$35 Billion Warship Announcement Delayed

25 Juni 2018

BAE Systems Type 26 frigates favoured to win (image : save the royal navy)

$35 billion warship announcement delayed as Cabinet grapples with final project details

A long-awaited announcement on who will build the Navy's next fleet of anti-submarine warships has been delayed as Cabinet debates whether to include a Western Australia-based company in the $35 billion project.

Three foreign defence companies have been shortlisted to design and build Australia's Future Frigates, which are expected to start replacing the ageing Anzac-class warships from the late 2020s.

UK firm BAE Systems is widely favoured to win the lucrative SEA5000 project with its high-tech "Type 26" frigate offering, but is competing against Fincantieri of Italy with its FREMM, and Navantia of Spain with an updated F100.

There is also growing industry speculation that if BAE Systems secures the $35-billion contract Australia would be likely to sign one of the first Free Trade Agreements with the UK after Brexit, and could soon begin to export Bushmaster vehicles to the British Army.

Defence insiders say a Future Frigates announcement was scheduled to be made last week, but a late push to allow West Australian-based shipbuilder Austal to be part of the build has complicated the process.

Last month Austal was cut out from a $3 billion project to construct the Navy's new Offshore Patrol Vessels (OPV) after negotiations with the winning German designer Luerssen broke down.

The ABC has been told following Austal's exclusion from the OPV build, West Australian members of Cabinet are particularly keen for the shipbuilder to play a role in the construction of the nine Future Frigates, which will all be assembled in Adelaide.

Defence Industry Minister Christopher Pyne would not be drawn on whether a role for Austal was being considered, but hinted a final decision on the Frigates project could still be a few weeks away.

"The Government has said that we will make an announcement about the successful tenderer in mid this year which is June and July," Mr Pyne said.

"We will definitely do that.

Foreign Minister Julie Bishop, the most senior West Australian figure in Cabinet, said it would be inappropriate to comment on "an issue that is pursuant to a tender" but added "we certainly support the WA shipbuilding industry, we support Austal ships and we want to see more jobs in shipbuilding across Australia".

However, the deputy Liberal leader declined to say if she had made any specific representations to her Cabinet colleagues for Austal to be included in the Future Frigates program.

"We continually make representations as West Australian Liberal members and senators to support West Australian business and more jobs in Western Australia, and we're delighted that the Federal Government has rolled out such a significant shipbuilding program across Australia and that there will be many more jobs in shipbuilding as a result of the Turnbull Government's policies," she said.

The ABC asked Austal whether it was also lobbying the Federal Government to be allowed to take part in the construction of the new frigates, but the company declined to comment.

(ABC)