British defence giant BAE has been awarded the contract for the largest peace-time warship building in Australian naval history.
The mammoth contract is worth $35 billion AUD (£20bn) and has been celebrated as a major win for the British defence industry, as BAE defeated Italian and Spanish rivals for the contract.
BAE will supply nine of its new Type 26 submarine hunters to the Royal Australian Navy in the landmark programme, in what is the world’s biggest naval defence contract in a decade and the first overseas order for the new generation of British-designed frigates.
The Australian Government chose BAE’s 6,900 tonne multi-mission warship over rival designs from Spain’s Navantia and Italy’s Fincantieri in a competitive tender, which is part of a A$200bn spending programme by Australia to upgrade its military hardware.
BAE’s win over Fincantieri’s Fremm-class frigate, a Franco-Italian design, is significant for both the company and for the UK’s plans to revive naval exports. The Fremm-class has been operational for five years while work on the first Type 26 for the Royal Navy only started last year and the ship is not due to enter service until 2027.
The future frigates will become pivotal to defence capabilities in the region against the backdrop of increasing Chinese military activity. With the rapid increase in the number of submarines being deployed in the region, combat vessels with anti-submarine capability are regarded as critical for Australia’s defence needs.
Our Future Frigate Program: National security. Jobs. Innovation. Sovereignty. https://t.co/3ywuIyBqRr
— Malcolm Turnbull (@TurnbullMalcolm) June 29, 2018
After a comprehensive competitive evaluation process, the Australian Government assessed BAE’s global combat ship as having the capability best suited for Australia. Prime Minister Malcom Turnbull said that “(It) will provide our nation with one of the most advanced anti-submarine warships in the world — a maritime combat capability that will underpin our security for decades to come.”
A statement issued yesterday confirmed that construction would take place in South Australia at the Osborne shipping yard and ensure a continuous naval shipbuilding industry until at least 2042.
The decision to go with BAE was reportedly based on an assessment from the Australian Department of Defence that said that the global combat ship was “by far and away” the most capable and lethal ship of the three. The British Royal Navy is expected to have ships in service several years ahead of the first Australian ship being delivered.
This £20bn ‘deal of the decade’ demonstrates how British defence plays a huge role in creating jobs and prosperity and is Global Britain in action. Great to see our military and industrial links strengthen with #Australia https://t.co/BCvFSf5zHJ
— Gavin Williamson MP (@GavinWilliamson) June 28, 2018
The Australian Department of Defence has apparently said that the British bid had an “added bonus” of being delivered by one of Australia’s closest strategic and political allies and a partner in the “five-eyes” intelligence network that also includes the US, Canada and New Zealand.
The choice of the Type 26 will ensure interoperability between the UK and Australian navies. The Defence Secretary, Gavin Williamson, said the award was a “formidable success for Britain . . . This is the dawn of a new era in the relationship between Australia and Great Britain, forging new ties in defence and industry in a major boost as we leave the European Union.”