Today marks 12 months since the release of the ‘optimal pathway’ Australia needed to follow to acquire a force of nuclear-powered and conventionally-armed attack submarines (SSNs) under the AUKUS agreement with the United States and the UK.

The milestone has been marked by claims that domestic budget wrangling in the United States is a profound threat to Australia’s submarine plan with the Biden administration proposing to fund only one Virginia class submarine in fiscal year 2025.

Whilst Australia must be alert to US domestic issues that may affect AUKUS, including the looming presidential elections, to boil the agreement down to simple submarine numbers largely misses the point of the agreement and what’s been achieved so far.

Although the provision of SSNs to Australia is about capability, it is also about signaling to China that deep-seated US relationships in the region matter and should cause Beijing to think twice about its aggressive activities. AUKUS is just one strand of this network, but it is important to US Indo-Pacific strategy. To renege on the transfer of SSNs to Australia would undermine US credibility and influence in a region with many Southeast Asian states already hedging their bets.

There is, of course, an issue with the US submarine industrial base and much of the US wrangling on AUKUS is geared towards gaining more funding for its own industry. Australia is providing $4.5 billion to help the US step up construction.

The US Navy currently plans to have a fleet of 355 surface ships and at least 66 SSNs. It currently has 50 SSNs and, as the Los Angeles class submarines are gradually decommissioned, this may dip to 46 in 2030.

The US is now building, on average, 1.2 to 1.3 submarines per year.

To build up its submarine fleet, it needs to increase that rate to an average two Virginia class submarines a year. This increases to 2.33 boats per year if the US is to provide three SSNs to Australia in the 2030s.

Reaching and maintaining that rate will be further complicated by the need to prioritise the building of its seaborne nuclear-deterrent replacement, the Columbia class ballistic missile submarine (SSBN), and addressing the increasing SSN maintenance backlog.

But assuming that the US would automatically renege on the deal to sell Virginias to Australia in the 2030s because it may not meet its target of 66 attack submarines in 2053, fundamentally misunderstands the US strategy supporting AUKUS.

The US submarine industrial base is a risk, but it is not the sole consideration. Putting US domestic issues aside, there’s much to like about what the AUKUS optimal submarine pathway has achieved in its first year.

When the AUKUS plan was announced in September 2021, the lack of detail and consultation on Australia’s intent to acquire SSNs was apparent. Whilst the project has many critics, greater regional acceptance has been signaled by Singapore Prime Minister Lee Hsien Loong’s willingness to have Australian SSNs visit his country.

When AUKUS was announced, the three partners undertook to outline a detailed plan for Australia to acquire SSNs within 18 months. A year ago the nuclear-powered submarine optimal pathway was announced and set out an effective ‘crawl, walk run’ approach. Phase 1 established submarine rotation force West (SRF-W) with US and UK submarines rotating through HMAS Stirling from 2027. This ‘crawl’ phase would allow Australia to develop the infrastructure, maintenance and stewardship capabilities and skillsets to support nuclear-powered submarines.

Australia will acquire three to five Virginia class submarines in the 2030s. This ‘walk’ phase is intended to see Australia operate its capability at a smaller scale before proceeding to the ‘run’ phase and sharing the building of a new SSN with the UK.

There’s no denying that this ambitious plan has high degrees of risk—including tumultuous US politics and its lagging submarine industrial base. If it all goes wrong, the age of Australia’s Collins class submarines would expose it to a capability gap.

But despite a sparse flow of information, particularly for Australian defence industry, the AUKUS SSN optimal pathway appears to be on track.

Having three countries reach agreement on the optimal pathway was no mean feat.

Another significant achievement was the establishment of the Australian Submarine Agency. And Australia has focused heavily on training both its naval personnel and the wider defence industry workforce in submarine operations and maintenance. Australian officers are graduating from the US nuclear-powered submarine school, and maintainers are in Guam learning how to maintain SSNs.

Perhaps the most significant achievement was US Congress passing the National Defence Authorisation Act (NDAA) in December 2023 authorising the transfer of the three promised Virginias to Australia in the 2030s, the maintenance of US submarines in Australia by Australians, and the training of Australian contractors in US shipyards.

It’s not all rosy. Defence agreements of this magnitude never are. The NDAA authorisation of the transfer of course came with caveats, including the requirement for the US president of the day to certify to Congress prior to any transfer that the ‘submarines would be used for joint security interests’ and ‘Australia is ready to support their operations and nuclear power procedures’.

This endorsement is not a given. Australia will need to meet an ambitious infrastructure and governance plan to convince the US that it is able to safely operate and maintain the capability.

The strategic importance of this agreement is much larger than the issue of the number of attack submarines in the US order of battle, and Australia should not be constantly distracted by US domestic debates over its submarine industrial base.

Despite the plan’s risks, a lot has been achieved in 12 months.

I have previously argued for Australia to take an active role in the design and procurement process for the nuclear-powered, conventionally armed submarine (SSN) to be acquired under the AUKUS agreement with the US and UK.

That is essential to ensure an Australian based, reliable and sovereign supply chain, able to sustain our own submarine capability.

Construction costs are not trivial, but sustainment will be in the order of 70% of the costs of ownership—about $260bn of the estimated $368bn total cost. With an Australian based supply chain, the through life support costs would be significantly less, and much of the money saved can be directed to Australian industry and its society.

We must learn from the past.

In the 1960s the Oberon class submarines were acquired off-the-shelf from the UK and relied extensively on a British-based supply chain. During the Falklands war in 1982, our paid-for spares were diverted to support the Royal Navy’s submarines.  Australia was forced to tie up and cannibalise its own submarines to keep a limited number at sea. The loss of sea days caused a crewing crisis that took years to recover from.

We did far better with the Collins class. The Oberons had suffered from extremely high maintenance costs and it was expected for Collins that an Australian construction program and a high local content would significantly reduce these costs. We resisted the advice to build the first of class overseas, but compromised by opting to build the two more complex sections in Sweden to speed up the delivery of the first submarine. This was a mistake. The weld standards achieved in Adelaide were world class but the Swedish sections both contained major welding defects requiring many hours and costing millions of dollars to repair at the submarine’s first refit.

A parallel project, building the ANZAC class frigates, was very successful both financially and in build quality. This was mostly due to the engineering strategy which involved an Australian-owned shipbuilder, embedding Australian engineers in the overseas design office and repatriating the design office to Australia at the build yard for the detailed design phase, designing the frigates to Australian standards and codes from the outset to ensure an efficient build and later sustainment program and, most importantly, a requirement for a minimum of 70% of the contract value to be spent on Australian industry.

The much-maligned Collins program followed exactly the same recipe. The detail design was undertaken in Australia, at the ASC assembly yard, under supervision of The Swedish firm, Kockums. It incorporated Australian standards, definitions and codes so that work instructions and technical procurement specifications could be dealt with by an Australian supply chain, industry and workforce. Where no Australian standard existed, the Swedish ones were the default.

The program was a success by global standards. Initial delivery was nine years after contract signature, from a yard built on a greenfield site.

The goal of 70% local content in Collins was achieved.

The Kokoda Papers report, Sub Judice: Australia’s Future Submarine, published in January 2012 found the sail-away cost of the Collins submarines were just below international average on a cost/tonne basis.  Maintenance costs are half of the Oberon class using the global benchmark of annual expenditure as a percentage of Replacement Asset Value (RAV). Today, over 90% of the cost of sustaining these submarines is spent in Australia—because we insisted on the Australian build with high local content engineered-in during the design for the 1^st of class. Prior to the disruption of Covid, Australia was achieving world class submarine availability. We have demonstrated that we know how to do this on both Collins submarines and ANZAC frigates. Let’s build on that.

If the recipes for the Collins and ANZAC ship projects are followed, and they were good, solid engineering recipes, then the AUKUS submarines would be constructed in Adelaide by an Australian owned shipbuilder. Also, if the contract requires a minimum of 70% of the contract value to be spent with Australian industry, then that will set Australian industry on course to be involved heavily with the AUKUS submarine sustainment program. 90% should be our benchmark for the AUKUS submarine sustainment program.

There are two lessons to draw for the future from these experiences. The first is not to condemn the partnership with the UK or USA, but to observe that, when push comes to shove, nations will react in their own best interests. The second, that Australia can master the technology as well as anyone; the build standard in Collins achieved by an Australian shipyard was world class, for weld quality and hull circularity; both critical yardsticks of submarine hull construction.

Australia is planning on a force of eight SSNs. I have argued that we need at least 12.  As the second hand and new build Virginia class SSNs we intend to acquire are retired, 15 or 33 years respectively after we acquire them, they’ll be replaced by additional SSN AUKUS, making us an equal partner with the UK, which is currently building a force of 7 Astute class SSNs.

The design for the new submarine is underway and offers an opportunity for Australian industry to be involved from the beginning of the program.

It won’t be easy to take this path, the first AUKUS SSN is planned to be built in the UK for the Royal Navy; the temptation for Australia to subsequently utilise a UK based supply chain for its submarines must be resisted and legislated against in the contract. This make sense economically and from a sovereignty perspective, as I have argued above. It would also be prudent planning, since it is quite likely that the UK build will be delayed; the first Australian build may well occur in parallel or ahead of the UK’s build.

I have argued that the baseline design for SSN AUKUS should be shifted to the Virginia Class design. The US plans to commence building its Block VII Virginia in 2029 and this timing would seem a good fit for the an SSN AUKUS (V).  Most importantly in this context, a Virginia baseline would avoid the need to sustain two different classes of SSN, each with its own supply chain.

Regardless of the baseline chosen, the supply chains and shipyards of both the USA and UK are currently hard pressed to meet their own needs. Australia has facilities and capabilities that can manufacture submarine parts for both our partners. If we do that, we can upskill and grow our knowledge before we start to build our own boats. It would also be a sensible and positive way of climbing the learning curve, while bringing a very valuable contribution to our new partnership. Some Australian-owned companies have facilities in USA and UK that can also enter their SSN supply chains.

It’s intended to select the Australian shipbuilder this year. This adds additional urgency to the selection of the baseline for the design. A UK centric industrial arrangement would make little sense for a Virginia baselined SSN AUKUS (V).

Regardless of the baseline, Australia should follow the successful Collins and Anzac project model and select a majority owned, Australian company to build our submarines.

The Australian submarine builder, ASC and its existing supply chain of over 1,200 companies provides the best starting point. We should build from a privatised ASC, incorporating the leading engineering and project management skills available in Australian industry and a minority shareholder with a successful record of building SSNs (and an American accent!).  We should not seek to develop a separate Australian, or worse, foreign-owned entity which will compete with ASC for the valuable and limited manpower resources available to sustain Collins and deliver SSN AUKUS.

Delivering a sovereign Australian supply chain, able to control our own destiny, including in a crisis, maximising spending and jobs in Australia and contributing to the AUKUS partnership will require proactive, strategic direction from the Australian Government in establishing an effective industrial program. That process is now urgent.

It’s critical for our citizens to understand that we are now at the only point in this program where Australia’s government has leverage. That leverage must be used constructively to build our own future, and to fully pull our weight.

The SSN AUKUS ‘optimal pathway’ calls for the UK to build the first of the nuclear powered and conventionally armed attack submarines at Barrow in Furness, starting as early as the late 2020s. The submarine is expected to be operational as early as the late 2030s—approximately 10 years to build and commission. How realistic is the UK component of this plan?

In my earlier Strategist article, I flagged the impact of years of under investment, long delays in maintenance, extended patrols to sustain the continuous at sea deterrent and poor morale leading to personnel shortages in the Royal Navy’s submarine capability. This underinvestment has also impacted shore infrastructure, with an SSN and a SSBN ballistic missile submarine reportedly awaiting a certified dock since early last year.

In terms of submarine numbers, manpower and shore infrastructure, recovery will not be simple or quick. A recent analysis of the UK’s Defence planned equipment acquisition over the next decade identifies a worst case £29.8bn or 10% shortfall in the budget, supporting the conclusion that it is: ‘unaffordable, with over spends on its nuclear program now clearly responsible for the overall insolvency of the plan’.

The UK Submarine Delivery Agency’s 2022-23 annual report is a masterpiece in reassuring corporate reporting, without providing any explanation of what is being done to overcome the shortcomings noted above, or any precise target dates for the completion of new Astute SSN or Dreadnought SSBN boats. So, we are forced to make some estimates.

Each of the last three Astute class now in commission (HMS Artful, Audacious, Anson) has taken 130-132 months to build. Two submarines remain under construction. HMS Agamemnon is expected to commission in mid 2024 after a 130 month build and HMS Agincourt is expected to commission in mid 2026 after a 99 month build. The shortened build time for the last Astute is presumably intended to make room for SSN AUKUS? The 130 month build time may well be a result of funding restrictions, not yard capacity, but it sets the workforce capability, so 99 months is still a huge step up for the workforce and facilities. Ninety-nine months to build and commission Agincourt would be 31 months shorter than the previous four submarines in the class and 13 months faster that BAE Systems has ever built an Astute. The risk of delays from completion of the final Astute is significant, with ramifications for the start of SSN AUKUS.

The challenge for BAES in completing the Astute build and starting the SSN AUKUS build is compounded by other, higher priority work in the yard; construction of four Dreadnought class ballistic missile submarines. These are urgently required to relieve the elderly and increasingly unreliable Vanguard class, which are struggling to sustain the continuous at sea deterrent. Three Dreadnoughts, a large, 17,200 ton submarine (more than twice the size of Astute), are currently under construction, the UK Ministry of Defence advises that the program is on track and the first is due to enter service in the ‘early 2030s’.

All does not seem well however. In March 2023, £2bn of the £10bn contingency fund allocated for the project was committed ‘to bring construction forward’. Committing 20% of the project’s contingent funding part way through the construction of the first submarine is most unusual. In the absence of an improved completion target announcement, I assume that the early 2030s remains the target? So, it would seem likely that the contingency has been committed to top up an inadequate original budget or to recover from difficulties, in order to maintain the early 2030s completion date.

Construction of the next two SSBNs started in 2019 and 2023, with the fourth yet to commence. Allowing for (an optimistic) 12 years to build each submarine, the final boat will not be completed before the mid to late 2030s.

The first UK SSN AUKUS build, starting in the late 2020s and aiming for an operational date in the late 2030s, is therefore in a queue, behind the higher priority, Dreadnought and Astute programs.

The design process for SSN AUKUS does not seem to be in any better shape. Although the UK MOD has issued a £3.95B contract to BAES for the detailed design, there are reports that BAES is seeking significant help from design staff at the US builder, General Dynamics Electric Boat, to assist in this process, possibly requiring additional funding? There have been no indications that Australia is actively involved in this process, or plans to mandate an Australian supply chain as I have argued for earlier.

Given this situation, I suggest that the UK’s SSN AUKUS 01 design and build is highly likely to be later than planned.

Even if it proceeds to plan, Australia is unlikely to benefit from the lessons learnt in the UK’s construction of the first SSN AUKUS, as the first build in Australia is planned on a similar timescale. Construction of the RAN’s first SSN AUKUS in Australia is intended to start in the late 2020s, taking longer to build, achieving an operational submarine in the early 2040s.

In my recent article I argued that shifting the SSN AUKUS design baseline to the US designed Virginia class SSN would reduce risks, cost and the time to acquire SSN AUKUS.

Whilst the US shipbuilding industry has no spare capacity to build additional SSNs for Australia it is in a far healthier state than the UK’s. The most recent three of the 22 Virginia class submarines  commissioned in an average of 59 months, less than half the Astute build time.

Shifting to a Virginia baseline for SSN AUKUS would avoid the shortcomings and risks arising from the UK situation. It would avoid the problems of a UK based supply chain for a small number of submarines and trying to build an unproven design. Virginia provides a highly refined and proven design baseline, with the possibility of a much shorter construction time. Australia will be operating one of many Virginia class submarines in the Indo Pacific. In addition to these advantages, it may be able to avoid or reduce the need to purchase Virginia class submarines from the USN’s current inventory, an increasingly problematic concept.

A Virginia baseline for SSN AUKUS would also relieve the UK of the need to lead the design, freeing up resources to reconstitute its submarine capability and complete the Dreadnought and Astute programs.

The answer to my question in the opening paragraph is that the UK components of the plan are hostage to several pre-existing and higher priority risks, and success is unlikely.

It is time for a change of direction before the three countries waste more time and resources on a plan which is not going to work.

Britain’s Royal Navy has advertised for a suitably experienced individual to fill the role of its director of submarines, a rear admiral who acts as the senior, professional head of its submarine arm. The position is to be filled in April 2024. If this is an early April fool’s joke, the UK Ministry of Defence is part of it.

As the Times newspaper observed on 5 January 2024, the advertisement ‘exposes shameful recruitment gaps’ in senior leadership positions in the RN’s submarine arm.

Under the AUKUS optimum pathway for Australia to transition to nuclear-propelled submarines, it is intended, subject to US congressional and presidential approval, to purchase three to five Virginia-class submarines to fill the capability gap left by the retirement of the six Collins-class boats. This is intended to allow time for a newly designed submarine to be built in partnership with the UK—the so-called AUKUS SSN. The state of the RN and particularly its submarine capability is therefore of more than passing interest.

This position would normally be filled by promoting a suitably qualified candidate from the RN’s senior serving submariners. The apparent lack of suitable candidates prepared to accept promotion to fill the position is extraordinary. Reportedly, internal advertising led to only one applicant, who lacked the pre-requisite submarine command experience. This failure led to the public advertisement.

Under my arguably simplistic interpretation, it would appear that Britain’s senior naval leadership and the government have lost the commitment of their submarine arm.

How did it come to this?

There was a steady decline in the RN submarine capability starting in the mid-1980s with the design of the Vanguard-class ballistic missile submarines. To save costs, the length of the submarine was constrained to fit into the existing dry docks. This led to a cramped and difficult-to-maintain submarine. Running them well beyond their design life of 25 years, and the protracted absence of one of the four submarines to refuel the reactor because of a defect, placed additional pressure on the remaining submarines. As a consequence, the very long patrols necessary to maintain the ‘continuous at-sea deterrent’ have severely strained morale and probably contributed to a recent ‘near miss’. Poaching of personnel from other submarines has reportedly been necessary to get submarines to sea. As Robert Forsyth argued recently, inadequate funding and the priority attached to this role have seriously eroded the RN’s conventional capability.

The process accelerated in the 1990s. With the fall of the Berlin Wall and the end of the Cold War, the project to replace the Swiftsure-class and Trafalgar-class attack submarines, called project SSN20, was cancelled to save costs. The submarine shipbuilding workforce dropped from 13,000 to 3,000 as building ceased. Many of these skilled workers moved away from Barrow to find other employment. The Royal Corps of Naval Constructors was significantly downsized, with a loss of in-house submarine design expertise. In 1991 the construction of further Upholder-class conventional submarines ceased and it was decided to decommission existing Upholder- and Oberon-class conventional submarines. This decision ended the route to early submarine command and charge positions for engineers, making a career in submarines less attractive.

In the early 1990s the RN began a process of decommissioning SSNs to reduce its force from 17 to 6 attack submarines. As a consequence, the number of serving submariners was reduced by more than half. This has narrowed the talent base and resulted in a lack of suitable candidates for senior positions, reinforcing the point I made recently about critical mass in submarine personnel. I would argue that the RN is below critical mass to create the senior leadership for its submarine force.

The story of the delayed and over-budget Astute class build is well set out in Wikipedia and the RAND review into the program.

More recently, in 2019 the second submarine squadron was disbanded; all submarines are now based in Faslane, Scotland. The remote location of Faslane and reduced chances of a posting to southern England make submarine careers less attractive.

Although all submarines have to be refitted in Plymouth/Devonport, the dry docks there are not up to standard. Two submarines, HMS Audacious and HMS Victorious have been alongside in Devonport for months, waiting for dry docks to be refurbished.

In a reorganisation, the position of flag officer submarines was disbanded, replaced by the director of submarines, a position buried in a larger headquarters. This is the job no suitably qualified serving submariner wishes to fill.

For those who trained and served with the RN, including the ‘Perisher’ command course, and lived in awe of the RN’s achievements in the Cold War, this is indeed a sad saga. It is an unfolding train smash, as the Navy Lookout observed recently: ‘The RN could be at a dangerous tipping point where there is such a loss of skills and institutional knowledge, that the situation becomes almost unrecoverable, even if greater resources are available in the future.’

It is not going to be fixed quickly, as with a pay rise!

Importantly, since the RN submarine capability is the foundation for the partnership upon which Australia intends to build our nuclear submarine capability it calls into question the practicality of the current, so-called ‘optimum pathway’.

There are lessons from this debacle for Australia’s AUKUS program.

The RN appears to lack critical mass and adequately funded build, logistic support and infrastructure programs. The limitations of the current UK submarine design base are another.

We should not accept any argument that building the first RAN SSN AUKUS in the UK would be quicker, cheaper or more efficient—let’s not fall for that April fool’s day joke! As I have argued earlier, suggestions that contemplate building the first of the RAN’s AUKUS submarines in the UK are profoundly disturbing and would condemn us to a UK-based supply chain.

Given the growing accumulation of political, personnel, schedule, cost, capability and design risks apparent with the ‘optimum pathway’ it is time to re-examine the plan.

Would it be possible to start building SSN AUKUS earlier if an updated Virginia was used as the basis for the design?

The designers should be tasked with achieving a simpler submarine, easier and quicker to build, simpler to operate and cheaper to own, including a smaller crew. Compared to the latest Block V Virginia, AUKUS (V) should be smaller and focused on sea denial, anti-submarine and anti-surface warfare with the agility to operate in the littorals. It could give the US Navy and RN an option to speed up their own build programs in the face of the deteriorating strategic setting.

If so, this would avoid the huge complications and expense of the RAN operating two different classes of SSN. It would build on the USN’s very successful Virginia construction program of 40-plus submarines and the facilities established to support the Virginia-class submarines based in WA as the Submarine Rotational Force—West (SRF-W).

Importantly, it would avoid the risk of a delayed UK-based design phase, which seems highly likely, given the parlous state of the UK’s submarine capability and current priority afforded the construction of the Dreadnought-class ballistic missile submarines.

Finally, it could also reduce or avoid the need to purchase three to five Virginia-class SSNs from the USN, something that is looking increasingly improbable and difficult. In the interim, the SRF-W and Collins provide Australia’s submarine capability. Just a thought.