Evolved Cape Class Patrol Boats: SEA 1445-1
The evolved Cape class boats are based on the Cape class, with defined engineering changes. The design changes were introduced to address known issues, increase the quality of life for ship’s staff, manage obsolescence and mandated changes to policy, and to increase the use of Australian supplied equipment. Key design changes related to the main generator, freshwater generator, communication systems and accommodation.Under the contract the first evolved Cape class boat was to be delivered by Austal to Defence in September 2021, with the sixth and final hull to be delivered in March 2023. As of December 2021, Austal had not yet delivered the first boat. The evolved Cape class fleet is a transitional capability. Defence intends the last evolved Cape class boat to be withdrawn from Navy service in July 2030, following delivery of the twelfth and final Arafura class OPV.
The Deputy Secretary of Defence’s Capability Acquisition and Sustainment Group (CASG) and the Chief of Navy received, on 5 and 6 September 2019 respectively, an unsolicited proposal from the Chief Executive Officer of Austal. The proposal stated that: "Austal has identified a potential cost saving and risk reduction initiative relating to the Commonwealth's patrol boat fleet that may interest both the Government and the Royal Australian Navy (RAN). This initiative would also support workforce continuity in Henderson [naval shipyard, Western Australia] as part of a broader requirement to ensure capability is retained for future Commonwealth naval sustainment and shipbuilding programs.
"Specifically the initiative is that the RAN lease 6 new Cape Class vessels (CCPBs) in addition to the 2 CCPBs already in service and retire early the 13 Armidale Class Patrol Boats (ACPBs) rather than perform any life of type extension (LOTE) work. A fleet of 8 CCPBs is estimated to be sufficient to maintain patrol force availability above the target of 250 days / month through the transition period to the new OPVs. … The total through life cost savings of this initiative for the RAN Patrol boat fleet is estimated at 100 – 150 M AUD over 8 years."
On 30 April 2020, the Department of Defence (Defence) contracted Australian shipbuilder Austal Ships Pty Ltd (Austal or Austal Limited) to deliver six new Evolved Cape Class Patrol Boats (ECCPBs or evolved Cape class), valued at $356,795,568 (GST inclusive). This procurement was not outlined as an area of Defence investment in the 2016 Defence publication, Integrated Investment Program. To acquire the six new ECCPBs, Defence undertook a limited (sole source) procurement, following receipt of an unsolicited proposal from Austal on 5 September 2019.
Prior to receiving this proposal, Defence had been developing a life-of-type extension (LOTE) plan which included a full LOTE for six of the Australian Defence Force’s (ADF) current fleet of 12 Armidale Class Patrol Boats (Armidale class) and a partial LOTE for three vessels. LOTE refers to the work to be undertaken to extend the effective service life of the vessel beyond its original service life. This approach was in line with the November 2017 approval by the Australian Government of an indicative capability transition plan to transition from the Armidale class to a new fleet of 12 Arafura Class Offshore Patrol Vessels (Arafura class or OPVs).
In addition to the Armidale class LOTE, the government’s approved indicative plan (costed at $103.7 million) involved an extension of Defence’s existing lease of two Cape class Patrol Boats (Cape class). In April 2020, Defence sought government approval to amend the transition plan by acquiring the six ECCPBs and discontinuing the Armidale class LOTE. The government approved the acquisition of six ECCPBs on 6 April 2020. The government also agreed that the Minister for Defence and Minister for Finance would determine the appropriate funding method — either to lease, purchase outright, or a combination of both by exchange of letters. The government approved an amount of $1.126 billion for direct purchase or $1.194 billion for lease, which included $322.2 million (GST exclusive) for the price of the boats and $7.8 million for capitalised interest if the boats were leased.
Anticipated delivery delays of 26 to 35 weeks, resulting from the contractor’s need to undertake rectification work following the use of defective aluminium in the construction of the first two boats, and the production workforce inefficiencies it has reported, have required Defence to plan for the extension of service of Armidale class patrol boats and a reduced in-service period for the evolved Cape class. As of July 2021 net additional costs arising from projected delays for the delivery of the evolved Cape class and the Offshore Patrol Vessels are estimated by Defence at $43.9 million.
In late October 2020, Austal notified Defence of defective five-millimetre aluminium plate used in the construction of the first two boats, and that further testing was underway. Austal advised that there would be an impact on its ability to achieve contracted milestones as ‘significant remediation works’ were required for the first two boats. On 15 December 2020, Austal further advised Defence of defects with four- and six millimetre aluminium plate used in the construction of the first two boats.
The defective aluminium was subject to sensitisation or a material flaw resulting from inappropriate heat treatment, whereby the aluminium becomes more susceptible to corrosion at the intersection of the grains of the metal, which can lead to cracking. This risk is heightened in areas of high stress and after prolonged periods of service at elevated temperatures, particularly where seawater is involved. The defective aluminium was also used in the construction of three Guardian class patrol Boats, though to a lesser extent than on the evolved Cape class.
Most of the aluminium sourced by its Australian distributor came from China, but the mill and certifying laboratory concerned had been removed from its list of accepted suppliers. Since 2016 Austal has run a joint venture in China with the Guangdong Jianglong Shipbuilding Company called Aulong Shipbuilding, which constructs "commercial passenger and non-military vessel opportunities". Austal, which had a 40 percent ownership stake in Aulong Shipbuilding, had licensed a number of its "proven, commercial aluminium vessel designs" for marketing through mainland China.
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