Decision on $50bn future submarine project expected next week with Germany’s TKMS firming as favourite

GERMANY is firming as the preferred bidder for the $50 billion Future Submarines project, with an announcement expected next week — find out what this would mean for the Adelaide workforce.

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GERMANY is firming as the preferred bidder for the $50 billion Future Submarines project, with an announcement expected next week.

The Government is set to make good on its promise made before the last federal election to build 12 submarines in Adelaide.

While there is an outside chance that the National Security Committee will decide on a hybrid build — starting in France before moving to South Australia — it is leaning towards the German bid which favours building the whole fleet here.

The plan is to announce a final decision next week, most likely in Adelaide, before the election is formally announced.

Prime Minister Malcolm Turnbull has confirmed his plan to ask Governor-General Peter Cosgrove to dissolve both houses of Parliament for a July 2 election but it is not yet official.

Once it is official conventions dictate that the caretaker Government not make any major commitments.

The National Security Committee has discussed Defence’s report on the three bids from German, Japan and France. The Advertiser has been told Japan is now lagging, with Germany a more likely option than France.

Japanese shipbuilders Mitsubishi Heavy Industries made it clear this week they were prepared to build all 12 submarines in Adelaide.

A type 216 submarine from German builder Thyssen Krupp Marine Systems (TKMS).

However, many believe that Japan would prefer to build at home, that the French set up means a hybrid build is the best option, while the Germans have consistently said they want to build the whole fleet in Australia.

Earlier this week the Government announced that the Offshore Patrol Vessel project would begin in Adelaide, then move to Western Australia when work on the Future Frigates begins here in 2020.

That decision was warmly welcomed with commentators believing it will help bridge the so called Valley of Death — where jobs and crucial skills are lost — and pave the way for bigger warship and submarine projects.

Shipbuilding and submarine jobs will play a critical role in the upcoming election, with fears MPs could lose seats over the issue.

Mr Turnbull yesterday said an announcement about where the submarines would be built would “be made shortly”. “I’m not going to be drawn on dates,” he said.

German shipbuilders ThyssenKrupp Marine Systems on Tuesday hit out at reports that a local build would cost 30 per cent more than building overseas.

TKMS Australia chairman John White said they had set a fixed price of less than $20 billion. Dr White said there was an “almost malicious” lack of confidence in the capacity of the Australian industry.