The Politics and DV Engineering working group analyses current political developments in the defence sector. It provides independent facts and interpretation from the technological knowledge and experience of engineers.
The Politics and DV Engineering Working Group has the following questions and comments on the DMP-A for the replacement of auxiliary vessels for CZSK, published by the Secretary of State for Defence on 7 May 2020. The comments have been prepared based on publicly available information and defence technology knowledge and experience.
This project concerns the realisation of replacement capacity for 10 large Royal Navy auxiliary vessels:
- the naval training vessel Van Kinsbergen;
- the torpedo launch and support ship for submarines Zr. Ms. Mercuur;
- two hydrographic survey vessels: Zr. Ms. Luymes and Snellius;
- the transport and support ship in the Caribbean: Zr. Ms. Pelikaan;
- four Cerberus class diving vessels: Cerberus, Argus, Nautilus and Hydra;
- the diving training vessel Soemba.
In the DMP-A, the Secretary of State announces her intention to combine the replacement of these 10 vessels into one large project with a 10-15-year duration.
Technical implications bundling five projects
Combining the replacement of 10 ships with different support tasks into one large project can make a lot of sense in terms of standardisation and family formation. However, technological standards and insights can change significantly over such a long period, especially with regard to electronic systems and energy transition. It is therefore important that adjustments to technology remain possible.
Economies of scale in shipbuilding limited
Experience in shipbuilding shows that economic economies of scale are hardly an issue for unique ships and small series. It is common in shipbuilding, that almost all ships are different. Of course, certain parts and modules can be reused.
National security and European application of TFEU Art. 346 in procurement
The A letter states that the auxiliary vessels, with their specific tasks, contribute to the 'staying safe' of our Kingdom and to the 'safe linking' of the Netherlands' supply and discharge lines. In other words, they contribute to national security. What matters for the procurement strategy is whether other European Union countries use TFEU Art 346 for these types of vessels and only procure them nationally.
Long service life vs short cyclic replacement
It is indicated that these ships will have a service life of 30 years after delivery. However, in 30-40 years (in 2060!) the technology of these ships will be significantly outdated. Especially electronic systems and power supply. They become less serviceable during their lifetime and bring little or nothing when sold. Halfway through their planned lifetime, the second-hand value of ships built in our country is excellent. It therefore seems more effective to replace these vessels short-cycle (after 15 years).
Acquisition strategy - "Commercial off the shelf"
The letter states that the starting point is "Commercial off the shelf unless". However, there is no existing market of off-the-shelf products for this type of vessel. Each of the five categories is unique or involves a very small series. Each with unique auxiliary equipment. Of course, it is possible to standardise on components and systems. However, a lot will technically change in that too over the next 15 years. Especially in the field of energy transition, electronic and ICT systems. All the more reason to think about short-cycle replacement.
Energy transition: standard of 2022, 2030 or 2050?
This paragraph of the letter refers to the policy of reducing fossil fuel dependence by 20% by 2030 and 70% by 2050 compared to 2010. However, it does not specify exactly which of these standards ships will meet. Due to rapid technological developments, it does not seem effective to set the standard already when the first ship is built.
Pre-financing or paying during use
As currently designed, the investment costs of these ships will already weigh on the defence budget in the short term. The corona crisis may make this difficult. In the alternative financing concept, the investment costs are paid only after the ships are delivered. Possibly, the total budget burden is even lower in that concept. The Belhaj no 35300 X 10 motion of 30 Oct 2019 is still pending on this. Short-cycle replacement is also one of the aspects of the concept of alternative - or innovative - financing.
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The Hague, 17 May 2020
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Disclaimer: The facts and opinions given are based on open sources and on the knowledge and experience of working group members.
As part of the professional association KIVI, the working group is independent of political parties, governments and companies.
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