29/06/2018 - 15:13

SA wins $35bn frigate contract, WA gets $670m

29/06/2018 - 15:13

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The federal government has today announced its $35 billion frigate project will be built in Adelaide, with local shipbuilder Austal missing out on the main contract.

SA wins $35bn frigate contract, WA gets $670m
BAE Systems will build Australia’s fleet of nine new anti-submarine frigates. Photo: BAE

The federal government has today announced its $35 billion frigate project will be built in Adelaide, with local shipbuilder Austal missing out on the main contract.

The consolation prize for Western Australia is a $670 million upgrade to HMAS Stirling naval base on Garden Island, which is set to become the new home to a defence training centre.

The big news was that British shipbuilder BAE Systems has been named preferred contractor for Australia’s fleet of nine new anti-submarine frigates.

The new ships will be built by ASC Shipbuilding in Adelaide, with the project to create 1,500 direct jobs in Adelaide and an estimated 2,500 in the supply chain around Australia.

BAE Systems Australia expects the Australian industry content for the project will be 65-70 per cent, and has prequalified some 500 Australian businesses in the supply chain, including about 80 in WA.

The Hunter class will begin entering service in the late 2020s replacing the eight Anzac Frigates, which have been in service since 1996.

In announcing ASC as the shipbuilder, Austal has been effectively ruled out of winning any major contracts on the project.

ASC is currently wholly owned by the federal government, but will become a subsidiary of BAE Systems during the build.

This ensures BAE Systems is fully responsible and accountable for the delivery of the frigates and ensures the work will be carried out by Australian workers.

The government will retain a sovereign share in ASC while BAE manages the program.

At the end of the program, the government will resume complete ownership of the shipbuilder.

BAE said it will soon commence negotiations with the Department of Defence on the initial design part of the contract, which is expected to be in place by the year end, with production expected to commence in 2020.

BAE Systems Australia employs 3,500 people across the country, including around 1,000 in South Australia. 

Its WA operations include work to sustain and upgrade the ANZAC Class frigates, which will be replaced by the new frigates.

Meanwhile, the $670 million upgrade at HMAS Stirling is part of a planned investment of $1.49 billion at the site.

HMAS Stirling and Henderson will become a training and capability centre, known as Ship Zero, for the new Hunter class warships.

Under the agreement, $670 million will be spent on upgrades at the site, including extending existing wharfs and building a number of new training facilities.

These upgrades to HMAS Stirling are in addition to $300 million worth of upgrades associated the $3 billion offshore patrol vessels project, $150 million of upgrades to support new maritime operational support capability vessels, and a $367 million redevelopment of HMAS Stirling infrastructure. 

The $367 million redevelopment has already resulted in about a dozen businesses winning work, including Duratec Australia, EC&M, BDM Constructions, Built Environs, Shelford Constructions and Honeywell.

 

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