Claims Australian business not good enough to help build Attack Class submarines probably ‘miscommunication’, Premier says

South Australia will still be able to pitch for a “vast array” of submarine work, the company behind the $50b project says amid new fears the bulk of the work will be done abroad.

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The company building Australia’s $50 billion Future Submarines fleet has reassured South Australian firms they will be in the running for a “vast array” of contracts, amid concerns the bulk of the work will go overseas.

Naval Group Australia and the Federal Government yesterday released a joint statement talking up the involvement of Australian companies on the project.

It follows a story in The Australian in which Naval Group Australia chief executive John Davis reportedly said the local industry was facing challenges and might not get half the value of the contracts.

There are continuing concerns that work on the new submarines, set to be built in Adelaide, will end up going to France, where Naval Group’s parent company is based.

“We will be systematically approaching Australian industry to identify suitable suppliers of the vast array of equipment, ranging from hydraulic systems to galley equipment,” the joint statement said.

Naval Group Australia CEO John Davis. Picture: Roy VanDerVegt

Design authority engineers that have started work with submarine builder Naval Group Jordan Gray, Dilan Galagedera and Samil Acar. Picture: Tait Schmaal

“The level of Australian industry participation and the development of Australian capability will continue to grow, meeting our goal of maximum industry involvement in the Attack Class submarine program and sustaining the sovereign control our nation requires over this strategic defence capability.”

Under the project’s Strategic Partnering Agreement, Naval Group and Defence must maximise the involvement of Australian industry.

However, if the Australian capability does not exist, is too expensive, or will take too long, Naval Group is likely to use its existing supply chain.

Premier Steven Marshall said he would hold Naval Group to its commitment to prioritise local firms.

“South Australian firms deserve to quote on all components of these 12 Attack-Class submarines,” he said. “We’ve got the capability in SA. I don’t want anyone talking down the capability SA defence firms have. I feel this is a miscommunication because we genuinely have the firms, the capabilities in place to deliver.”

Federal Defence Minister Linda Reynolds said she was “disappointed” at comments about Australia’s shipbuilding industry capability.

This computer-generated handout image released by the French industrial naval, defence and energy group DCNS on April 26, 2016 shows a 4,500 tonne Barracuda shortfin submarine. Picture: AFP

“Our Government will hold Naval Group to account for the commitments they signed on for to work with Australia’s world-leading defence and shipbuilding industry,” she said.

Defence Industry Minister Melissa Price pointed to her recent announcement that there would be an independent audit of defence programs to ensure local industry was involved, and said the Government was putting more resources into backing small businesses.

However, a damning report by the Australian National Audit Office last month revealed Defence opted to have the manufacturing of complex hull parts done in France, rather than Australia to mitigate the risk.

Centre Alliance Senator Rex Patrick said Naval Group seemed to be manoeuvring to maximise French industry content.