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SA backs calls for interstate shipbuilding hubs

hmas farncomb
HMAS Farncomb at buoy during harbour phase of exercise Kakadu VII. Image via Commonwealth of Australia.

South Australia’s Defence Industries Minister has come out in support of the Henderson Alliances request for interstate maritime centres to aid in SA’s construction of the Future Frigates and Future Submarines.

South Australia’s Defence Industries Minister has come out in support of the Henderson Alliances request for interstate maritime centres to aid in SA’s construction of the Future Frigates and Future Submarines.

Martin Hamilton-Smith told Defence Connect that, despite fears among interstate governments and businesses that SA has unfairly been given the lion's share of the work, SA is fully supportive of a national approach to the mammoth projects.

"For the Future Submarine project, Frigates and Offshore Patrol Vessel projects to be delivered effectively, there must be a 'Team Australia' approach," explained Minister Hamilton-Smith.


"As federal Defence Industry Minister [Christopher] Pyne said earlier this year, South Australia will get 'the lion’s share' of work and the decision has already been made to centre construction in Adelaide. However, this is the largest national infrastructure project in our history and there is plenty of work to go around, including in fleet sustainment, so of course there’ll be work shared all around the country."

Minister Hamilton Smith stressed that, along with ensuring a fair spread of work across the national projects, the states must work collaboratively to ensure the companies delivering the projects handover intellectual property (IP) to Australia.

"I want to ensure the IP in these projects is transferred to Australian workers, this will ensure our sovereign capability and also allow for collaboration between the states," the minister said.

"The important thing is to work together to get the promised 90 per cent of the work done in Australia not overseas. The states must work together to deliver the best submarines, OPVs and frigates and create a first class shipbuilding industry."

Earlier this year, the former Army officer raised concerns that Australia would loses its opportunity to develop its own IP and sovereign capability, particularly in the case of the Future Submarines which could be both designed and built by Naval Group, rather than an Australian shipbuilder like ASC.

"It is one thing to get an architect to design your house; it is another thing to have the architect build the house," Minister Hamilton-Smith said earlier this month.

"Most people use a separate builder. There are a host of risks in using the architect to also do the build, but principal among them is giving the Australian people, industry, unions and workers the confidence that at the end of the process we will have an indigenous capability ... a capability to build and operate and maintain our own submarines and our own frigates. I want to flag that as a major concern of the South Australian government.

"If we are to build a genuine sovereign naval shipbuilding capability, then an Australian company should own at least 51 per cent of the shipbuilder carrying out the work.

"How will we guarantee that Australian subcontractors and workers will be given a high level of work in the supply chains if the shipbuilder is not Australian-owned?

"What will happen at the end of this particular build if we want to choose another design for the next submarine or frigate run? How will we evolve our own intellectual property and national capability if foreign government-owned multi-nationals control both the design and build?

"These are questions the federal government must answer." 

12 Future Submarines, nine Future Frigates and two Offshore Patrol Vessels will be constructed in South Australia.

The $35 billion Future Frigate program is due to commence in Adelaidin 2020. It will lead to approximately 2,000 direct jobs. BAE Systems (UK), Ficantieri (Italy) and Navantia (Spain) are the three shortlisted contenders competing for the contract.

Construction of the 12 Future Submarines will start in 2022. Worth $50 billion, French designer Naval Group estimates the submarines project represents 2,900 direct jobs in South Australia, with 1,700 jobs in shipbuilding, 100 jobs at DCNS office, 600 jobs in supply chain and 500 jobs in combat system integration.