Federal election 2016: Adelaide’s shipbuilding industry saved, now for submarines

SHIPBUILDERS have been thrown a life raft in the form of a Government pledge to start building offshore patrol boats in Adelaide in 2018. Now SA looks for a decision on a local submarine build before the July 2 Federal election.

British Type 26 frigate

• ANALYSIS: Cynical South Aussies keep eye on future
• NICK XENOPHON: Show us the contracts
• CHRISTOPHER PYNE: SA dodges valley of death
• JAY WEATHERILL: Thousands of SA workers can breathe easier
• FUTURE: Will Adelaide win the future subs contract?

SHIPBUILDERS have been thrown a life raft in the form of a Government pledge to start building offshore patrol boats in Adelaide in 2018.

The decision means the industry can minimise the jobs and skills “valley of death”, and hopes are building an announcement on the $50 billion Future Submarine project will be made within weeks, after Prime Minister Malcolm Turnbull was yesterday handed the trigger for a double-dissolution election on July 2.

Making the surprise shipbuilding announcement yesterday, Mr Turnbull and Defence Minister Marise Payne, declared the build would at least begin in Adelaide.

The industry has been pushing for 12 OPVs to be locally built to keep skills and jobs in South Australia. These vessels are seen as a critical bridge between the Air Warfare Destroyers and the Future Frigates; a bridge that could ease SA through the so-called Valley of Death.

The Future Frigate program will then lead into the $50 billion Future Submarines program.

The $3 billion to $4 billion project will then move to Western Australia once the $30 billion Future Frigate program begins down at Techport in 2020.

Mr Turnbull said shipbuilding projects would secure more than 2500 jobs “for decades”, and thousands more indirect jobs. The OPVs themselves should create more than 400 jobs.

“We are an island nation and our security depends upon a modern and effective navy,” he said.

“During the six years of the Labor Government, not one new naval vessel was ordered from an Australian yard and so putting our navy in the right situation to keep us safe and putting our naval shipbuilding industry in the right place to build the ships we need for the future is a great national endeavour.”

A file photo of a Malaysian offshore patrol vessel, similar to the ones that will be built in Adelaide and Western Australia.

Senator Payne said during the process the Government would work out at what point to move the project to WA.

“The first offshore patrol vessel, and potentially others after it, will be built in Adelaide based on the capacity there, which will then be impacted by the bringing forward of the Future Frigates to 2020,” she said.

“We will have to make decisions obviously with advice from the contractors and Navy and Defence about when things move but the process will begin in Adelaide in 2018.”

They also announced that up to 21 Pacific patrol vessels will be built in WA and short-listed designers for the OPVs and the Future Frigates.

Germany’s Lurssen and Fassmer and the Netherlands’ Damen are the three options for the OPVs.

UK’s BAE Systems, Italy’s Fincantieri, and Spain’s Navantia are in the running for the frigates.

Federal Labor immediately panned the announcement as a “cynical attempt to shore up SA Liberal seats at the next election”.

“So rushed was this announcement that neither Mr Turnbull or Senator Payne could answer basic questions such as how many Offshore Patrol Vessels would be built in Adelaide,” Opposition defence spokesman Stephen Conroy said.

There is disagreement over whether Adelaide is capable of coping with the overlapping OPV and Future Frigate projects to build all the ships; but Industry Minister Christopher Pyne said the OPV project paled in comparison to the much larger scale of the frigates.

“This is very good news for the workers at Osborne ... it means when the AWDs finish over the next couple of years the OPVs will start in SA. When the Future Frigates are ready to begin that project will move to Henderson in WA then the Future Frigates will take up where the OPVs left off,” he said.

“The Valley of Death can be avoided.”

Prime Minister Malcolm Turnbull and Defence Minister Marise Payne announce the shipbuilding project. Picture: AAP Image/Mick Tsikas

Premier Jay Weatherill and Defence Industries Minister Martin Hamilton-Smith said South Australians could “celebrate” the news.

Mr Weatherill said it was “a fantastic day for SA hi-tech manufacturing jobs”.

Australian Made Defence spokesman Chris Burns said it was a step in the right direction but that an explicit national shipbuilding plan was still needed.

Independent Senator Nick Xenophon said the announcement was welcome “at first blush” but that there were a number of “unanswered questions”. He believes all 12 could be built in Adelaide and is concerned the Government will change its mind and decide to send all the work to WA.

Analysis: Workers get reprieve but subs remain goal

Cameron England

AN Australian government has finally made a decision which will ensure the South Australian ship building industry doesn’t keel over and die because of neglect and financial malnutrition.

Without action, the ASC workforce currently building Australia’s air warfare destroyers would have dwindled, potentially to zero, as the AWD building project wound to a close in 2019.

The program has already peaked and there are regular reports of more workers being let go.

The announcement that the offshore patrol vessel build will start here in 2018, with Future Frigate work to follow in 2020, gives the workers at the ASC shipyard at Osborne, and those soon to lose their jobs at Holden, hope for the future.

The projects will help secure more than 2500 jobs, but it must be pointed out how much of the work actually goes to ASC is still up in the air.

While yesterday’s news was undoubtedly positive, the main game remains a decision on where the nation’s $50 billion Future Submarines project will be based.

Conversations with the three bidders over the past week have indicated a strong commitment to creating jobs in Australia, and collaborating closely on training and technology matters. The Federal Government, however, has not yet shed any light on whether it would pursue an Australian-based or hybrid build, including offshore input.

Spending the lion’s share of the submarine money in South Australia would be a huge boon to not only those directly involved in the shipbuilding industry, but the thousands of jobs supported through suppliers which feed into such projects.

A continuous build process, which consolidates skills and indeed an entire industry in one or two regions. is a commonsense approach; and an announcement that such a strategy will be pursued, before the election, would put fears over the “valley of death” to bed once and for all.