Defence has admitted the Collins submarines are again a major concern, with the most recent mishap requiring a vessel to limp home after a catastrophic engine breakdown.
Head of the Defence Materiel Organisation (DMO) Dr Stephen Gumley said the Collins submarines had now gone to the top of the list of troublesome projects - a position once occupied by the now cancelled Seasprite helicopter project.
Once labelled "dud subs" after a series of problems, the Collins had undergone a protracted remediation program over the past decade which seemed to have overcome all defects.
Following the recent engine breakdown, just one submarine is currently available for operations.
"I am very concerned about the Collins class," Dr Gumley told a Senate estimates committee hearing on Wednesday.
"We have got to give, as the supplier to the chief of navy, a lot more available sea days than he is achieving and we have got to increase the availability and reliability of the class."
Navy head Rear Admiral Russ Crane said the navy had managed to turn the corner in tackling long-running problems in recruiting and retaining submariners.
The number of qualified submariners has increased by 23 with another 119 in the training pipeline.
"What I need now are submarines at sea," he said.
In the latest incident, one of the Collins submarines lost two of its three diesel engines in a catastrophic failure while crossing the great Australian Bight to participate in an exercise off the East Coast.
That occurred because of bearing failure and happened while the vessel was snorkelling submerged at periscope depth.
The navy said there was no risk to crew and the captain judged it safe to return to port with one available diesel engine.
The incident happened shortly after engine maintenance at the Australian Submarine Corporation (ASC) facility at Osborne, South Australia, and Defence and ASC are investigating.
Dr Gumley said it appeared an engine bearing change may have been performed incorrectly.
This has highlighted that the navy has never been wholly happy with the Swedish Hedemora marine diesel engines fitted to the Collins submarines.
Rear Admiral Boyd Robinson, head of the DMO maritime systems division, said there were generic issues in these engines which Defence had worked to improve.
"It has been suggested there are better engines around," he said.
"But replacing engines in the submarines is a major undertaking and costly.
"The answer is: we are not giving serious thought to it at this stage as there is no evidence that it is seriously required."
Defence Minister John Faulkner said submarine fleet availability was far from satisfactory and urgent steps had been taken to lift numbers.
"There is no question that submarine platform availability remains a major concern," he said.
Senator Faulkner said significant organisational changes were being implemented, including increased DMO management oversight and improved logistical support to operational submarines and those in long-term maintenance.
Senior navy personnel will be deployed to Adelaide to work with the DMO and ASC.
Senator Faulkner said submarine availability was far from ideal but proper maintenance and repair remained vital.
"The safety of the men and women serving aboard them is a paramount consideration, making it unacceptable, absolutely unacceptable, to take any risks that would put them in unnecessary danger," he said.
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