Handling of Australian Icebreaker Replacement Questioned

By Sandy Galbraith

An Australian member of parliament has warned that the Federal Government’s handling of the tender to replace its 1989-built Antarctic icebreaker, Aurora Australis, was flawed and that it should go back to the drawing board.

The contract to replace the ageing Aurora Australis, which operates on behalf of the Australian Antarctic Division, is worth hundreds of millions of dollars.

Hobart independent member of parliament (MP) Andrew Wilkie told the ABC News that Australia’s next Antarctic icebreaker could be a “dud” if the sole bidder, DMS Maritime, the marine arm of multinational Serco, wins the contract to build it.

“The fact that only one company is prepared to pursue this contract does show that the request for tender and the tender process is flawed,” Wilkie told the ABC. “There is the risk we will end up with a dud. The Commonwealth should start the process again.”

DMS Maritime currently provides maintenance and procurement services to the Australian Navy, Border Force and fisheries, and says it remains “a committed partner” of the Australian Government.

However, last month Sydney’s Daily Telegraph newspaper reported that the Defence Department was set to “tear up” its patrol boat maintenance contract with DMS Maritime “due to alleged underperformance.”

Wilkie raised questions about DMS Maritime’s suitability to build the new icebreaker.

“It’s a company that has question marks over it because of the way it has been associated with the Navy’s Armidale-class patrol boat project,” he said.

Opposition Leader Bill Shorten used a trip to Tasmania on Wednesday to criticize the icebreaker replacement tender process, although he stopped short of supporting Wilkie’s call for a fresh start.

“It doesn’t sound like a competitive process when there’s only one bidder,” he said.

The current manager of the Aurora Australis, P&O Maritime, had been interested in constructing the vessel but pulled out in January, labelling it “unusual” and telling the ABC the way it was being handled would lead to “very large complications.”

Environment Minister Greg Hunt said in a statement the Government was committed to a “comprehensive evaluation process” to determine whether Serco’s bid represented value for money.

“With one bidder remaining, the evaluation is highly focused on determining if the tendered bid provides the best outcome for the Australian Antarctic program,” Hunt’s spokesman said.

The Australian Antarctic Division, which will operate the new icebreaker, said in a statement a decision on the ship would be made “in the last quarter of 2015.”

Sandy Galbraith is Director of Maritime Trade Intelligence.