So let us have a look at how I roughly looked at what New Zealand can afford. I will admit this is not the most accurate way to determine what we can afford as there are other things that need to be taken in to account as well. But it does give a rough indication. So if take for example the Dokdo-class amphibious assault ship in 2005 it cost US$ 296 million.
First add this figure to a inflation calculator and we have our first issue of again this is purely an estimate of inflation. But the 2.5% has been the average over 20 years. It has been a lot higher, but also as low as 0.31% and currently sitting about 1.22%, with a prediction of 1.3% for next year. Future inflation rates can not really be predicted easily but we can only workout on an average. and over all 2.5% seems about right.
https://smartasset.com/investing/inflation-calculator
This gives us a value of Estimated $499 USD. We now have to convert to NZD and another problem here is since the conversation is continuously changing we can not predict the rate. However this one while will change it shouldn't change so drastically in the next 5-9 years that it effects the outcome. And even it went as low as it was in the 1980's we it was as low as 50c which the 499 million would still be just under the 1 Billion 998 million dollars NZD and there is still room for movement as it 1 Billion + more
Another thing I have done here is putting into 2029 dollars, however the agreement of cost will be before that as the request for tender is 2024 and introduction into service 2029. So I am guessing in 2025-26 (depending on size of vessel the bigger it is the sooner we need to know) we will get a cost and in that scenario 296 million converts to 450 million and then to NZD 665.53 million.
An example is HMNZS Aotearoa in 2016 with her technology in winterization features, size and capability and even adding in the ice belt, means a higher grade of and thicker steal equates to more cost, of this vessel, she cost $493,000,000 in 2016 dollars. If we now add ten years inflation, and our average rate of 2.5% we get a figure of $627,000,000. But let us say we get lucky for the next 6 years and only have 1.5% inflation. Getting built then would only $592,000,000. Also remember it could go the other way and we get a higher inflation rate meaning we get less for our money and that is we cost cutting happens.
HMNZS Canterbury cost $130,000,000 in 2005 this is a good example as we can get an accurate cost of that to 2020 dollars and that equates to $143,000,000 now add our estimates and in 2026 she would cost $165,000,000. So you can see why I say more than $1,000,000,000 + is very generous and hopefully means the vessel is going to be a very capable addition with a lot fewer cost cuttings and this is why I say 1 Billion + is a lot of money for a LPD and you could get a small LHD like the Singaporean Endurance 170, which is not as large as other LHD's and again built in a Singapore, Korea keeping the costs down etc.
Looking at the Australian Navy procurement of the Canberra Class Amphibious Assault Ships cost at around $1.5 billion AUD each, (around 1.6 billion NZD) the Canberra Class Amphibious Assault Ships had been recently built by Spanish company Navantia in collaboration with British defence contractor BAE Systems-Maritime, using azimuth pods from German manufacturer Siemens. This is vessel is a lot bigger than what we require, at 230m and 27,500t is a lot larger than required, and while the hull was built in Spain it was fitted out in Australia it could have been done a lot cheaper. Saying and meaning that the Endurance 170 (or modified version thereof) at 170m 19,000t, is a lot smaller and would be cheaper, being built in Singapore or South Korea would lower this cost even more. Overall a modified Endurance 170 Class LHD would easily be in the more than 1 billion dollar budget.
