Submarine program: Japan, France, Germany to compete for build process; Government promises hundreds of local jobs

Updated

Japan, France and Germany will compete to build Australia's next submarines as the Federal Government continues its search for a potential partner, the Defence Minister says.

Kevin Andrews said the Defence Department would seek proposals from potential partners looking at options to either design and build overseas, in Australia or a hybrid approach through a "competitive evaluation process".

But there were no guarantees the submarines would be built or designed in Australia.

Mr Andrews ruled out Swedish defence company Saab, which has a presence in Adelaide and had expressed an interest in building the vessels in South Australia.

But the Minister said he expected significant work would be undertaken in Australia, particularly during the build phase leading to the creation of at least 500 new, high-skilled jobs.

He said many of the 500 jobs would be in South Australia and would focus on significant works ranging from combat-system integration to land-based testing.

"The Government expects that significant work will be undertaken in Australia as part of the build phase of the future submarine including, but not necessarily limited to, combat-system integration, design assurance and land-based testing," Mr Andrews said.

"This will result in the creation of at least 500 new, high-skilled jobs in Australia for the life of the program, the majority of which will be in South Australia.

"So this is good news for Australian industry, it is good news for the Australian economy, it is particularly good news for Australian jobs and can I say to anybody in South Australia who may be listening or watching, this is particularly good news for South Australia."

The Future Submarine Program is the largest Defence procurement program in Australia's history and represents an investment in the order of $50 billion, the Government said.

South Australian Premier Jay Weatherill said he believed the Government wanted the submarines built in Japan.

He said he was disappointed Sweden had been ruled out of the "competitive evaluation process".

"It tells you all you need to know about the process," Mr Weatherill said.

"Sweden say they can build submarines for the right price, on time, here in South Australia, and they get ruled out of the process."

Australia has better chance to build if Germany or France selected

Chris Burns, from SA's Defence Teaming Centre, believed there was a better chance the submarines would be built in Australia if companies in Germany or France were selected to build them.

He said the European countries already appeared to be more open to building the submarines in Adelaide.

"Certainly Saab, and Germany and France have all indicated they're willing to build their submarines here and that's a positive," he said.

"We've got the capability here we've got the infrastructure and we've got the skills we should be capitalising on that."

Mr Burns said the Defence Department's decision to rule out Saab so early in the process was a mistake.

"I think that's extremely unfortunate so early in the process, to eliminate a company that has a viable industrial capability around submarines and has had such a great relationship with the Australia's shipbuilding industry," he said.

"I think it's just way too early in the process to be eliminating a company like Saab. You've got to give them the opportunity to demonstrate that they have the capability."

Mr Burns said while a promise of 500 new jobs was a positive step, more detail was needed about where the jobs would be coming from and whether they would be "recycled" from elsewhere.

"We're talking about building future submarines here, that's a lot more than 500 new jobs," Mr Burns said.

The competitive evaluation process is expected to take about 10 months.

Number of submarines to be built 'unknown'

Prime Minister Tony Abbott suggested the Government was looking at the prospect of building eight new submarines, four less than initially promised.

Before the election the Government promised to build 12 submarines in Adelaide, but Mr Abbott has now made reference to a lower figure.

"Sustainment alone on the basis of an eight submarine as opposed to a 12 submarine fleet will produce an ongoing 500 additional jobs," Mr Abbott said during a visit to Adelaide on Friday.

South Australia's Defence Industries Minister, Martin Hamilton-Smith, said a change in number amounts to another broken election promise.

"What they were promised prior to the last federal election was 12 submarines built in Australia based in Adelaide, but including shipyards in Victoria in Williamstown and Forjacks in Newcastle," he said.

"What the PM has said today is we could get as few as eight submarines, built overseas.

"There's no guarantee in any of the statements today that any of the work will be done in Australia."

A spokesman for the Defence Minister has since said the final decision on numbers has not been made and will be influenced by the Defence white paper and force structure review.

Topics: federal-government, government-and-politics, defence-and-national-security, defence-forces, defence-industry, adelaide-5000, sa, australia

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