Weapons of Mass Construction: Australian Naval Shipbuilding

Release of the ASPI’s Strategic Insight on Australian Naval Shipbuilding

ASPI today released its latest Strategic Insight: Weapons of Mass Construction: Australian Naval Shipbuilding

Its author Dr Mark Thomson said; “The Government plans to spend around $8 billion on new naval construction work over the next fifteen years.”

“While designs for the first two classes of new vessels are now being considered, the Government has not yet decided how to engage Australia’s naval shipbuilding industry in the venture.”

“This is a tough issue for the Government because how they proceed with these first two projects will reshape the industry for years to come. And Australia’s naval shipbuilding industry is currently spread across all the mainland states except for Queensland.”

“A further complication is that the Government is the sole owner of the Australian Submarine Corporation (ASC) which is unavoidably part of any future industry structure.”

“The key issue for the Government is whether to deliberately try and restructure the sector, or to simply offer the projects for tender and see what the market throws up.”

“There are signs of interest from outside of the traditional naval construction sector. These new entrants bolster the case for allowing competition to run its course with minimal intervention.”

“To ensure that the taxpayer is getting value for money, the option of foreign construction should not be discarded. The economies of scale in the current construction program are slight; only 8 vessels spread across 5 different classes to be delivered over 12 years.”

Dr Thomson concluded by saying; “Irrespective of the industry approach taken, it’s important to guard against risky Australian-unique projects by limiting the changes to existing ship designs.”