Australia has contracted Spanish shipbuilder Navantia to build two replacement replenishment ships for the Royal Australian Navy.
Although the ships would be built in Spain and not in Australia, what the government opposition objected to, Australian Defence minister Marise Payne said that more than $130 million would go to Australian industry.
Construction of the two ships will cost the Australian Navy $640 million while an additional five-year sustainment contract, also signed with Navantia, ammounted to $250 million.
The replenishment ship upkeep works will be performed in Australia.
Australia had previously appropriated $1bn – $2bn for the first two replenishment ships with all additional work.
Australia’s current supply ship HMAS Success will reach its end of life in 2021 and needs to be replaced as a matter of priority.
This is not the first time Navantia is working for the Australian government as the company was contracted to build two landing helicopter dock ships HMAS Canberra and Adelaide in 2007.
The Australian Defence White Paper says that a third replenishment or additional logistics vessel similar to HMAS Choules would follow in the late 2020s.
South Korea’s Daewoo Shipbuilding and Marine Engineering with its Aegir class AOR was the other competitor in this bid.