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Former CEO of Future Submarine designer DCNS Australia, now known as Naval Group Australia, Sean Costello has set the record straight on the now infamous and highly-quoted 90 per cent Australian industry participation figure.
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In 2016, when uncertainty remained over whether the 12 Future Submarines would be built in South Australia, overseas or split between two locations, Costello offered assurance to Australians after DCNS was selected as the preferred international partner for design of the submarines, telling media “over 90 per cent” of the $50 billion submarine build would take place in Australia.
The 90 per cent figure has since been the subject of much debate within industry and government circles, with Costello’s successor, interim CEO Brent Clark, fuelling the fanfare in June last year at Senate estimates when he was asked whether the 90 per cent target was correct.
“I don’t want to give this committee a figure,” Clark said, adding that he had an “aim point of greater than 60 per cent”.
Exactly what the 90 per cent figure related to, whether it was contribution of Australian industry to the overall project or simply the build, has remained in doubt ever since.
Costello, who is now director of SEA 5000 contender Fincantieri Australia, has gone on the record with Defence Connect to clarify just what this 90 per cent figure related to.
“I remember well making that statement. It’s as true today as when I said it, and to be clear, what I said was that the planning of the Future Submarine project is that 90 per cent of the build activities will be performed in Australia,” Costello told Defence Connect.
“To make it very clear, we [Naval Group] went forward with a message that the submarines would be built here in Australia. The actual planning is over 90 per cent, for the record, of build activities.”
The Fincantieri Australia director also confirmed the 90 per cent build figure “absolutely” went into the bid presented to the Australian government, “down to the percentile”.
“There’s a difference between 90 per cent of build activities and the total contract value, and there has been confusion since between those two things,” Costello said.
“I’m not on that program anymore, it’s up to others to explain what the relationship [is] between what’s the total contract value and what’s the percentage of the build activity.”
The Future Submarine project has been in the spotlight in recent months, after Naval Group’s Jean-Michel Billig said the $50 billion future submarines may end up with conventional propellers, rather than pump jet propulsion, a comment that has since been shot down by the government and Department of Defence officials.
The first of the 12 Future Submarines is slated to begin construction in 2023. The first of the vessels are likely to begin entering service in the early 2030s. Construction of the 12 new submarines will extend into the late 2040s to 2050 time frame.
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