Global downturn sinks Australian submarine float
02.26.09, 03:14 AM EST
By James Grubel
CANBERRA, Feb 26 (Reuters) - Australia's government on Thursday dropped plans to sell its defence ship builder, Australian Submarine Corporation (ASC), saying the global economic downturn may affect a successful sale.
Yahoo! BuzzAnalysts had said the ASC, which built and maintains Australia's fleet of six Collins-class submarines, was worth about A$300 million ($194 million). The company also has a contract to build the navy's three air warfare destroyers.
'It is unfortunate that the current economic climate presents significant risks to a successful sale of ASC,' Finance Minister Lindsay Tanner said in a statement. 'In addition, a sale in the short term could complicate the operations of the company given ASC is currently building the Royal Australian Navy's air warfare destroyers and likely to be considered in any future submarine build programme,' he said.
Australia may build up to 12 new submarines, at a cost of up to A$25 billion, under a new defence strategic review to be outlined in April, according to local media reports. The Adelaide-based ASC may win some of those contracts.
The sale process began under the former conservative government, but is complicated because the ASC has access to high-technology U.S. weapons systems. That means any buyer would need U.S approval to access sensitive technology.
Australia's push to boost the submarine fleet separately faces a major hurdle, with the navy struggling to find enough submariners to crew its existing six submarines.
02.26.09, 03:14 AM EST
By James Grubel
CANBERRA, Feb 26 (Reuters) - Australia's government on Thursday dropped plans to sell its defence ship builder, Australian Submarine Corporation (ASC), saying the global economic downturn may affect a successful sale.
Yahoo! BuzzAnalysts had said the ASC, which built and maintains Australia's fleet of six Collins-class submarines, was worth about A$300 million ($194 million). The company also has a contract to build the navy's three air warfare destroyers.
'It is unfortunate that the current economic climate presents significant risks to a successful sale of ASC,' Finance Minister Lindsay Tanner said in a statement. 'In addition, a sale in the short term could complicate the operations of the company given ASC is currently building the Royal Australian Navy's air warfare destroyers and likely to be considered in any future submarine build programme,' he said.
Australia may build up to 12 new submarines, at a cost of up to A$25 billion, under a new defence strategic review to be outlined in April, according to local media reports. The Adelaide-based ASC may win some of those contracts.
The sale process began under the former conservative government, but is complicated because the ASC has access to high-technology U.S. weapons systems. That means any buyer would need U.S approval to access sensitive technology.
Australia's push to boost the submarine fleet separately faces a major hurdle, with the navy struggling to find enough submariners to crew its existing six submarines.