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Adelaide to win submarine deal

Last updated on 7 April 2016

submarinesThe Australian government is set to announce the establishment of an expanded shipbuilding industry in the South Australian capital of Adelaide creating thousands of new jobs, and introducing new technologies not previously seen in the country’s yards.

In a keynote speech on April 7 defence minister Marise Payne said  reform of Australia’s shipbuilding industry, the implementation a’ continuous build strategy’, is one of the most significant of all the challenges in the delivery of the 2016Defence White Paper.”It will be the largest recapitalisation of the Navy since World War II”, she said.

The federal Cabinet will meet shortly to decide whether to award a $50 billion + contract to build a 12-strong submarine fleet to a Japanese group headed by the Mitsubishi Group or the German marine industrial group, Thiess-Krupp. A French group has also not yet been ruled out, but is not the favourite.

The Japanese bid is strongly supported by the Pentagon in the United States as part of a strategy to balance rising Chinese military power in the Asia Pacific region . US defence  experts are keen to strengthen its pivot to Asia and alliances with Australia and other countries in South East Asia as well as Japan, a concept in doubt were Donald Trump to get to the White House.

The Germans, by contrast, offer a more attractive benefit to politically sensitive South Australia, pledging to build a hi-tech industrial centre, making Adelaide an industrial hub for the company’s regional operations.

The Cabinet will have before it the conclusions of the competitive evaluation process conducted by defence, military and financial experts, but it is already clear that former prime minister Tony Abbott’s plan to buy Soryu-class submarines off the shelf from Japan has been abandoned. The evaluation process moved on from considering the merits of existing vessels built by France, Germany and Japan, to substantially modified designs, all to be built in Adelaide.

The national security committee of Cabinet will be the inner-group of ministers who make the call, and it will be a difficult decision, given this will be the biggest defence contract in Australian history. The decision is made all the more difficult by the multimillion dollar lobbying campaign conducted by the bidders, and their governments.

In her speech Ms