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Tuesday, August 4, 2015, 13:23

Australia to spend US$64.9b on ships, subs

By Reuters

 Australia to spend US$64.9b on ships, subs
HMAS Melbourne, one of the Royal Australian Navy's four Adelaide Class guided missile frigates, sits in Sydney Harbour on March 6, 2015.(AFP PHOTO / Peter PARKS)

SYDNEY - Australia will spend A$89 billion (US$64.9 billion) on ships and submarines for its navy over the next 20 years, Prime Minister Tony Abbott said on Tuesday, A$40 billion of which has been earmarked to build surface ships domestically.

Two naval shipbuilding programmes, the A$20 billion SEA5000 Future Frigate project and the SEA1180 Offshore Patrol Vessels, would be brought forward to guarantee the continuous domestic construction of surface warships, Abbott said.

Abbott, who is facing intense pressure from within his conservative Liberal Party to ensure that an A$50 billion stealth submarine programme is built domestically, said the move would save about 1,000 jobs.

The winner of the lucrative submarine bid, Australia's biggest-ever defence procurement deal and one of the world's most lucrative defence contracts, would be considered separately as part of a competitive evaluation process.

"The fundamental thing that we have done today is ensure that we don't just have a ship build in Australia, we have a fleet build in Australia," Abbott told reporters in Adelaide.

Germany's ThyssenKrupp (TKMS), France's state-controlled naval contractor DCNS and a Japanese government consortium of Mitsubishi Heavy Industries and Kawasaki Heavy Industries are bidding for the submarine contract.

TKMS is wooing anxious members of the government with the economic and political benefits of its proposal amid concerns that awarding the contract overseas could result in major political repercussions.

A Japanese government team is in talks with Britain's Babcock International Group and BAE Systems, Reuters reported last month, in response to Australia's desire to have as much domestic participation in the project as possible.

Australian Prime Minister Tony Abbott is also eager to deepen security ties with Japan, reflecting a US desire for its two allies to take a bigger security role in Asia as China's military might grows.

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