Australian Prime Minister Malcolm Turnbull announced today that France won the $50 million deal to construct the country’s next submarine fleet.
This comes following the intention to boost the defense spending in the country, with the aim of guarding its strategic and trade interests around the Asia-Pacific as the United States and its allies deal with China’s intensifying influence, Channel News Asia has reported.
France, Germany and Japan were the three contenders of the multi-million dollar deal, with France seen as a strong favorite. Whichever country would be handed the offer, it will be tasked to put together 12 submarines to augment Australia’s future defense strategies, Reuters reported.
Local media reports have insinuated that early frontrunners, Japan’s Mitsubishi Heavy Industries and Kawasaki Heavy Industries, have dropped out of the race, which leaves Germany’s ThyssenKrupp AG and France’s state-controlled naval contractor DCNS to fight for the bid.
One source from DCNS told the news outlet that he was “quietly confident” that the country had obtained the contract while another who had inside knowledge of the development said the French naval supplier had already won it ahead of Turnbull’s announcement.
The contract will most likely affect thousands of jobs in the shipbuilding industry in Southern Australia. ASC, a shipbuilding company in Adelaide, had warned that if the deal pushes through and the submarines would be built in another country, there would be substantial job dropping.
Speaking prior to the announcement of Turnbull, federal treasurer Scott Morrison said that speculating on its timing would be “highly inappropriate.” But he did admit that he was heavily involved in finalizing the deal.
“What’s important for our defence procurement plan is that we’re actually getting the technology and other transfer that occurs from being involved in these projects,” Morrison told reporters, according to ABC News.
“They’re significant expenditures of public money and we’ll be focusing on ensuring that Australians get the real benefit of that for jobs and growth in the future.”