Defence and steelwork jobs: Winner of $35 billion future frigates bid expected soon

TENS of thousands of tonnes of South Australian steel will be used to build the $35 billion Future Frigates, bidder BAE says - if they win.

• Secret documents show minimum 50 per cent Australian build
• Fincantieri’s bid
• Navantia’s bid

TENS of thousands of tonnes of South Australian steel will be used to build the $35 billion future frigates, bidder BAE says – if they win.

A decision on the project is imminent, with some predicting an announcement by the end of May. Defence Minister Marise Payne said this week only that it would be made “in due course”.

The three-way battle has heated up in recent weeks with intense speculation on whether Britain’s BAE, Italy’s Fincantieri, or Spain’s Navantia is in prime position.

BAE will announce today that it will partner with both BlueScope and Liberty OneSteel for more than 48,000 tonnes of steel if the company wins the bid to build the warships.

When Whyalla’s steelmaking future was looking shaky last year, industrialist Sanjeev Gupta bought Arrium and renamed it Liberty OneSteel.

Executive chairman Mr Gupta said he would be “honoured to be involved with such an exciting project” if BAE Systems Australia win.

The global combat ship-Australia (GCS-A) is BAE Systems' offer to the Commonwealth for the future frigates project.

“It’s vital for the future of our industry that government projects adopt an Australian-made focus, so we commend BAE Systems for prioritising local products and services and trust this focus will assist in this bid,” he said.

Most defence insiders The Advertiser has spoken to consider BAE the frontrunner at this stage of the tender process. Many pointed to Fincantieri making a “late run” on lobbying, while Navantia is seen to be relying on its history in shipbuilding in Australia.

BAE’s recently appointed chief executive officer Gabby Costigan said “Australian steel for Australian ships” was a significant step, and that the company was confident it had put forward the best solution.

Bernie Landy (General manager sales & marketing, Bluescope), Gabby Costigan (CEO BAE Systems Australia) & Sanjeev Gupta (Executive chairman & owner of Liberty OneSteel) Picture: Bianca De Marchi

BAE is offering a variant on its Type 26 Global Combat Ship. Their bid is seen as likely to be the most advanced in terms of anti-submarine warfare capability while critics say it has not been fully tested in the water. Navantia suffered after cost and timeline blowouts on the Air Warfare Destroyers in the past but now is seen by some as a more tried-and-tested option.

Industry involvement will be a large part of the decision after years of concern over jobs and the Federal Government’s promise to create a continuous naval shipbuilding industry.

Fincantieri is promising to build cruise ship blocks and create a cruise ship hub here, while BAE has already established a large supply chain presence in Australia. Navantia, meanwhile, is handing over management of its frigate IP to Australia, ensuring local benefits from future exports.