MELBOURNE, Australia — Australia's plans to advance the schedule for building frigates and patrol vessels and to emphasize domestic production effectively commits the government to a permanent shipbuilding industry, officials said.

Australian Prime Minister Tony Abbott and Defence Minister Kevin Andrews jointly announced a plan last week on Aug. 4 to bring forward the Royal Australian Navy's Future Frigate and Offshore Patrol Vessel programs and build the vessels in Australian shipyards.

Together with the Future Submarine program, the government says it will invest AUS $89 billion (US $65.4 billion) over the next 20 years.

Abbott committed to a "continuous build" of the surface warships in a measure to overcome the "boom and bust" cycles historically experienced by naval shipbuilders in Australia.

"The government will implement a continuous build of surface warships in Australia. This means that Australia's shipbuilding workforce will build the Navy's future frigates and offshore patrol vessels," he said. "It's the first time that any Australian government has committed to a permanent naval shipbuilding industry. "This strategy will transform Australia's naval shipbuilding industry and put it onto a sustainable long-term path, giving the workforce certainty in the future."

In addition the prime minister and defense minister jointly announced that an additional $1.2 billion (US$0.88 billion) will be invested in the troubled Air Warfare Destroyer (AWD) program, together with "substantial additional shipbuilding management expertise" by October, in an effort to reform the project.

"The government will also undertake further reform of ASC [the lead shipbuilder in the AWD Alliance] to ensure Australian shipbuilding is best structured to support a continuous build program and future naval projects are delivered on time and on budget," Abbott said. "To this end, the government has commissioned a strategic review of ASC's shipbuilding capacity. The review will consider how to best implement long-term arrangements."

With the completion of the two Canberra-class LHDs and the winding down of the construction phase of the AWD program, naval shipbuilders in Australia are facing what has been coined the "valley of death." and Both BAE Systems at Williamstown in Victoria and Forgacs in New South Wales have seen reductions in their respective workforce.

Abbott also announced that the frigates would be constructed in Adelaide, with the continuous build program to begin in 2020 after a competitive evaluation process to select a design. This effectively brings the Future Frigate program (SEA 5000) forward by three years over the timetable in the previous Defence Capability Plan.

The competitive evaluation process will begin this October and the government claims the timing will save over 500 jobs in the industry, helping to mitigate against a "cold start" after the completion of the current AWD program.

The Offshore Patrol Vessel program (SEA 1180) will be brought forward by two years, with a continuous onshore build to begin in 2018, again following a competitive evaluation process. however It is not clear, however, where these vessels will be constructed.

Together, the surface combatant projects are valued at $40 billion (US$29.41 billion) and the government claims they will sustain around 1,000 shipyard jobs that otherwise would have been lost. It is estimated that around 2,500 jobs will result over the life of the programs.

Australia's Navy chief, Vice Adm. Tim Barrett, applauded the move to accelerate the programs.

"This provides certainty for not just the naval shipbuilding side of things, but it also provides certainty for planning, not just within Navy, but within the Australian Defence Force," he said. "Principally, the frigates will be used as the workhorses of Navy over the next couple of decades."

Asked if retirement of the current Anzac-class frigates would be brought forward as a result, Barrett said that no decision would be made before the completion of the competitive evaluation process.

"Let me say, This timing is planned such that we can manage the Anzac class with the delivery of the new frigate," he told reporters.

For its part, BAE also welcomed the announcement, describing it as a "positive for Australia."

"We look forward to engaging with the federal government so we can better understand the implications this will have on our shipbuilding operations in Australia and the contribution we can potentially make as this country's leading naval shipbuilding prime contractor," acting Chief Executive Glynn Phillips said. "We know from our experience with building the current Anzac frigates, the two landing helicopter dock warships and other vessels, that when a continuous build program is in place, we can achieve and sustain productivity improvements that result in a globally competitive performance."

However, some political observers consider the announcement to build at least the frigates in Adelaide as a political move to shore up Liberal Party support in marginal areas in the lead up to the 2016 Australian federal election.

Further details of the Future Submarine program (SEA 1000) were not forthcoming during the announcement and there are fears in South Australia that the boats will be constructed offshore. The Australian government is dealing directly with its Japanese counterpart to evaluate the Soryu-class submarine, and DCNS of France and Germany's TKMS are engaged with Australia's defense acquisition agency to offer their proposals.

Abbott said the government has asked each potential partner to provide prices for a domestic build, a hybrid build and an offshore build, but noted that a recent Rand study into the viability of Australia's naval shipbuilding industry was less confident about the ability to build submarines locally.

"Let's wait and see what the competitive evaluation process gives us, but the point is that the Rand report was unambiguous; under the right conditions, we can effectively build surface warships here," he said. "The Rand report was less confident about submarines."

With regard to the benefits of a continuous build program for the surface combatants, Andrew Davies, a senior analyst with the Australian Strategic Policy Institute (ASPI) in Canberra, said in ASPI's "The Strategist" blog that he remained skeptical, and also described the competitive evaluation process as a "beauty contest."

"We're far from convinced of the soundness of a continuous build program. But beyond that overarching point, it's difficult to say much more given the paucity of details in today's announcements," he wrote on Aug. 4. "Frustratingly, we weren't told how many vessels of each class will be built, nor the frequency with which they will be built. As a result, we don't know how a continuous-build program will be achieved in either instance. Will the fleet expand to accommodate a continuous-build scheme, or will the life-of-type be cut to allow more frequent replacement?

"Either way, there'll be substantial additional costs; which might explain why the notion of twelve future submarines seems to have morphed into acceptance of a fleet of only eight."


Nigel Pittaway is the Australia correspondent for Defense News.

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