Australia’s Military Shipbuilders Need Overhaul, Defence Minister Says

By Jason Scott

(Bloomberg) — Australia’s army shipbuilding trade wants to chop prices and turn out to be extra productive to win contracts as the federal government seeks to purchase 40 ships and submarines over the subsequent 20 years, Defence Minister Kevin Andrews mentioned.

Australia pays about 40 % extra for domestic-built vessels over U.S. benchmarks as a consequence of inefficiencies within the trade, Andrews instructed a convention in Canberra on Tuesday.

“The industry currently isn’t internationally competitive in terms of productivity and if not changed, it will not be sustainable,” Andrews mentioned. “The only way Australia can continue to have a naval shipbuilding industry is if industry is properly structured to drive efficiencies and improve productivity.”

Australia’s so-called steady construct program will embody frigates and submarines and assist keep away from what Andrews calls a “valley of death” state of affairs, when home shipbuilding turns into briefly moribund as a consequence of an absence of orders.

The trade faces such a state of affairs for a interval within the 2020s after new Air Warfare Destroyers are constructed and earlier than a frigate program commences, Andrews mentioned.

“I would like to see Navy, Defence and industry move to a better asset-management model to maximize availability,” Chief of Navy Vice Admiral Tim Barrett instructed the convention. “Navy needs a strong, viable shipbuilding industry.”

Prime Minister Tony Abbott’s authorities final month invited Japan, Germany and France to bid to helm a A$50 billion ($38.3 billion) submarine development program, the biggest protection procurement program within the nation’s historical past.