AUKUS is a bad deal for Australia
Despite great cost, Canberra runs real risk of never getting its submarines
Satyajit Das, a former banker, is the author of "Fortune's Fool: Australia's Choices" (2022).
Most of the discussion in Australia around AUKUS, the security partnership with the U.K. and U.S. that is to see the country acquire nuclear-powered submarines, has focused on political and security concerns.
Missing from the conversation is any acknowledgment of the real risk that the submarines, or SSNs in naval terminology, may never be completed. The failure of the nation's largest-ever public project would leave Australia vulnerable and significantly out-of-pocket, however, with the project forecast to cost up to AU$368 billion ($247 billion).
Australia would be well advised to contemplate other options.
The country has an indifferent record with such big undertakings. The National Broadband Network, the country's largest infrastructure project to date, was completed later than planned at more than four times the original estimated cost. The price tag for Snowy 2.0, a project to expand a network of hydroelectric power stations in the Snowy Mountains, has tripled since its launch in 2017.
Many defense initiatives have been plagued by similar problems. In fairness, big projects are intrinsically trouble prone. Only 8.5% meet their initial cost and time estimates and a mere 0.5% achieve their cost, time and benefit objectives, according to research by University of Oxford scholar Bent Flyvbjerg.
AUKUS faces several hurdles.
First, clear objectives are needed for the project's successful completion but these have not been established. The U.S. sees AUKUS as part of its plan to counter China's economic and geopolitical rise. For the U.K., the project is part of its "special relationship" with the U.S. and relevance as a global power. Both countries stand to earn substantial export income.
Australia's strategic objectives oscillate between deterrence and protecting vital shipping routes. Ironically, AUKUS expensively duplicates, in part, the existing 1951 ANZUS treaty whereby the U.S. must theoretically act to meet any common danger if Australia's territorial integrity, political independence or security is threatened.
AUKUS is simultaneously being promoted as an economic opportunity. However, the projected 20,000 direct jobs to be created over the next 30 years at a cost of AU$18 million is less than the 25,000 positions needed to absorb new workforce entrants each month. Improbable notions about the SSNs helping create a defense export business have been touted.
Second, the planning of AUKUS has seemed rushed from inception. Confusion over the disposal of nuclear waste, which will be Australia's responsibility, is already proving controversial. Time and cost estimates may prove over-optimistic.
Third, the project, with its trilaterally developed next-generation design, involves unproven technologies. This choice is odd given a French offer to Australia of off-the-shelf nuclear submarines.
British physicist Robert Watson-Watt's words may haunt the SSN: "Give me the third-best technology. The second best won't be ready in time. The best will never be ready."
Emergent technologies such as unmanned underwater vehicles or new anti-submarine defenses may render the SSNs redundant in any case.
Fourth, the U.S. and U.K. currently lack available capacity to supply the submarines. Australia has a skills shortage and limited naval engineering capabilities, certainly in relation to nuclear propulsion.
Fifth, a phased process involving new designs manufactured at different facilities controlled by three different partners with differing objectives is likely to prove difficult to successfully manage and coordinate.
Sixth, the project spans decades: The U.K. is to deliver the first SSN in the late 2030s with the first SSN built in Australia to be completed in the early 2040s. Changes in elected governments and administrations will mean inevitable alterations in project scope that will undermine its chances of success.
Finally, intervening events -- the perennial "unknown unknowns" -- are likely to complicate the enterprise.
Whatever its merits, the SSN project faces high risks of failure. A likely outcome is that rising costs and delays force Australia to permanently rely on U.S. and U.K. submarines either based in or operating out of its ports, as it is to do in the initial phase of AUKUS. Alternatively, foreign vessels may be obtained on lease, possibly crewed by foreign sailors.
In effect then, Australia will have outsourced part of its defense, ignoring the lessons of its abandonment by Britain during World War II.
The project carries considerable financial and geopolitical costs. The latter includes jeopardizing Australia's relationship with China, its most important trading partner, and complicating its association with Asian neighbors. Indonesia fears a regional arm's race and could restrict movement of SSNs through its territorial waters.
There were and are alternatives. One cheaper option would be to negotiate with China to seek a compromise on security concerns. This could be done bilaterally or preferably alongside Asian partners, such as Indonesia, Malaysia, Vietnam, the Philippines, Singapore, Japan and South Korea.
If no negotiated solution is possible and Australia perceives real and imminent danger, another option would be to acquire a small nuclear deterrent, though this would pose different challenges. France's "force de frappe," Israel and North Korea provide templates for this approach.
Another alternative, favored by comedians, would be for Australia to simply pay the cost of the SSNs in installments to China, which the arrangement is seen as targeting, as"protection money."
The unacknowledged reality is that AUKUS derives from deep psychological biases that underlie Australia's schizophrenic foreign policy. It tries to uncomfortably balance the nation's economic reliance on Asia, a long-standing anxiety about invasion by the "yellow peril" and a political and cultural affinity with the Anglosphere despite Australia's superficial multiculturalism.
Ultimately, despite bipartisan support, AUKUS, which will prove difficult to implement, does not make sense and will not make Australia safer.