Aussie sub dispute ended

Following two years of acrimonious negotiations and legal challenges, the Australian federal government and the Swedish submarine designer Kockums have resolved to settle all outstanding disputes involving the Collins-class submarines.

This breakthrough removes the last obstacles to the long-awaited sale of the government-owned Australian Submarine Corporation, the Adelaide-based builder of the Collins class submarines. ASC will bid for the prime contract to build the Navy’s $6billion air warfare destroyers project irrespective as to whether or not it remains in government ownership.

The government later this month will examine the future of naval shipbuilding and ASC.

The sale of ASC was delayed pending the resolution of the dispute with Kockums and a satisfactory financial plan for the company. Central to the dispute was the ownership of intellectual property in the design of the Collins-class boats and the ability of ASC to use it to maintain and upgrade the submarine fleet. It is believed that the government will pay Kockums a set fee for the use of the IP, with Kockums being retained as a strategic adviser for the submarine project.

The government wants ASC’s Adelaide shipyard to be the centrepiece of the new wave of naval shipbuilding in Australia, which will include two large amphibious ships as well as the new destroyers.