Jan. 31, 2014 at 6:01 AM
CANBERRA, Australia, Jan. 28 (UPI) -- A senior Australian admiral has defended the purchase of next generation submarines that have been labelled a "gold-plated $30 billion sinkhole."

Chief of Navy Vice Adm. Ray Griggs said a comment article in the Sydney Morning Herald newspaper wrongly stated the military has a "culture of delusion and arrogance" when it sets out its requirements.

The article claimed the government's decision in mid-last year not to buy off-the-shelf submarines in favor of constructing them in Australia would cost billions more than the estimated price tag.

The strategy for the SEA 1000 Future Submarine Project, first laid out in the 2009 Defense White Paper, is to buy replacement vessels for Australia's aging Collins Class submarines.

Australia kicked off its largest defense project in mid 2012 when the Expert Panel of the Future Submarine Industry Skills Plan began discussions with defense manufacturers and educational institutions.

The government wants to identify the skills within Australia's ship construction supply chain as a prelude to tendering on the 30-year 12-submarine project.

On the panel apart from government and educational representatives are senior executives from Australia's main shipbuilders ASC, Austal, BAE Systems and Forgacs Engineering as well as chief executives of major naval systems integration companies -- Lockheed Martin, Raytheon, Boeing, Thales, Saab Systems and BAE Systems.

But the Herald article labeled the submarine project an "impending, unaffordable, inexcusable financial black hole" and slated lead contractor ASC as "a basket case" for its poor construction and maintenance performance on the six Collins submarines.

ASC built the vessels between 1996 and 2003 to replace the navy's six Oberon-class boats commissioned between 1967 and 1978.

ASC is a wholly government-owned defense company headquartered at Osborne in Adelaide, South Australia.

The Herald article said the recent appointment of former federal Member of Parliament Sophie Mirabella to the board of ASC, formerly known as the Australian Submarine Corp., would do nothing to ensure value for money.

Griggs said the military often has bought stock equipment from manufacturers.

"The military consistently produces gold-plated, high-maintenance capabilities," he said.

"It has for many years now utilized military off-the-shelf capabilities where practical and defense also has been successfully reducing the cost of maintenance.

"Recent successful examples of [off-the-shelf] purchases include the multimillion-dollar purchases of MH-60R helicopters and C-17 Globemaster aircraft."

Griggs also said there have been "numerous periods" when up to four Collins submarines have been in service. "In fact, for most of the past two years, the navy has continuously had four submarines in service."

ASC said in May that it welcomed the government's commitment, as stated in the 2013 Defense White Paper, to build the 12 submarines in South Australia.

"The government also has taken the important decision to suspend further investigation of the two Future Submarine options based on military-off-the-shelf designs in favor of focusing resources on progressing the options of an evolved Collins or completely new design," ASC said.

ASC Managing Director and Chief Executive Steve Ludlam said ASC has learned from the Collins-class project and will apply the lessons to the Future Submarine Project, as well as its on-going maintenance contract for the Collins subs.

"ASC's current focus remains on delivering benchmark availability for the Collins-class submarines and implementing recommendations of the Coles Review, together with the navy and the Defense Materiel Organization."

The Coles Review -- Study Into the Business of Sustaining Australia's Strategic Collins-class Submarine Capability -- was led by John Coles, an independent expert from BMT Defense Services in the United Kingdom, and published in January 2012.

Since the first of the vessels was delivered around 16 years ago the fleet has suffered maintenance issues and systems failures so that at times only one sub has been operational.

The report made 25 recommendations to restore the Collins fleet to an international benchmark by 2016.

Read more: http://www.upi.com/Top_News/Special/...#ixzz2sAqmtnEF