19 September 2022

Top Defence officials 'kept in dark' about Morrison's plan to scrap French subs

| Chris Johnson
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Scott Morrison

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.”

READ ALSO Decision to torpedo French deal leaves Australia with a submarine gap

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.

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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Tom Worthington3:21 pm 19 Sep 22

Fortunately the AUKUS agreement is not a binding document, unlike the cancelled French contract. So there should be no financial penalty when the Australian government abandons the nuclear option in about 18 months time. Hopefully, work will then be accelerated upgrading the existing submarines, buying off the shelf replacements manufactured in the region (Japan or South Korea), setting up local manufacturing for the drone sub program initiated by the former government, and building Australian ships to replenish the submarines. https://blog.tomw.net.au/search/label/submarine

Why does almost nobody mention that the French submarine we were buying is a nuclear submarine but was to be recreated for us with conventional power? We could have said “Nuh, we’ll have the other engine after all”. It is also smaller than the UK/US submarines so better suited to littoral operations. It’s principal disadvantage was a need for refuelling every ten years although the reason might also be considered an advantage, that it does not require weapons-grade uranium.

Just wondering; not a major interest.

Phydeaux,
I’ve seen it mentioned a lot but it does get ignored in more casual reporting of the issue.

I think the lack of reporting on the breadth of AUKUS is also misleading, it’s about far more than some submarines.

Articles like this also seem strange in that it’s clearly reporting on one clearly biased side of the events, when there are clear and obvious responses as to why certain things mentioned in the article happened.

Sure the French and their companies may not have liked what occurred but it was clearly on the cards for a while.

There’s plenty of mismanagement on the plans for the submarines going back many, many years.

Capital Retro8:23 pm 19 Sep 22

Can we get more “wondering” from you, phydeaux? At least you don’t use those big, sometimes baffling words.

Nothing surprises me about that man

Didn’t labor pay the 830million, In fact they were eager to pay it as it would be used as a political tool (an expensive way to make a point).
Seems as if the contract was delayed/failed we shouldn’t really have paid for something we didn’t get or wouldn’t have gotten.

The fact we had a replacement deal with the US, seems some were unhappy this decision was made above their pay grade.

Also you fail to mention what the cost blowout of sticking with the French subs was. Perhaps this amount was small in comparison.

Labor like to spin bad deals that they started against their opponents:
One merely has to look at the history of the NBN saga and labor kicking that off to a failing start and then failing to give accurate picture of how it was going. What started as a 4.3 billion network upgrade turned into a 50billion expenditure. Labor said it would pay for itself due to the now failed CVC pricing model.
However Libs got the shaft of that stick for cutting costs, however very few people are using huge amounts of data or high-speed tiers.
Competition has been decimated in the broadband world and so has innovation. We now have taxes imposed by NBN Co to remove competition. Anyone getting a broadband service outside NBN Co is paying a broadband tax to pay for Labors failed NBN.

Boo Hoo – Someone is still clearly annoyed that Scomo lost the election.

Just annoyed at paying for labor to tick boxes and appeal those with short term memory.

If we know exactly that drives defense, we likely don’t have a very good ‘intelligence’ service.

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