After months of negotiations, Lürssen Australia has announced that Austal will not be taking part in the Offshore Patrol Vessel contract.

In a statement, Lürssen Australia, the prime contractor and designer for the Australian government’s SEA 1180 Offshore Patrol Vessel program, confirmed it has moved to conclude commercial negotiations with its build partners for the multibillion-dollar project.

Lürssen has confirmed subcontracting arrangements with ASC and Perth-based Civmec Construction and Engineering for steel fabrication and construction, Saab Australia for the situational awareness system and L3 for communications throughout the ships.

Construction of the first vessel for the Royal Australian Navy can now commence at the Osborne shipyard in South Australia before the end of 2018.

"Lürssen has worked hard to explore options to leverage the experience base at Henderson for the construction of 10 vessels in Western Australia, including conducting lengthy negotiations with Austal," Lürssen Australia said in its statement.

"Ultimately, the negotiations with Austal have not generated a proposal that represents an acceptable level of value for money and Austal will not be a participant in the OPV build team."

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