Maritime Forces Review
The way ahead
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Timings and priorities
- The two key issues are the urgency of filling the gap in meeting the civilian agency patrol requirements
around New Zealand and bringing into service a MRV to replace Canterbury when she is retired in
2005. Given the demand and priority accorded by the civilian agencies to the inshore patrol tasks, meeting
these requirements should be pursued ahead of offshore patrol capabilities.
- Planning the entry into service of a MRV on the retirement of Canterbury is sensible for a number
of reasons. First, the MRV is needed to meet the Navy's training requirement for sustaining sufficient
personnel to operate other naval vessels. Second, the tactical sealift requirement of the MRV is part of
the Government's core requirement for a modernized land force that can be deployed to where it is required.
Third, a MRV will be the most capable vessel and have utility across the range of military and civilian
requirements.
Acquisition strategies and industry participation
- The acquisition of vessels will be influenced by:
- the ability to attract alternative financing arrangements;
- the ability to establish flexible operating expense schemes; and
- the potential to provide regional development opportunities in New Zealand.
- The OPV and any new IPVs will be based on civilian standards of design. This means that the ability to
finance the acquisition of these vessels can be more easily arranged through a third party (typically the
ship builder). There is a low risk in ship builders entering into a short-term lease (5-10 years) as there
exists a ready civil market able to also operate the vessels in the event of a lease termination. Both the
Royal Navy and the Royal Australian Navy are currently developing this type of fleet acquisition strategy
in the OPV class of vessel.
- The Royal Australian Navy are also looking at arrangements in which the utilisation of the OPVs is based
entirely on guaranteed access to the capability through a third party who will be responsible for
maintenance, upgrades, etc. In the case of their Fremantle replacement project, the Navy will purchase the
use of the OPVs for a guaranteed period each month. This transfers the risk for fleet management out to the
private sector.
- Finally, there are considerable opportunities for regional development initiatives in the building of
inshore and offshore vessels. Ship builders contacted during the course of the Review indicated a
willingness to build ships in New Zealand.
- The potential for similar arrangements in the acquisition of a MRV is very limited given that these
vessels tend to be military specific with little potential for crossover to the commercial sector.
Next steps
- It is intended that a set of output based statements to meet both the MRV and patrol requirements be
prepared by the MoD, in consultation with the Defence Force and civilian agencies, to identify the
functions that potential vessels must perform and the standards and conditions to which those functions
are required to be performed. It is proposed that these functional statements be provided to industry to
allow for a range of alternative vessel options and acquisition strategies to be developed that can be
acquired within the set financial limitation. Following the identification of feasible options, the MoD
will report back to Government with specific proposals to proceed to acquisition.
- To ensure that there is no loss in training capability within the Navy, a smooth transition from
Canterbury to the MRV will be necessary. The planning process for this replacement will require
a realistic timetable for any build or modification programme.
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