PRIME MINISTER:
Well, good afternoon everyone. I am here with the Defence Minister Senator Payne and the Chief of Navy Vice Admiral Barrett and what we are announcing today is the build locations for 12 offshore patrol vessels and up to 21 Pacific Patrol Boats in addition to the nine Future Frigates previously announced.
As you know the largest part of the Defence White Paper is the re-equipment of the Australian Navy. We are an island nation and our security depends upon a modern and effective Navy.
Now during the six years of the Labor Government, not one new naval vessel was ordered from an Australian yard and so putting our Navy in the right situation to keep us safe and putting our naval ship building industry in the right place to build the ships we need for the future is a great national endeavour.
And these announcements today are a critical part of it. They will directly secure more than 2500 jobs for decades to come and they'll also generate thousands of additional jobs with suppliers. Now let me deal with them in turn.
The first pass approval for the offshore patrol vessels, with construction to begin in Adelaide in 2018, following the completion of the Air Warfare Destroyers program and then the OPVs construction will transfer to Western Australia when the Future Frigate construction begins in Adelaide in 2020. The Vice Admiral or the Minister can go into more detail about this but this is very important to maintain that skills base in Adelaide.
Now as part of the competitive evaluation process three designers have been shortlisted for the OPVs; Damen of the Netherlands, Fassmer of Germany and Lürssen of Germany to refine their designs. This program is estimated to be worth more than $3 billion and will create over 400 direct jobs.
Now we've also decided on the first pass approval for the Future Frigates. Three designers are now being shortlisted and they are BAE Systems with the Type 26 Frigate, Fincantieri with the FREMM Frigate and Navantia with a redesigned F100. They will now be called on to refine their designs. These frigates as you know will all be built in Adelaide incorporating the Australian developed CEA phased array radar.
That competitive evaluation process is on schedule to return second pass approval in 2018 which will allow for construction to begin in Adelaide in 2020. This program is estimated to be worth more than $35 billion and will directly create over 2000 jobs.
Now we're also announcing combined first and second pass approval for the replacement Pacific Patrol Boats. Austal Ships has been selected as the preferred tenderer to construct and maintain up to 21 replacement steel-hulled Pacific Patrol Boats in Henderson in Western Australia. Subject to negotiations, the program is estimated to be worth more than $500 million and will directly create over 130 jobs.
Austal proposes to conduct support of the replacement Pacific Patrol Boats, including deep maintenance from Cairns in Queensland. In total, through life support and sustainment, including deep maintenance for the Pacific Patrol Boats, is valued at a further $400 million over the life of the vessels.
Now these are very important announcements concerning the future of our nation, the future of our security and the future of our modern Navy. They are, as I said at the outset, part of a great national endeavour to re-equip our Navy and re-equip our naval shipbuilding industry.
DEFENCE MINISTER:
Thank you very much, Prime Minister, and good afternoon, ladies and gentlemen. Very pleased to be here with the Prime Minister today with these announcements which are absolutely central to the Government's comprehensive naval ship building plan. These three significant ship builds will deliver the necessary infrastructure requirements across the Adelaide and the Henderson ship yards.
They will create new jobs, they will develop the necessary skills and significantly broaden cooperation between industry and Government - a key aspect of both the white paper and the Defence industry policy statement.
When the decision was made to bring forward the construction of the navy's nine future frigates to 2020, and the twelve off shore patrol vessels to 2018, it was axiomatic that very timely decisions had to be made well in advance of when construction would begin. So we commenced the competitive evaluation processes for these acquisitions in late 2015 and as the Prime Minister has said, the timing of those processes remains on track.
The two down selects in relation to the off shore patrol vessels and the Future Frigates, enable industry to participate in that down-select process as the continuation of the competitive evaluation process and enable them to make their submissions in the appropriate way. The decision in relation to the Pacific Patrol Boats means that we can commence that project as soon as possible and ensure that as our Pacific neighbours are certainly eager to see that the construction of the up to 21 replacement steel-hulled Pacific Patrol Boats can get under way. I'm sure we are very pleased to answer any questions and happy to follow up.
I'll ask the Chief of Navy for any comments he wishes to add.
CHIEF OF NAVY:
Thank you, Minister. I would just like to endorse the fact that this is not a series of projects, this is about the programmatic effects of building a ship building industry within Australia that will enable the future of navy to be given great certainty. It is a requirement to build an industry that will allow us to look at future projects that can be designed and developed within Australia, to be able to continuously build, evolve our ships and to permanently provide that capability to Government. So this is more than just a series of projects, this is a programmatic view on a capability that is indeed a national endeavour.
JOURNALIST:
Should this approach, announcing the location of the bill before the actual bidder is selected, the same approach you'll take with submarines?
PRIME MINISTER:
Can we just focus on the projects, the program we're discussing today if we have questions on that. Sorry did you have a question?
JOURNALIST:
Can I just confirm the split, is it likely it will be two OPVs in Adelaide and the rest in WA and is that because South Australia isn’t considered to have the capacity to bill them at the same time as the Frigates?
DEFENCE MINISTER:
So Tory, the process of commencing the build in Adelaide is certainly in large part about ensuring that we, as far as we are able to, given the situation that is currently before us, that no ship acquisitions were made from domestic builders during the life of the previous government. The process we are undertaking now is to ensure as far as possible that we engage strongly with the workforce and industry in South Australia commencing with the off shore patrol vessels.
We then as you know are committed to cutting steel or the commencement of the future frigates program in 2020. That process will see its way through its normal course and when we need to move into the yards in relation to the Future Frigates we will then enable the change to Henderson in Western Australia.
JOURNALIST:
Is it likely to be two and ten, or?
DEFENCE MINISTER:
I think we're a long way from that point. We are committed to starting the off-shore patrol vessels in Adelaide. The first off shore patrol vessel and potentially others after it will be built in Adelaide based on the capacity there, which will then be impacted by the bringing forward of the Future Frigates in 2020, and we will have to make decisions, obviously with advice from the contractors and Navy and Defence, about when things move. But the process will begin in Adelaide in 2018.
JOURNALIST:
Why the switch from aluminium to steel?
HEAD OF NAVY:
You're referring to the Pacific Patrol Boats?
JOURNALIST:
Yes.
HEAD OF NAVY:
That was a decision made early on for reasons of their ongoing maintenance, through life. It’s a balance between what was also available in the market and what could be put on offer, so there are a number of reasons why aluminium, in this case, was replaced by steel.
JOURNALIST:
Can I just clarify, the move from Adelaide to Western Australia, does that require a lot of retooling or rearranging to facilitate the shift to the Frigate build?
MINISTER FOR DEFENCE:
Well, Western Australia will, Laura, be building the Pacific Patrol Boats as we have announced, so that process will be underway but there will be a need for two lines, yes.
JOURNALIST:
Will there be local steel requirements…
PRIME MINISTER:
Sorry, James – just speak up.
JOURNALIST:
Will there be local steel requirements for the steel-hulled vessels? Does this actually have implications for steel makers in this country too?
DEFENCE MINISTER:
There is certainly local steel requirements for the Future Frigates and the off shore patrol vessels. As I understand the construction of the Pacific Patrol Boats it is a particular variation of a high tensile steel that we don't currently make in Australia, as I understand.
JOURNALIST:
Are these contracts, sorry, are these announcements contractually bound? I mean, after the election, could another government decide to build them somewhere else?
PRIME MINISTER:
Can I just say the commitment to the down-select to Austal, in respect to the Pacific Patrol Boats, will lead, subject to negotiations, to a contract for the construction of those vessels. The down-select to three contenders in respect of the other vessels obviously will have some time to run and will go past the expected date of the election.
JOURNALIST:
You can't guarantee the OPVs will be built in WA from 2020? That's just a plan - it’s not a guarantee?
DEFENCE MINISTER:
The Future Frigates in 2020. OPVs in 2018.
JOURNALIST:
No - OPVs in WA from 2020?
DEFENCE MINISTER:
I think I have just explained in some detail to Tory the process.
JOURNALIST:
Is it a guarantee or is it just a plan?
DEFENCE MINISTER:
Well, it is the down-select process of the competitive evaluation process. So, that is what the three parties will be asked to come back to Government on.
JOURNALIST:
So it’s a guarantee they will be there from 2020?
DEFENCE MINISTER:
As soon as the yard in Osborne needs to be freed up for the Future Frigates.
JOURNALIST:
Queensland was hoping for some of this work in Cairns. Why not?
DEFENCE MINISTER:
You'll see, and I think I mentioned it in my, well the Prime Minister mentioned in his remarks that the sustainment, including deep maintenance, will be done in Cairns but the strong view of Defence and the advice Government received was that the Austal proposition represented the best value for the Commonwealth dollar.
PRIME MINISTER:
Vice Admiral, do you want to elaborate on that?
CHIEF OF NAVY:
There will be more activity in Cairns, I would suggest from the new OPVs. We will be basing OPVs, which are a larger vessel than the current Armidales that operate in Cairns, and there will be some new facilities construction in Cairns to be able to support that larger vessel. So, there will be more work in Cairns.
JOURNALIST:
Will the allocation of this work have any bearing on where submarines could be built? Do you need to clear work out of some yards for the submarines or would you use a new yard for that work? If the submarines are built in Australia?
DEFENCE MINISTER:
Brendan, we will be talking to you about submarines in due course as you and I have discussed at some length already.
PRIME MINISTER:
We're talking about surface vessels today.
[Ends]