Australia decides to have its supply ships built overseas – vessels needed urgently says government

Australia’s government is facing criticism for its decision to have two supply ships built in Spain, instead of in an Australian shipyard.

But Defence Minister Marise Payne said the two supply ships were urgently needed – that was the main reason behind the decision to award the contract to the Spanish shipbuilder Navantia. The two ships will be delivered 12-24 months earlier – and at a much cheaper cost – than if the vessels were built in Australia. The Spanish yard will deliver the first vessel in 2019.

The contract, which includes an initial five-year sustainment package, is reported to be slightly over $1 billion. The new vessels will replace HMAS Success and the tanker HMAS Sirius.

The contract stipulates that $130 million be spent on combat and communications equipment supplied by Australian firms, as well as some other systems. The work associated with the five-year sustainment contact will be done in Australia.

The Australian government is arguing that the bulk of future naval shipbuilding is still continuing to be done by Australian yards. But Payne said Australia’s current supply ship, HMAS Success, launched 32 years ago, will reach its end of life in 2021, and needs to be urgently replaced.

The government was concerned that the Australian yards were not in position to work on the ships as they have other major projects for the Australian navy to prepare for. “The $3 billion offshore patrol vessel program, the $35 billion future frigate and the $50 billion future submarine program – all part of our continuous naval shipbuilding strategy – are not programs that I or the Government are going to put at risk by playing around with this particular acquisition,” Payne said.

Opposition politicians have criticized the deal with the Spanish shipyard

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