no one inside Defence was aware it was being scrapped in favour of the AUKUS agreement.
The document was written by former Defence deputy secretary Kim Gillis, who was part of the government’s negotiations team and who subsequently (after retirement) joined the board of Naval Group Australia.
It appears to be a summary of events from his perspective prepared for Naval Group staff and others involved in the dumped project.
In its 10 pages, the report claims the excuses the former government gave of cost and schedule blowouts were overstated and based on a series of misunderstandings.
“There has been much media commentary about the program, particularly in relation to cost and schedule blowouts, and this has only grown since the AUKUS announcement was made,” Mr Gillis wrote.
“I want to say that this reporting is quite wrong and devalues the achievements and tremendous work by our teams in Australia and France and, not to be forgotten, Defence’s own project team.”
In cancelling the contract a year ago, Mr Morrison suggested targets were not being met.
“I made very clear what the timeline was, and why I believed that we had made very clear that there were very significant issues about us moving forward with this contract,” he told the media.
“Australia made the decision not to go ahead with a contract for a submarine that was not going to do the job that Australia needed to do and I’ll never make any apologies for that decision.”
That decision sparked a diplomatic row between Australia and France that is only now beginning to heal with the election of Anthony Albanese’s Labor government.
Mr Gillis’s document states that Naval Group was forced to agree to provide stipulated Australian material and components in the submarines – 60 per cent local content – but was not allowed to assess whether these parts could even be manufactured here.
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Perhaps most damning is the revelation that Defence’s own team dealing with the contract was kept completely unaware that preparations were underway to dump it – at a subsequent cost of $830 million to the Australian taxpayer.
“It seems clear that the contractual team that was working with us on a day-to-day basis was kept in as much dark as the Naval Group Australia and French boards were,” he writes.
“In any contract, you will hear noises, rumours and sometimes misinformation. The only thing that you should be able to rely on is what the Commonwealth contract manager actually says or more importantly puts in writing.
“I believe it is totally unacceptable when the Commonwealth contract manager is excluded from discussions regarding the termination of the contract for what now appears to be six or more months.
“The problem was that there was an alternate strategy being developed behind closed doors and outside the accepted contractual processes.”
Region has contacted a number of Defence sources involved in the scrapped project. They appeared to support this version of events.
“We’re glad this document is out there because it does counter some of the lies that were being pushed around about the contract,” one said.
“Morrison just went off on his own and very few people knew about it at the time.”
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