Australian Industry will Get 60% of Future Submarine Work

28 Februari 2020

Naval Group is committed to a level of Australian industry capability of at least 60 per cent of the contract value ($50 billion) spent in Australia (image : ASC)

French Naval Group says Australian contractors will get more than half of future submarine fleet work

The French company chosen to build the $50 billion future submarine fleet has committed to giving Australian contractors more than half of the work.

On Monday, Naval Group told a Senate committee looking into Australia's shipbuilding capability the entire 12-boat fleet would be built here.

It was grilled by senators on how much work would be available for the country it was building the submarines for.

The company had previously suggested some local companies may not be skilled enough to take part in the lucrative project.

But Naval Group's executive vice-president Jean-Michel Billig made assurances Australian industry would not miss out.

"Here we commit to a level of Australian industry capability which will have the effect of at least 60 per cent of the Naval Group contract value spent in Australia," Jean-Michel Billig said.

The company told the committee it would work to give Australia an even bigger cut of the contract than 60 per cent.

But Centre Alliance senator Rex Patrick was sceptical of the promise.

"This is fantastic marketing stuff [but] I'm concerned that this document is a bit of a fraud," he said.

"There are so many things being promised in here that appear not to be executed."

At the moment, less than 10 per cent of the total work force is in Australia, with design work underway in France.

The ABC revealed earlier this year the Department of Defence was considering walking away from the deal with Naval Group over bitter negotiations and questions about whether the money spent so far had been "fully effective".

But Naval Group committed to formalising its 60 per cent commitment to Australian companies and workers with the Federal Government within the next two years.

The fleet is not expected to be complete until about 2053.

But the Department of Defence's general manager of submarines, Gregory Sammut, told the inquiry Australian companies would get the opportunity to bid for sub-contracts.

"From the mid-2020s we can expect to have contracts in place with Australian industry with the supply of equipment into the yard to be delivered at the right phase and right time such that we can start incorporating that equipment into the boat," he said.

(ABC)