MARK KENNY, POLITICAL EDITOR, CANBERRA, and AAP
August 20, 2007 12:30pm
A RUDD Labor government would build Australia's next generation of hi-tech submarines in Adelaide - and Defence Minister Brendan Nelson has pledged to match the deal.
The plan would cut through years of tender evaluation processes.
The surprise Rudd decision would ensure South Australia remained the centre of naval ship building beyond 2030 and guarantee thousands of jobs. And it would pump billions of dollars into the state economy.
And on radio in Adelaide today Mr Nelson said the government wanted to build the next generation of submarines and the most likely place to do the work was in Adelaide.
"I can't and I shouldn't make reckless commitments on behalf of the Australian taxpayers," Dr Nelson told ABC radio.
"But having said all that, you can bet London to a brick they will be built under our government by the Australian Submarine Corporation in Adelaide, South Australia."
However, the minister said the government would apply good financial rigour to the decision-making process.
The project could generate more than 5000 jobs, depending on the number of vessels ordered and their complexity.
It is likely the final contract for the new submarines could easily be up to $15 billion.
The choice of Adelaide without resort to a tender process also reflects the electoral importance of the state, which has five of the nation's most marginal seats.
The Labor initiative is the latest in an emerging bidding war for SA voters and comes just two days after Prime Minister John Howard pledged $100 million to upgrade the Southern Expressway, turning it into a dual carriageway.
The submarine announcement is also a major victory for incoming national ALP president, SA Premier Mike Rann.
The early declaration of Adelaide's ASC as the constructor for the major works places the Howard Government under political pressure to respond between now and the poll.
"There is widespread agreement that the Collins-class boats built by ASC in Adelaide are the best conventionally powered submarines in the world and that they provide a vital military capability for Australia," Mr Rudd said.
The lucrative contract would have major commercial implications for ASC, which is due to be privatised next year.
It will also come as unwelcome news to other hopeful companies, such as the Melbourne-based Tenix. ASC beat Tenix in 2005 to secure the then $6 billion contract to build the navy's new air warfare destroyers.
Labor wants construction of the first of the new submarines to begin as the fourth and last of the air warfare destroyers nears completion in 2017. This would be 30 years since the then Australian Submarine Corporation in 1987 won the $5 billion contract to build six Collins-class boats.
Labor plans to have the assessment process complete within three years to allow the federal government to give "first pass approval" in 2011.
The defence community has been aware of the eventual need for replacements for the Collins-class subs but no Government decision has been taken.
Opposition Defence spokesman Joel Fitzgibbon will tonight outline the plan and other aspects of Labor's defence thinking at a meeting of the Royal United Services Institute of SA.
Labor believes planning for the replacement vessels for the Collins-class submarines must begin immediately to take advantage of the flow of work and the retention of expertise associated with the air warfare destroyer contract.
That contract has been valued at $9.5 billion after the recent decision to build a fourth ship.
The decision is potentially a major boost for the state and cements it as the premier shipbuilding state into the future.
Labor's policy calls for the initial planning phase to begin immediately to identify the kind of vessels needed and the number to be built.
The Collins-class submarines, which in the early days of the project were beset with technical difficulties, are now regarded as the world's best conventionally powered submarines.
However, analysts advise the fast-moving nature of defence technology and the warfare it allows, means replacements must be planned for early.
SA's new Governor, retired Rear Admiral Kevin Scarce, recently said helping SA secure major defence contracts was part of his job.
He said there could be as much as $100 billion worth of defence work to tender for in coming years.
Defence Minister Brendan Nelson said the government wanted to build the next generation of submarines and the most likely place to do the work was in Adelaide.
"I can't and I shouldn't make reckless commitments on behalf of the Australian taxpayers," Dr Nelson told ABC radio in Adelaide today.
"But having said all that, you can bet London to a brick they will be built under our government by the Australian Submarine Corporation in Adelaide, South Australia."
However, the minister said the government would apply good financial rigour to the decision-making process.
