Destroyers decision delayed

The decision on the winner of the Australian $6 billion contract for naval air warfare destroyers has been delayed by at least three weeks following demands made by the Defence Department for more detail from the Victorian and South Australian governments about their support for the project. Victoria wants the three warships to be built at the Williamstown dockyards, while SA has set up a greenfields site at Osborne.

The department wants precise details about the states’ infrastructure and construction commitments to support the bids, financial backing and pledges on innovation and building maritime trade skills. This will allow for further consideration of the bids, including clarification of the commitments by competing state governments and it is expected to take a recommendation to Australian cabinet in April.

SA is expected this week to increase pressure on Victoria by announcing infrastructure support worth more than $100 million. Victoria has promised millions of dollars to support the bid by Tenix to build at Williamstown. It has also pledged to create a $20 million shipbuilding college and taken sole planning control of the site.

Tenix has lodged a second bid to build the ships in SA. There are also bids from the SA-based ASC Shipbuilding and US company Northrop Grumman. The contract is too big for a single shipyard and some work will be spread around Australia. It is believed ASC proposes to undertake 30% of the work at Osborne, including the critical systems and final assembly, with the remaining 70% to be put to tender.