BAE System's Sale of Dormant Australian Naval Shipyard Raises Concerns
The likelihood of a new political debate over Chinese ownership and the sale of key elements of Australian infrastructure is growing as opponents cite the proposed sale of a former shipyard site to a real estate management company in part owned by a Hong Kong-based company. The issue of Chinese control has come to the forefront over the past few years as the political debate grew over the Port of Darwin, which was leased to a Chinese company.
News broke in mid-October with the publication Australian Defense Magazine first reporting that BAE Systems had confirmed the sale process of the Williamstown naval shipyard near the Port of Melbourne, and the last in Victoria. BAE confirmed to the magazine the sale was in process but declined further details.
A spokesperson for the real estate developer EMKC3 confirmed to the magazine that it had a sale contract. It said future uses for the site were being discussed, but as per the terms of the contract, it would not provide additional comments. EMCK3 is in part owned by a Chinese group of the same name based in Hong Kong.
The Williamstown shipyard is significant because of its location and its long history. There has been shipbuilding in the Williamstown area since the 1850s. The current site was the location of the Victorian Navy before federation in 1901, and shipbuilding commenced at the current site in 1913.
Reports highlight that the yard was the builder of the ANZAC class frigates operated by the Australian and New Zealand Navy. It also contributed blocks and internal outfitting for HMAS Canberra and HMAS Adelaide, Australia’s current ship-landing helicopter docks (LHD) and, in the case of Canberra, the Fleet Flagship of the Royal Australian Navy.
The yard became part of BAE Systems during the acquisition in 1987 of Tenix Defence, which was one of the largest defense contracts in Australia. The yard, however, lost out on newer contracts, and after the delivery of the landing helicopter docks, BAE began to wind down the operation. The yard, which just a few years earlier had employed 1,000 or more people, was closed by 2017.
Reports indicated that BAE had put the 17-hectare site up for sale in 2024 with an estimated value of A$200 million. Australian Defense Magazine believes EMCK3 has agreed to pay “considerably less.”
The state passes legislation requiring the site to remain used for marine engineering and industrial purposes. Near the entrance to the Port of Melbourne and only a few miles from the container port, it is a prime location next to a marina and oil storage facility. Critics of the sale point out it is one of only a few yards in Australia capable of building large naval ships.
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Reports say it is unlikely the buyer would be seeking to use it for residential or other purposes. However, the issues of foreign control have already begun to be mentioned. The sale and future use of the site will require approval both at the Commonwealth and State levels.
Concerns over Chinese control emerged after Landbridge was given a 99-year lease on the Port of Darwin. The current Prime Minister, Anthony Albanese, has repeatedly raised the discussion of bringing the port back under Australian control. Chinese officials have objected, and the company has said it would pursue legal claims for breach of the contract for the Port of Darwin. It points out its investments and efforts to turn around the port, while opponents claim it has failed to meet its obligations.
