Ships, in particular service vessels, need to reduce fuel consumption, emissions and cavitation noise while maintaining manoeuvrability and preventing engine overloading. Diesel mechanical propulsion with controllable pitch propellers can provide high fuel efficiency with good manoeuvrability. However, the conventional control strategy with fixed combinator curves limits control freedom in trading-off performance characteristics. In order to evaluate performance of current state-of-the-art and future alternative propulsion systems and their control, a validated propulsion system model is required. To this end, this paper proposes a propulsion model with a Mean Value First Principle (MVFP) diesel engine model that can be parameterised with publicly available manufacturer data and further calibrated with obligatory FAT measurements. The model uses a novel approach to predict turbocharger performance based on Zinner blowdown, the Buchi power and flow balance and the elliptic law for turbines, and does not require detailed information such as compressor and turbine maps. This model predicts system performance within 5% of actual measurements during Factory Acceptance Tests (FAT) of the diesel engines and Sea Acceptance Tests (SAT) of a case study navy ship. Moreover, this paper proposes measures of performance that objectively quantify the fuel consumption, acceleration rate, engine thermal loading and propeller cavitation during trial, design and off-design conditions in specified benchmark manoeuvres, within an hour simulation time. In our experiments, we find that, depending on the control strategy, up to 30% of fuel can be saved, thermal engine loading can be reduced by 90 K, and acceleration time by 50% for a case study Holland class patrol vessel.