How to recover from the AUKUS Mess
Posted on 15 Oct 2021; 01:00 AM IST. Last Updated 15 Oct 2021; 01:00 AM IST.Summary: This article explains how to recover from the AUKUS mess, created by the Biden administration, in haste, and due to lack of oversight.
AUKUS the alliance between Australia, United Kingdom and USA, which is much hyped as the “Anglo-Saxon” empire, is in reality, not an empire, but an important longitudinal dimension. Europe is the second dimension, and Quad has great potential to become the third dimension. Of course, there could be many more dimensions. All these dimensions (or small worlds) are joined into one big world, by strategic alliances.
The Biden administration committed several mistakes in announcing AUKUS. The end result is a big mess, in which many countries got entangled, and are unable to comprehend the future direction.
AUKUS does have some merits, but unfortunately, the demerits are out weighing the merits of the alliance.
First and foremost, AUKUS need not receive all the hype it received, as it may be noted, that the loosely joined federation, is much larger and more important, than any single dimension.
Secondly, AUKUS need not bite into the French submarine deal with Australia. This issue created the maximum ruckus, and the rest of the article, explains how to untangle from the mess created by the AUKUS deal.
The insights gathered from the AUKUS deal, are as follows.
- The submarine deal between France and Australia, passed many levels of scrutiny in Australia. The original deal therefore may be considered as holy (or in good order).
- Australia insists that the submarines be manufactured on its soil. This is considered as the real problem (by experts in the field), for the delays and cost escalation.
- The original deal, which was at around $40 billion, got escalated to $60 billion. USA bumped the price tag further to $100 billion, by offering 8 nuclear submarines.
- Submarine manufacturing can take a very long time, and cost/time escalations are not unusual.
- Australia has a genuine and undeniable requirement for nuclear submarines, due to potential security threats.
A possible solution to untangle the mess created by the AUKUS deal is as follows.
- The original French submarine order could be reinstated, and the clause that the submarines must be manufactured in Australia, can be revoked.
France, which is a pioneer in manufacturing submarines, would now get an opportunity to showcase its best
Engineering talent, to provide the best product, as per the original contract.
The cost of this item is: $40 billion (approximately).
- USA could provide 4 nuclear submarines (off the shelf, prebuilt in USA), as early as possible, to Australia.
The cost of this item is: $12 billion (at $3 billion per piece).
- USA could build a naval base and a manufacturing facility, in Australia, to build another 4 nuclear submarines in the next 10 years.
The cost of this item is: $48 billion (at $12 billion per piece).
- The above items, can be summarized, as follows:
The total cost of the deal (in billions) is:
$40 + $12 + $48 = $100 billion.
What Australia would get is:
a) 12 Short fin (diesel) Barracudas manufactured in France.
b) 4 nuclear submarines, manufactured in USA.
c) 4 nuclear submarines, manufactured in Australia.
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Based on the approach suggested above, Australia would get a submarine fleet of: 20 units, with a mix of 12 diesel and 8 nuclear submarines, and a facility to manufacture nuclear submarines.
It is strongly believed, that Australia would definitely need a mix of diesel and nuclear submarine fleet, for several reasons. The USA offer is pretty good, but is more business like, and should add depth and vision, into the strategic needs of the Australian navy.
Remarks:
USA touted that its submarines cost half of French submarines, based on the following logic.
Price of nuclear submarine manufactured in USA = $3 billion.
Cost of 12 French submarines in the escalated Australian deal = $60 billion, which translates to $5 billion per piece.
The $5 billion price tag, is roughly twice as much as $3 billion.
The flaw in the USA logic becomes apparent, from the $100 billion deal it announced, for manufacturing the 8 nuclear submarines, in Australia.
From this deal, we could easily note that the cost of manufacturing a nuclear submarine in Australia is:
100 / 8 = 12.5 billion
What this reveals is that the cost of manufacturing in Australia, is roughly 4 times that of manufacturing the same submarine in USA. Since the cost of the same submarine manufactured in USA, is only 3 billion.
If we compare this figure ($12 billion) with the French submarines, the French submarines at $5 billion, are two and half times cheaper.
The escalation in cost and time for manufacturing French submarines in Australia, may therefore be attributed to the lack of facilities/infrastructure in Australia, to manufacture such a product.
Australia may have to develop its facilities/infrastructure to manufacture complex products like nuclear submarines. Of course, USA could share a part of the cost of building manufacturing facilities (from ground up), for the reward of a permanent naval base in Australia.