Austal venture chases $2bn naval contact

Austal Ships has teamed with Raytheon Australia to bid for the upcoming Australian Government tender to build two 25,000 tonne 200 metre long amphibious ships, which is due to be issued in early 2005.

“By combining Austal?s impressive track record of on time, on budget shipbuilding with Raytheon’s expertise in electronic systems, we have created a powerful team to build and support the new amphibious vessels, along with considerable potential to bid for other naval contracts in the future,” said Austal?s Managing Director, Bob McKinnon.

The amphibious vessel project has an indicative cost of $1.5 to $2 billion and the preferred tenderer is likely to be identified by late 2005, with in-service delivery planned between 2010 and 2014. The ships are designed to replace the Royal Australian Navy’s heavy-landing vessel, HMAS Tobruk.

Austal said it would have to find new facilities, possibly outside of Western Australia, and would lobby various state governments for subsidies. However, despite the company being commissioned to build the Australian Navy’s $450 million worth of patrol boats, there are concerns it lacks the experience in amphibious ships. After getting burnt expanding into luxury boat building, most notably with Greg Norman’s Aussie Rules yacht, McKinnon said the risk in the project was minimal, as Austal would have partners. He said the capital cost would be low because the company would rent facilities to build the vessels.

Austal’s partner, Raytheon, is supplying the new electronics systems to Australia’s fleet of Collins-class submarines. Despite citing itself as a potential future bidder for the government-owned Australian Submarine Corp, Austal has ruled itself out of the $6 billion contract to build Australia’s new fleet of three air warfare destroyers. ANZAC frigate builder Tenix has already put its hands up for the destroyer contract and is preparing a bid for the amphibious ship project, but it is understood the Government has ruled out awarding both contracts to the same shipbuilder. So a Tenix win on the destroyer contract could spell good news for Austal.