WA industries miss bulk of defence spending rise

THE lion’s share of the $23.5 billion the Federal Government is spending on defence over the next 10 years will miss WA completely because the State does not have industries to capitalise on it.

The defence budget expansion, outlined in the Government’s Defence White Paper, will be spent on new ships; upgrading and modernising aircraft, ships and vehicles; and improving communications, command and control and information systems.

Only $2.1 billion will be spent to update the navy’s fleet – the most significant defence sector for WA’s defence contractors – and most of this will be spent on areas WA cannot supply.

WA’s best chance to get amongst the money lies with a $150 million to $200 million contract to build new patrol boats to replace the elderly Fremantle class vessels.

WA has four shipbuilders – Austal Ships, Wavemaster, Geraldton Boat Builders and Tenix – capable of undertaking the contract.

Austal recently built eight patrol boats for the Australian Customs Service.

Tenix built the 22 Pacific Patrol Boats given to Australia’s Pacific Ocean neighbours at its Henderson facilities. It has the only 8,000 tonne shiplift facility in the State.

Both Geraldton Boat Builders and Wavemaster are building names for themselves in defence and coastal patrol overseas.

But there are several eastern states shipbuilders that will also be vying for the contract.

Tenix communications manager Liam Bathgate said the Defence White Paper offered a couple of things for WA.

“It gives the green light for the Fremantle Class replacements. If we win that contract we’ll be looking to do the bulk of the work at our Henderson operation,” he said.

“It is also likely half of the beefed up surface fleet will be based on one side of the continent and half on the other.”

Whether that means an expansion for the WA naval base HMAS Stirling is unclear. The White Paper emphasises keeping Australia’s maritime routes open and being able to go rapidly to the aid of Australia’s Asia-Pacific neighbours.

Some industry sources believe an expansion of Darwin would meet this need better than Stirling.

However, others suggest Stirling, already Australia’s largest naval base, will be increased further. It is already the homeport of Australia’s new Anzac class frigates and will be home to some of the Collins class submarines as they come into service.

Expanding Stirling will give a positive boost to the marine facility the WA Government is building at Jervoise Bay.

There is a feeling within some aspects of the defence industry that Australia’s west coast will become more important.

Clough Engineering manager of communications Peter Colins said the White Paper meant the Government was decentralising the defence industries.

“It is likely there will be more vessels ported in WA,” Mr Colins said.

“That will effect the support industries down there and we could get involved in that.

“I think some of the heavy hitters in the defence world such as Boeing and Raytheon could come here.”

Austal Ships managing director Bob McKinnon said besides the patrol boat contract, Austal is interested in selling some of its fast catamaran ferries to the Navy.

The White Paper calls for the capability to move troops to regional hotspots quickly.

When the Australian Army was mobilising to move into East Timor, it found it could not move troops there quickly.

It ended up hiring a catamaran ferry from Tasmanian-based ship builder Incat and renaming it HMAS Jervis Bay.

Ironically, Austal helped Incat win the deal.

Jervis Bay had been built two years earlier for a Malaysian contract both companies were competing for and Austal ultimately won.

When the call went out for the troop carrier, Incat had the ship waiting by the wharf.

The fact Incat already supplied a ship to the Navy could mean it has the inside running for any fast ferry orders.

However, Mr McKinnon believes Austal has a good chance of securing the contract.

“Defence is not going to go with any one ship builder and we have a good reputation in the industry,” he said.

There had been fears Tenix’s bid for the Australian Submarine Corporation would remove its operations from Henderson but this is not to be the case.

Mr Bathgate said the company would keep its Henderson and Williamstown operations going and also operate the South Australian Osborne facility that built the Collins class submarines.

Mr Bathgate said the White Paper gave companies in the defence industry some certainty they could base their forward plans around.

This could give WA companies the confidence to expand their operations to get a share of the extra money the Government is spending.

Other WA companies that could do well from the increased defence spending include Corrocoat Engineers, Forward Defence, Nautronix, Quality Piping, Veem Engineering and Vigil Antislilp.

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