1300 jobs gone if ASC doesn’t get Offshore Patrol Vessels contract

DEFENCE Minister Marise Payne has confirmed there is no guarantee new patrol boats will be built in Adelaide — raising fears of hundreds of job losses.

Offshore patrol boat similar to those proposed to police Australian waters. vessel

• Fears SA’s shipbuilding industry workforce could hit zero
• We can build all subs in Australia: Japan

DEFENCE Minister Marise Payne has confirmed there is no guarantee new patrol boats will be built in Adelaide — raising fears of hundreds of job losses.

Senator Payne told Senate Estimates on Wednesday night that the evaluation process for the contract did not require the Offshore Patrol Vessels to be built in Adelaide, despite this promise from Tony Abbott last year.

Defence Industries Minister Martin Hamilton-Smith was alarmed by the comments.

“The fact that having promised that the offshore patrol vessels would be built in Adelaide in August last year, the government has now failed to put Adelaide in the tender is alarming,” he said.

“This is $5 billion worth of work, it’s 800 jobs, 400 direct and 400 indirect, 7200 man years of meals on the table for offshore patrol vessels now at risk to going off somewhere other than Adelaide.”

The work, which was meant to start in 2018, was meant to cover the gap between the so-called Valley of Death until work on the frigates began in 2020, and then submarines.

“We need this work to ensure our facility at Osborne doesn’t grind down to a handful of people and we don’t have a cold-start as we work back up to frigates.

“Without that offshore patrol boat work, the rest of what we planned for the future in regards to frigates and submarines is at risk.”

Mr Hamilton-Smith said the white paper on defence and its industry capability plan needed to be revealed.

“That’s what we were promised and that’s what South Australians expect to see.”

Mr Hamilton-Smith said all of the design partners of the offshore patrol vessels were happy for them to be built in Adelaide, and that Sydney and Perth — where the fleets are based — could not have it all.

“Certain parts of the work will occur elsewhere in the country ... but we expect the bulk of the work to be based in Adelaide like it was promised.”

Mr Hamilton-Smith also said it will cost the Commonwealth up to $1.2 million in wasted tax payer money, if the frigates are built from a cold-start.

Independent Senator Nick Xenophon echoed the concerns, saying the Federal Government was backing away from its commitment to Adelaide.

“Unless the offshore patrol vessels are built in South Australia, then we will lose the benefit of a continuous build,” he said.

“It will cost many hundreds of jobs in this state.”

Senator Xenophon said it would also cost the taxpayers of Australia billions of dollars if the government continued to “chop and change” between locations for political convenience.

Shipbuilder ASC said on Tuesday that more than 1300 workers would be out of a job by the end of 2018 and “just a few folks” will remain in 2019, without the certainty of more work.

The Advertiser revealed on Tuesday that the industry was concerned ASC would effectively hit “zero” shipbuilding employees if they don’t get the $5 billion contract to build the Offshore Patrol Vessels.

An offshore patrol boat similar to those proposed to police Australian waters.

Western Australia is in competition with SA for the OPVs, which would help maintain the workforce between the Air Warfare Destroyers and the Future Frigates.

ASC chief executive officer Mark Lamarre said on Tuesday that the workforce would be in “steady decline” as work on the AWDs wraps up.

“We’re seeing a steady decline between now and the end of 2018 when we’ll have nothing but just a few folks on this program through 2019,” he said in Senate estimates.

“We’re ramping down to just a few employees by the end of 2018.”

Former Prime Minister Tony Abbott implied that SA was set to get the OPV work, and Senator Cormann said on Tuesday that it was “most likely” but the Government confirmed in estimates there were “no guarantees”.

Senator Cormann, who is responsible for the shipbuilder, said the previous Labor Government’s delays had caused the workflow hiatus with delayed decisions.

“We are now working as fast as we can, bringing forward the Future Frigates and OPVs … we wouldn’t be facing the types of things ASC is facing in terms of its workflow if the previous government had made timely decisions,” he said.

Labor Senator Penny Wong said the 1300-plus jobs that were set to go came on top of 1000 jobs that have already gone.

“(Yesterday’s) evidence confirms that the Liberal Government’s announcement that the OPV build would be “centred in South Australia” was nothing more than political spin,” she said.

At the Australian Defence Magazine conference in Canberra, Defence Minister Marise

Payne emphasised the Government’s commitment to a continuous build.

Chief of Navy Tim Barrett suggested that continuity could be extended to submarines rather than just ships, to have a real “production line” of work.

Mr Xenophon accused the Government of using “weasel words”.

“How can they be fair dinkum about South Australia being a naval shipbuilding hub if they won’t commit to a continuous build here?” he asked.

Defence Teaming Centre chief Chris Burns declared the conference to be “another opportunity lost” to make an announcement and ensure the workflow.

“As every day goes by, more jobs are lost in our shipbuilding industry,” he said.

Chief of the Defence Force Mark Binskin said the competitive evaluation process on the OPVs had to run its course.

“While I understand the issues that are at play there we don’t want to jeopardise future capability by compressing it too much so that we wear significant risks,” he said.

Meanwhile, the chief of the global firm spearheading Japan’s bid for Australia’s Future Submarines project says it would be very willing to build the boats wholly in Australia if it wins the multi-billion dollar project.

Speaking after touring Osborne-based ASC, Mitsubishi Heavy Industries president Shunichi Miyanaga praised the construction expertise developed there throughout the two-decade Collins Class submarine project.

Asked if preferred to build submarines wholly in Australia or in both Japan and Australia, Mr Miyanaga said: “If it is the Australian government and the Australian people’s hope to be constructed fully we will be very much willing to contribute to that kind of construction, so whole construction in Australia.”

Japan, Germany and France last November lodged final bids for the submarine contract as part of a competitive evaluation process. The government says it will choose a winning bidder by the middle of the year.