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Australian Submarines: Tender Will Not be Open

By MarEx 2014-12-01 19:19:00

Australia will not hold an open tender to replace its ageing Collins-class submarines, government officials said on Tuesday, a decision that bolsters Japan's position as the likely builder of the new multibillion-dollar fleet.

Reuters reported in September that Australia was leaning towards buying as many as 12 off-the-shelf stealth submarines from Japan despite fierce domestic opposition to buying the vessels abroad instead of building them at home.

Australia did not have time for an open bidding process, Treasurer Joe Hockey said in an interview with the Australian Broadcasting Corporation.

"We need to make decisions now and we don't have time to go through a speculation process. We do not have time for people to suggest that they can build something that hasn't been built," he said.

"No, we don't have time for that because Labor failed to make decisions," he said, referring to the previous government, now in opposition.

A spokesman for Defence Minister David Johnston said no manufacturer had yet been chosen, but confirmed that an open tender was off the table.

Prime Minister Tony Abbott had previously pledged the submarines would be built in the state of South Australia, where unemployment exceeds the national average, but his government began back-pedalling in July, signalling cost and schedule were paramount. Since then, pressure has mounted on Abbott from regional officials, labour unions and members of his own party to have a competitive tender.

Sources have said Australia is strongly considering a replacement for the Collins based on the 4,000-tonne Soryu-class ships built by Japan's Mitsubishi Heavy Industries and Kawasaki Heavy Industries.

Such a deal would mark Japan's re-entry into the global arms market, just months after Prime Minister Shinzo Abe ended a ban on weapons exports as part of his efforts to steer Japan away from decades of pacifism.

But strong interest from European manufacturers willing to build submarines in Australia had recently emerged.

Swedish defence firm Saab, France's state-controlled naval contractor DCNS and Germany's ThyssenKrupp Marine Systems have all expressed interest.

Last week Johnston apologised after saying he would not trust government-owned submarine firm ASC "to build a canoe", comments that fuelled expectations that most work on the A$40 billion ($33.96 billion) programme would go offshore. 

Copyright Reuters 2014.