France Wins $40BN Australian Submarine Contract
KABUL: (MEP) Australian Prime Minister Malcolm Turnbull announced on Tuesday that France has beaten Japan and Germany to win a $40 billion deal to build a fleet of 12 new submarines for Australia, one of the world’s most lucrative defence contracts.
However, two sources familiar with the process told Reuters that France has secured the contract ahead of Japanese and German bidders.
Another source at the French naval contractor said he was “quietly confident” of success ahead of the announcement by Turnbull.
The victory for state-owned naval contractor DCNS Group marks a vote of confidence for France’s defence industry and is a blow for Japanese Prime Minister Shinzo Abe’s push to develop a defence export industry as part of a more muscular security agenda.
“The recommendation of our competitive evaluation process of the panel, the department of defense, the experts who oversaw it, was unequivocal, that the French offer represented the capabilities best able to meet Australia’s unique needs,” Turnbull told reporters in the South Australian state capital of Adelaide where the submarines will be built.
Australia is ramping up defence spending, seeking to protect its strategic and trade interests in the Asia-Pacific as the United States and its allies grapple with China’s rising power.
Japan’s Mitsubishi Heavy Industries and Kawasaki Heavy Industries had been seen as early frontrunners for the contract, but their inexperience in global defence deals and an initial reluctance to build in Australia put DCNS and Germany’s ThyssenKrupp AG out in front.
The contract will likely have an impact on thousands of jobs in the shipbuilding industry in South Australia state, where retaining votes in key electorates will be critical for the government’s chances of re-election.
