05/11/2015 - 15:48

Austal floats naval capability

05/11/2015 - 15:48

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The Australian Submarine Corporation should be privatised, while Australian workers have the capability to produce defence projects locally, Austal chief executive Andrew Bellamy said today.

Austal floats naval capability
The vessel will be destined for the Royal Navy of Oman.

The Australian Submarine Corporation should be privatised, while Australian workers have the capability to produce defence projects locally, Austal chief executive Andrew Bellamy said today.

The comments were made at a tour of Austal’s most recent build, a high-speed support vessel for the Royal Navy of Oman.

Mr Bellamy said Austal, which is Australia’s only listed shipbuilder, had produced more than 250 ships in the past three decades, including roughly 100 for various navies.

He said this, and the fact that a good portion of those ships were exported, demonstrated the ability of Australian companies and the Australian workforce to deliver on defence work.

“I can’t believe that a skilled tradesperson in South Australia is any different than one in Western Australia,” Mr Bellamy said.

“We need to recognise as a country what we can do and what we can’t do … we need to make sure we do the smart things.”

That meant a focus on innovation, he said.

Mr Bellamy pointed to the Rand Report, which had identified problems in the structure of the industry.

That included the situation where the government was both running a defence contractor and attempting to procure contracts.

“I don’t think it’s a reasonable argument to say that the private sector should compete against the government sector,” he said, adding that the government shouldn’t build ships.

It continues the pitch by WA industry to set up a competitive tender process for naval contracts.

Earlier this year, Civmec announced it would create a defence business unit to target similar work, while others are arguing WA should get a slice of the pie.

The latest Austal vessel, at 72 metres long, would be similar to the offshore patrol vessels planned by the Australian government as part of the continuous shipbuilding strategy announced by former prime minister Tony Abbott.

Mr Bellamy said Austal would hope to win a slice of that work, touting the company’s fast delivery on the Omani contract as an example of its ability to deliver multi-vessel work.

The first vessel will be delivered in the first half of 2016.

Austal has also won work on the Australian Border Force’s cape class patrol vessels, and on the US littoral combat vessel fleet.

As recently as last week it secured a $75 million contract with the US navy.

Austal was down 3 cents to $2.25 per share at the close of trade.

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