2016 Apr 19

Australia Accelerates Naval Shipbuilding Program

Australia will speed up plans to build more naval vessels in domestic shipyards, Prime Minister Malcolm Turnbull said this week, making an announcement that could find favor with voters just weeks ahead of a likely federal election.

Naval shipbuilding is a key part of a plan unveiled in February to boost defense spending by nearly A$30 billion ($23.02 billion) over the next 10 years.

To speed up the plan, the construction of 12 offshore patrol vessels, worth A$3 billion ($2.30 billion) would now start in 2018, Turnbull said, though the government has still to award the contract.

"Putting our navy in the right situation to keep us safe and putting our naval ship building industry in the right place to build the ships we need for the future is a great national endeavor," Turnbull told reporters.

"It will directly secure more than 2,500 jobs for decades to come."

Construction of the offshore patrol vessels will start in Adelaide, the state capital of South Australia, and be completed in Western Australia.

“This is not a series of projects,” said Australia’s Chief of the Navy Vice Admiral Tim Barrett. “This is about the programmatic effects of building a ship building industry within Australia that will enable the future of navy to be given great certainty. It is a requirement to build an industry that will allow us to look at future projects that can be designed and developed within Australia, to be able to continuously build, evolve our ships and to permanently provide that capability to government. So this is more than just a series of projects, this is a programmatic view on a capability that is indeed a national endeavor.”

Opinion polls show ebbing support for Turnbull's Liberal Party, ahead of an election likely to be held on July 2, and South Australia could be a key battleground state.

Three private companies - Dutch based Damen Shipyards, German firms Fassmer and Lürssen - have been shortlisted to build the offshore patrol vessels, Turnbull said.

The timetable for other vessels was unaltered, but Turnbull said it would entail more work for Adelaide's shipyards.

BAE Systems, Fincantieri and Navantia have been shortlisted as preferred bidders for the construction of nine frigates that will be built in Adelaide, he said.

The orders are expected to be worth more than A$35 billion.

The prime minister said Austal Ships Pty Ltd was selected as the preferred bidder for a contract to construct and maintain up to 21 Pacific patrol boats. The boats would be built in Western Australia and the project was valued at around A$500 million, he added.

The patrol boats will now be built from steel rather than aluminium. “That was a decision made early on for reasons of their ongoing maintenance, through life,” said Barrett. “It’s a balance between what was also available in the market and what could be put on offer, so there are a number of reasons why aluminium, in this case, was replaced by steel.”

Austal plans to construct the Pacific Patrol Boats in its shipyard in Henderson, Western Australia, with through-life support to be performed at Austal’s existing facility in Cairns, Queensland. The vessels will replace the existing Pacific Patrol Boat fleet, which is approaching the end of its service life, and will assist Pacific Island countries to continue to take an active part in securing their own extensive Exclusive Economic Zones. Austal has delivered Australia’s entire border patrol capability – comprising 30 vessels delivered over the past 17 years.

While announcing details of Australia's naval shipping plans, Turnbull refused to comment on questions regarding a proposed A$50 billion contract to buy 12 submarines.

Japan's Mitsubishi Heavy Industries, French state-owned builder DCNS Germany's ThyssenKrupp are vying for the contract.


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