Locals snubbed in favour of French for artillery shells plant
The Albanese government will snub LNP-linked defence company Nioa to hand a major new contract to produce 155mm artillery shells to a French rival at the centre of a corruption probe.
The Albanese government will snub LNP-linked defence company Nioa to hand a major new contract to produce 155mm artillery shells to a French rival at the centre of a corruption probe.
Defence Industry Minister Pat Conroy will use a National Press Club speech on Wednesday to announce the construction of a new forging plant to produce the world’s most in-demand artillery shells.
It’s understood the plant will be built at the federal government’s munitions facility in the northeastern Victorian city of Benalla, and be run by French-owned Thales Australia under a contract that could be worth hundreds of millions of dollars.
The move will be a major blow to Queensland-based Nioa, which had contested the tender and is already producing 45,000 155mm shell casings a year at its $90m forging plant in rural Maryborough.
The facility, a joint venture with Germany’s Rheinmetall, received $28m in federal government funding to establish. Nioa has been a major donor to the LNP, and its founder Rob Nioa is close to Peter Dutton.
It comes as the National Anti-Corruption Commission examines allegations a former Defence official who went on to work for Thales handed the company confidential information before it was awarded a $1.2bn munitions contract.
The matter was referred to the NACC after the Australian National Audit Office alleged “unethical conduct” in the awarding of the ten-year contract to run the Benalla munitions facility and another in the southern NSW town of Mulwala. A preliminary investigation by Defence was reportedly unable to substantiate the allegation.
The 155mm artillery shells are used by Australia, the US and other key international partners, but global stocks have been heavily depleted by donations to Ukraine.
Mr Conroy will also release details of the government’s guided weapons and explosive ordnance plan, which will receive $21bn in direct funding over the coming decade.
With the government’s $35bn investment in new long-range missiles and targeting systems, and up to $18bn in missile defence, funding for guided weapons capabilities is set to hit $74bn over the coming decade.
Mr Conroy will argue the investment will deliver major capability improvements, boosting the navy’s strike range from 200km to more than 2500km.
The army will be able to strike targets out to 1000km from its current 40km, while the RAAF will increase its strike range from 100km to 900km.
He will frame national security as the government’s “highest priority”, amid a “new missile age”.
“Over the decades, missile technology has evolved, especially through precision guidance capabilities,” Mr Conroy will say.
“More states now wield them – and they are no longer the sole preserve of states.
“So, as well as acquiring more missiles, more rapidly from our partners, we need to build a new Australian guided weapons manufacturing industry.”
Mr Conroy will also use the speech to take a political swipe at the Coalition, accusing it of producing just “two flimsy media releases” on its guided weapons manufacturing plan.
“Unlike the Coalition, the Albanese government has fully-funded, highly-detailed and well-advanced policies,” he will say.
“These policies will provide the Australian Defence Force with the missile capabilities it needs to keep our country safe by deterring any conflict before it begins.”
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