Hunter-type audit report. Will Poland face the same problem?

The Australian National Audit Office (ANAO) has published a long-awaited report on a fleet investment programme of the new frigate Hunter worth US$30.8 billion, which are intended to form the basis for future naval capabilities. In the context of the program, it is worth considering whether in Poland the mechanisms that may have an impact on the cost reduction in the construction of frigate-class ships have been taken into account.

An audit report on Hunter-type frigates procurement processes for the Australian Navy, ANAO states that the Department of Defense (DoD) may not have provided the expected value for money due to failure to carry out an effective tendering process for the frigate project.

The audit also showed that the programme was not effective in implementing the milestones of the project. The first class ship is currently 18 months late and incurs additional costs, largely due to the project's immatureness.

The auditors pointed out that DoD had not carried out an effective tendering process limited to the design of the ship. The value of the three competing projects was not assessed by officials as the tender assessment plan (TEP) provided that the government would carry out this assessment.

The audit showed that Australia faces difficulties in implementing a project to build new frigates for its Navy, whose fleet, consisting of eight Anzac ships, has already reached the final stage of its life. The first of these ships, HMAS Anzac, was incorporated into service in 1996.

The new plan to build ships predicts that the Australian government will invest $30.8 billion in a fleet of nine new future Hunter-type frigates that will be larger than Anzac-type units and will be equipped with strong tools to fight submarines, including active towed sonar.

The Australian government claims that new warships will have the ability to fight at sea, which is the basis for national security for the next decades. The ships will be designed by the BAE Systems and built by the ASC Shipbuilding shipyard, which is part of the government's goal of supporting national shipbuilding industry and creating jobs in the country.

Hunter ships are expected to enter service in the late 2020s, replacing Anzac frigates. The delivery of the last ship is planned for 2044, but it depends on whether the BAE Systems will be able to make up for delays in the project schedule.

The Ministry of Defence of Australia acknowledged that the frigate construction program faces problems associated with cost increases.

"Since March 2023, when the Ministry of Defence informed ministers that the program was under extreme cost pressure, it has not informed the government of its revised estimate of acquisition costs, assuming that it continues to refine and approve respect," the report says.

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In March 2023, the Department of Defence informed ministers that the program was under extreme cost pressure, but did not notify the government of its revised estimate of acquisition costs, claiming that it continued to refine and approve the valuation of the program. This situation resembles the Australian Government's decision of June 2021 when it was granted to the Department of Defense and the BAE Systems more time to improve design maturity and develop a contract offer for the first batch of ships, which increased the contract price by $286 million.

Poland, as well as Australia, faces a challenge far higher costs of defence projects than originally planned. One example is program MIecznik. At the time of Poland's election of Babcock International, the construction of three frigates was to be PLN 8 billion. Currently, it is said that the costs can be up to PLN 14 billion, not as the Polish-mortal portal states in its article dated 9 May, about PLN 8 billion, which is worrying.

Overshooting the originally planned costs of defence programmes in Poland and Australia is a problem that may have serious implications for the state budget and other defence activities. Higher costs may lead to cuts in other programmes, as well as delays in project implementation or a reduction in their scope. All of this can affect the ability of the State to defend its interests and ensure the safety of its citizens. It is therefore important that governments carefully analyse costs and make informed decisions in the selection of tenderers and in the implementation of defence programmes.

PGZ Stocznia Wojenna reports that the cutting of the sheet on the first of the three frigateS OF THE MEASURANT is due to begin in August of this year, and soon the first structural elements. President of PGZ SA Sebastian Chłałek, who recently visited the War Shipyard, took a look at the progress of the work and the Special Systems Pioneer, where the latest vessel solutions in the field of communication systems are being developed.

As part of the frigate construction project for the Polish Navy, two shipyards are involved, which shared tasks in the construction phase itself. PGZ Stocznia Wojenna will handle sheet cutting, while Shipbuilding Repair will be responsible for the implementation of megablocks, bow and stern elements along with the equipment, and the assembly work will begin in 2024. After the work is completed, the hull blocks of the ship from Gdańsk will be transported to Gdynia, where retrofitting and launching will take place. Gym systems and integrated combat system will be built and integrated into the PGZ War Shipyard.

The Shipyard Portal received unofficial information about the withdrawal of Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Program. Nevertheless, the editorial board stresses that this decision should not adversely affect the implementation of the programme.

At the same time, it is worth noting that when governments decide to spend huge public amounts on defence programmes, it is important that they act in a transparent and reliable way. The authorities should provide information on the costs and progress of such projects, allowing Polish taxpayers to make informed decisions in the event of elections to the Polish Parliament.

On 11 May the editorial board of the Shipyard Portal sent a letter to PGZ SA asking whether Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding Shipbuilding

The construction of a frigate for the Polish Navy is not only a step forward for the Polish war fleet, which has never previously had units with such large combat capabilities, but also a technological leap for the Polish shipbuilding industry, which has not so far built such technologically advanced units.

Polish Navy frigates are to be equipped with the most modern technologies to become fully functional units capable of performing complex tasks at sea. Their length will be approximately 140 metres, the width slightly below 20 metres, and the maximum displacement will reach 7,000 tons. These ships will be equipped with a four diesel engine drive, enabling them to reach a maximum speed of 28 knots. In addition, the range of units will be over 6,000 Mm at an average speed of 18 knots, and the ships will have enough fuel for 30 days.

An important element of the Polish frigate combat system will be the submarine systems. The frigate Swordfish will receive active-passive sonar Thales BlueHunter mounted on the hull (old name Kingklip Mk2) and towed sonar low frequency CAPTAS-2 (or possibly CAPTAS-4 Compact). EuroTorp MU90 Impact torpedoes are planned to combat submarines, which are already in service of the Polish Navy. They will be fired from two double launchers.

The weapon, which will be managed by the integrated Tacticos combat system, will consist of the Leonardo OTO 76 mm L/62 Super Rapid and two OSU-35K systems (the Ship's Armed System – 35 mm). Each OSU-35K system will consist of 35 mm AM-35K cannon and an integrated ZGS-35K tracking head. The cannon will have a theoretical speed of 550 rounds per minute, and the effective range of fire will be up to 5 km. The frigate is also equipped with light MU-90 torpedoes, RBS-15 Mk3 anti-ship missiles and CAMM and CAMM-ER anti-aircraft missiles.

The frigates will also take four RHIB boats or unmanned USV vessels (two of 11 m and 7.5 m long). In addition, a seat is provided under the landing site for four mission modules placed in TEU containers.

The frigate MEASURANT is a revolution for the Polish arms industry, which has not yet built units with such technologically advanced combat capabilities. The Polish war fleet will gain modern and effective units that will be able to strengthen its international position.

Program MIecznik assumes the construction of three frigates, the first of which is to be commissioned in 2028 and another two in 2029 and 2030.

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It should be noted that increasing inflation, which is a global phenomenon, also affects the cost of defence projects. In the context of the programme, it is worth considering whether, when selecting a project supplier – Babcock International – the costs associated with customs charges have been taken into account, which could, if necessary, affect the final price of the construction of the frigate, as the UK is no longer a member of the European Union.

It should be noted that two companies participated in the final selection phase: German TKMS and British Babcock International. In the case of TKMS, despite the higher price, frigate construction costs may have been lower due to Germany's membership of the European Union and the related free trade agreements, which in practice means no customs costs, as opposed to the UK. In this context, we should ask the Armed Forces Agency if this was taken into account when selecting the project provider.

It is also worth noting that if the United Kingdom builds sections for our frigate, in addition to the purchased project, in relation to the departure from Shipbuilding Shipbuilding Shipbuilding Shipbuilding shipyard consortium, this may be an additional cost for our country, but we do not know yet. However, arms from the United Kingdom are not subject to customs duties, which could benefit the Sword Programme.

When analysing decisions of the Government of Australia and Poland in the context of reinforcement programmes, it can be noted that when selecting a potential bidder who will provide a project for the construction of frigates for Poland, any factor that could affect costs, including issues related to duties which Poland will bear in the construction of frigates, should be taken into account. We hope that this has been taken into account in this case.

Powyższy tekst nie ma na celu krytykowania programu budowy fregat dla polskiej marynarki wojennej, lecz ma na celu zapewnienie o przejrzystości jednego z najważniejszych i najdroższych projektów dla tych sił zbrojnych. Redakcja Portalu Stoczniowego zawsze opowiadała się i będzie się opowiadać za nowoczesną Marynarką Wojenną RP oraz dążenia do uczciwego i rzetelnego realizowania takich projektów. W naszym przekonaniu, program budowy fregat jest jednym z kluczowych prrogramów dla bezpieczeństwa Polski, który przyczyni się do wzmocnienia jej pozycji na arenie międzynarodowej. Dlatego też, popieramy budowę nowoczesnych jednostek, które będą w stanie sprostać wymaganiom współczesnego pola walki na morzu.

Written by Mariusz Dasiewicz