by Peter Yule
and the politicians who are demanding “when can I make my
speech?”, and the chief of the navy, who says “I’ll sign off on it
even though I know it’s not ready but I need to get them to sea”’.
As a result, ‘everybody was trying to have a slice of me and I had
no power and bugger all money and hadn’t wanted the job in the
first place’.
When Asker took over, the navy was dissatisfied with the capa-
bilities of the submarines and the continuing mechanical failures;
the project appeared to be stalled and there was only $400 mil-
lion left in the budget. Unlike most in the navy he did not blame
ASC and Kockums for all the project’s problems, conceding that
in many areas of dispute, notably noise, the submarines met or
nearly met the contracted specifications but the navy’s operational
requirements had changed. Nonetheless his job was to get the
submarines to a level that met the navy’s minimum operational
requirements, and he would do this even if it involved a more
confrontational approach to ASC or seeking help from any source
that would give it.
The position of Hans Ohff was critical at this stage of the
project. To the navy, and increasingly to the project office, he
appeared to be stubbornly resisting their attempts to bring the
submarines to the minimum level required to carry out opera-
tions. Lawyers Paul Armarego and Wal Jurkiewicz recall their
amazement at the games that were played between the project
office and ASC over fixing faults in the submarines. This was the
‘TI338 regime’ and the process would ‘drag on for years’:
Commonwealth: ‘We are writing to advise X is a latent
defect.’
Hans Ohff: ‘We deny that.’
Commonwealth (a year later): ‘We still think it is a defect.’
Hans Ohff: ‘We deny that.’8
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Ron Dicker believes that the ‘TI338 regime’ contributed to the dif-
ficulties between ASC and the project. The TI338 was the form on
which warranty defects were recorded and before anything could
be done they had to be evaluated to decide whether ASC or the
project would carry the cost. This resulted in endless arguments.
Dicker found it was not an efficient process for fixing the boats
and keeping them at sea. In other projects he had been involved
in there was a system whereby any defect was analysed and fixed,
and then the responsibility for it was arbitrated by an independent
body.
Many people in the navy and the project office tell of their
confrontations with Hans Ohff during this period. Peter Clarke,
who was project manager during 1998, deliberately set about pro-
ducing a harder, tougher relationship with Hans Ohff by insisting
on ASC meeting its milestones as ‘the overall project plan had
been lost sight of’. Although he had previously got on well with
Hans Ohff, within a few weeks of beginning his new job they were
shouting at each other: ‘Hans Ohff would say things like, “You’re
only taking this line to get yourself promoted”.’9 Clarke claims
that Hans Ohff ‘is the only man ever to have hung up on me – all
the others have been females,’ but that being said, they remained
friends throughout the project.
Hans Ohff’s attitude and motives are little understood and crit-
icisms of him are often made by people with little knowledge of
his full role in the submarine project. He had a greater emotional
commitment to the project than almost anyone else involved, and
those who might match him for commitment – like Oscar Hughes,
Graham White, Andy Millar and other long-serving members of
the project team – largely share his perspective on the problems of
the submarines. Ohff’s entire working life since he arrived in Aus-
tralia had been devoted to the development of Australian engineer-
ing, and for him building submarines in Australia was the great
nation-building project for his generation. He had been the first to
argue seriously that the submarines could be built in Australia, and
then devoted much time and money to spreading his vision to gov-
ernments and industry. Devastated when Eglo Engineering chose
the wrong side in the selection process, he saw his return to the
project as the opportunity to ensure its success. When he screamed
at the crew of a submarine returning to Osborne after a break-
down, ‘What have you done with my submarine?’ he expressed a
T H E P R O J E C T I N C R I S I S 1 9 9 7 – 9 8
263
genuine feeling of ownership that was hard for senior navy person-
nel on two- or three-year rotations to comprehend. While Hans
Ohff always conceded that the submarines had teething difficul-
ties, particularly with the diesel engines, and that there were some
issues where compromises on performance were struck between
ASC and the project office, he genuinely believes that the prob-
lems were greatly exaggerated by anti-submarine elements in the
navy and by Coalition politicians looking to damage Kim Beazley.
For him, the navy and the politicians ‘took the elation out of the
project’.10
While the combat system remained the most intractable prob-
lem with the submarines during 1997 and 1998, on most other
issues there was clear if slow improvement, and some (such as the
leaking shaft seals) were dealt with completely. However, in 1998
a new issue developed with the propellers which proved difficult
to resolve and led to bitter recriminations between ASC, the navy
and Kockums.
For over a year there had been growing concern about cavi-
tation from the propellers and the usual disagreements between
ASC, which said the cavitation resulted from the way the sub-
marines were operated, and the navy, which blamed design and
manufacturing flaws. However, in August 1998 a crack was found
in Collins’ propeller during routine maintenance, and checks of
the other submarines revealed incipient cracking problems. Kock-
ums and ASC claimed there was nothing wrong with the design of
the propellers, but the Sonoston alloy demanded extremely pre-
cise manufacturing techniques and they accepted that some of the
early propellers were not made to the required standard. The navy
and the project office, however, believed that the problems were
more fundamental and argued that the propellers should be re-
designed. When Eoin Asker went overseas to look for advice, he
felt that Kockums was a company in crisis, its design expertise was
declining and its response to the problem was slow. In contrast
the Americans were keen to help, offering to remodel a propeller
to try on one of the Australian submarines.
In response to this offer, a Swedish-designed propeller was sent
to America. In Asker’s view ‘this was an operational imperative –
it would have taken ages for the Swedes to deal with it and it
wasn’t in Australia’s interest to muck around’. A second pro
peller
was sent later and a third in 2000.
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The reaction from Kockums to the despatch of its propellers
to America was one of outraged disbelief that the navy would
disregard the company’s intellectual property rights. As Kurt Blixt
puts it: ‘All Swedes were deeply affronted when Australia gave
away Swedish know-how without consultation.’ They were even
more affronted when the propeller came back marked ‘Australian
and US eyes only’ and the Kockums people and even Hans Ohff
were not allowed to look at it. Hans Ohff recalls that when some
American engineers came to ASC to look at the propeller, he said
they could only look at the modified tips but not the rest of the
propellers. ‘I was only playing games with them but they went
right off.’
Within the navy there was full agreement on sending the
propeller to America. Peter Clarke states simply: ‘The Swedish
propeller was crook and as soon as we got a decent US propeller
the performance greatly improved.’ Civilians in the project office
were divided. Mark Gairey says: ‘I still think that if we had not
gone to the Americans we might still have found a solution, but
probably nowhere near as good a solution – the American solu-
tion basically solved all the problems with the propellers.’ How-
ever, his colleague Greg Stuart thought that the Americans did not
understand the Swedish design philosophy which the Collins class
was based on and they could do little to help. Further, he felt that
it was a clear breach of the contract to release a propeller to the
Americans. He agrees that Kockums was often intransigent at this
time ‘but with good reason’.11
The dispute over the propellers later merged with the wider
issue of the ownership of the intellectual property rights to the
design of the submarines, but the bitterness felt over the propellers
meant that the issue of intellectual property was discussed in an
atmosphere of distrust and recrimination.
The continued problems with the submarines and the increas-
ingly acrimonious disputes between the parties involved inevitably
caught the attention of the media, and during 1997 and 1998
the new submarine project was subjected to a barrage of press
criticism not experienced by a defence project since the F111s
in the 1960s. ‘Noisy as a rock concert’ must be one of the most
remembered headlines in recent Australian history, and it is almost
universally quoted by members of the public when asked about
the submarines.12 Even a decade later it is frequently quoted in
T H E P R O J E C T I N C R I S I S 1 9 9 7 – 9 8
265
Melbourne Herald Sun, 28 July 1999 (Courtesy of Jeff Hook.)
articles on the submarines, often with the bald statement that it
came from a ‘secret US navy report’ on the submarines. For exam-
ple, on 27 March 2006, the Sydney Morning Herald reported that
the submarines ‘acquired the unflattering “dud subs” tag in 1998
after a leaked secret US Navy report said they were as “noisy as a
rock concert under water”’. This story has persisted in spite of offi-
cial denials that the phrase – or anything like it – ever appeared in
an official report.13 The headlines ‘Dud subs’ and ‘Sub-standard’
are almost as well known and also regularly reappear.
For the crews of the submarines and the staff of ASC and
the project office the impact of the ceaseless disparagement was
demoralising; for the navy hierarchy it was a daily reminder that
their largest project was under threat, but for the politicians it
suggested that there were political points to be won or lost.
Throughout the life of the Hawke and Keating Labor govern-
ments the submarine project received unwavering support from
the government. Kim Beazley left the Defence portfolio after the
1990 election, but his successor, Robert Ray, always staunchly
defended the project, most notably when it was the subject of
a highly critical audit report in 1992.14 The Labor Party had a
strong commitment to the project because it epitomised many
of its central themes in that era, such as national independence
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in economic and defence policy and the encouragement of high-
technology manufacturing industries.
Following the election of the Coalition government in 1996 the
submarine project’s benign political environment rapidly turned
malignant. The project office and ASC had been accustomed to
being nurtured and protected by those who wielded political
power and it was a rude shock when this changed. The new gov-
ernment showed no feeling of ownership of the project and had
no hesitation in denigrating the submarines as a means of attack-
ing Kim Beazley, who was leader of the Labor Party from 1996 to
2001.
Members of the project team immediately noticed the change
in political attitudes. They felt that the government did not see the
success of the submarine project as vital for the defence of Aus-
tralia, but rather saw its difficulties as presenting an opportunity
for political point scoring. For Ken Grieg it was a great disap-
pointment that ‘instead of saying the submarines were a fabulous
achievement for Australia, the Coalition could only look at the
project in party political terms’. At ASC the government’s denigra-
tion of the submarine project contributed to a steady fall in morale
in the late 1990s and a breakdown in the relationship between
the company’s Swedish and Australian shareholders. Hans Ohff
believes the government was prepared to destroy the project if this
could help destroy Beazley.15
This interpretation of the government’s motives was not based
solely on paranoia. John Moore, who was Minister for Industry
in the Coalition’s first term before becoming a key figure in the
submarine story as Defence Minister in the second term, recalls
that: ‘The general view in the new government in 1996 led by
Max Moore-Wilton [the Secretary of the Department of Prime
Minister and Cabinet] was to close the project down and sell the
submarines for scrap.’
ASC and the project felt directly threatened when John
Howard appointed as Minister for Defence Ian McLachlan, who
was seen as an extreme economic rationalist committed to slashing
government expenditure.16 Hans Ohff believed that McLachlan
had been given the job ‘to dismantle the submarine project’. How-
ever, McLachlan was never an orthodox politician, being commit-
ted to an ideology rather than a party, and he did not play the party
game. After assessing his portfolio he became a great enthusiast
T H E P R O J E C T I N C R I S I S 1 9 9 7 – 9 8
267
for the submarine project and, rather than dismantle the program,
he looked to extend it by taking the option in the contract to build
two more subm
arines.17
While McLachlan became a supporter of the new submarines,
during 1997 he was increasingly uneasy about the problems fac-
ing the project. Peter Jennings, his chief of staff, recalls that
McLachlan’s concerns were initially prompted by the navy’s
request for approval to refit two Oberons to keep them in service
until the new submarines finally arrived, and then his attention
was galvanised by the increasingly critical media coverage of the
project. By the end of 1997 he was looking for suggestions ‘to
bring the project to finality’.18
Before 1993 there was little interest in the submarine project at
the higher levels of the navy. Under Oscar Hughes the project was
like a medieval city state with nominal loyalty to its titular suzerain
but in fact operating independently and rejecting any interfer-
ence. Following Hughes’ retirement the navy moved to reduce
the project’s independence by downgrading the project director’s
position from two-star to one-star rank, but it took several years
before the navy began to accept any responsibility for the project
and longer still before it began to understand what was involved
in being the parent navy for the new submarines.
Rod Taylor, who was chief of the naval staff from 1994 to
1997, began to be concerned about the state of the project and
the suitability of the submarines for naval service. He was cau-
tious and conservative and concerned that there might be a royal
commission if things went wrong, so he began to document care-
fully the unfolding situation with the project, and set down the
major issues in papers that were considered by all the main defence
committees.19
However, the concerns in navy and defence at this stage appear
strangely academic, with no sense of ownership of the project, no
enthusiasm or excitement and no understanding of the magnitude
of the challenges that ASC and the project team faced. The Aus-
tralian navy and the Defence Department seem to have regarded
the submarines as if they were a standard product ordered from
a foreign shipyard. It only gradually dawned on them that ulti-
mately they were responsible for the submarines. If they did not
work as the navy wanted, then the navy must lead the way in
fixing them.
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