COLUMN | Building locally – hearts or heads? [Grey Power]

RFA Tideforce, a Royal Fleet Auxiliary replenishment tanker (Photo: UK Ministry of Defence)

It is an argument that has reverberated around both the UK (where this is being written) and Australia. It is one that sets ideas of national self-sufficiency against the need for the taxpayer’s money to be spent wisely. And in our maritime world, it seems to give rise to very strong feelings, notably when grey-painted ships are needed by governments.

As regards actual ships with guns and missiles aboard them, there is less of an argument, just as long as a country has the capability of constructing warships in its shipyards. A self-respecting nation, it might be suggested, ought to have the capability of defending itself and it is a bold government that will argue for major warships to be built abroad, if that means local shipyards will be denied work and end up in trouble. If the country’s shipbuilding capabilities do not permit this, then there is no choice other than ordering from somewhere with such capability. It is why you have defence export markets.

But what about naval auxiliaries, which are basically merchant ships painted grey with a lot of defence-related gear aboard? Or other vessels that are run by agencies supported by governments which means that taxpayers are inextricably involved? Should these ships be put out to worldwide tender and ordered from wherever the best deal is to be found? Or should the strategic needs of the country, in terms of the maintenance of a capable maritime design and construction sector, be weighed into the decision making?

And in the event that the contracts are restricted to local designers and builders, isn’t this just economic nationalism – a form of unashamed protectionism, which ought to be deplored?

None of these questions lend themselves to easy answers, with the people who have to make these decisions battered to and fro by public opinion, political lobbying, and the current needs of the nation for local employment and the maintenance of a struggling sector. You can see all of these concerns reverberating around the UK, as its government considers the requirement for a new generation of Royal Fleet Auxiliary solid support ships, needed, among other duties, to maintain support for the RN’s two aircraft carriers once they are fully up and running.

With the UK exiting from the European Union, which previously required such vessels to be put out to international tender, the decision as to where these ships are to be built has become one for Westminster alone. The RFA has recently taken delivery of a series of South Korean-built oilers for the fleet and there is no doubt that there are suitable designs available in both Europe and elsewhere.

A “hybrid” solution, in which the hulls of the ships are built in some yard accustomed to merchant ship building, with the vessels fitted out in the UK, has been suggested by some as a means of lowering costs. After all, merchant vessels of this size have not been constructed in any British shipyard for many years.

The “interim” Canadian solution, in which the national need for an auxiliary ship in a hurry was solved by converting a low-mileage containership, also attracted attention, encouraged by the sheer number of medium-sized container ships available on the market at bargain prices.

But the pressure to build the ships in the UK remains high, perhaps increasingly so since the economic consequences of the pandemic became more obvious. The amount of employment generated in such a “shovel-ready” enterprise would be substantial. But can they be constructed in a country which effectively shut the door on non-warship construction several decades ago?

To answer these doubts, it might be pointed out that exactly the same apprehensions were voiced over the construction of the two aircraft carriers, by far the biggest and most sophisticated ships even contemplated for the RN. Modular construction and clever logistics made the building of these huge ships possible and it has been suggested that exactly the same principle could be repeated for the RFAs, spreading the benison of employment around the country, with distinct practical and political advantages.

But isn’t this just doing the taxpayer a disservice in the long run, if it is possible to get the ships faster and cheaper from some overseas shipbuilder? It is worth pointing out that ship construction on the far side of the world is not always as smooth a process as it is sometimes claimed, with language, communications, and time differences all being handicaps that need to be surmounted for the length of the contract. It is also notable that any contract involving the MoD will see constant changes to the specifications throughout the build, so that to actually construct the ships domestically might offer advantages that actually can translate into cost savings.

But at the end of the day, in such cases, there will be an inevitable conflict between heart and head, politics and economics. It is always difficult to pick the winner in such a contest, and this will be no exception.

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Michael Grey

Maritime industry legend, and former long-term editor of Lloyds List, Michael Grey kicks off each month with topical issues affecting the maritime world at large.