Austal will not take part in Australian OPV construction after all

Australian shipbuilder Austal will not be taking part in the construction of 12 offshore patrol vessels for the Royal Australian Navy, according to a May 11 statement from Luerssen – the prime contractor on the project.

The announcement follows months of negotiations between the two sides.

In November 2017 the Australian government selected Luerssen as the prime contractor on the project and asked it to explore options “to leverage the wider shipbuilding experience base at Henderson in Western Australia”, potentially opening an option for Austal to participate in the Western Auastralia build program, subject to commercial negotiations.

On Friday, Luerssen announced negotiations between Austal, which have been underway since December 2017, have not been able to reach a viable commercial agreement.

Australian defense industry minister Christopher Pyne said Luerssen will build the OPVs in collaboration with ASC and Civmec’s Forgacs, the two companies it had originally partnered with.

“The Turnbull government’s commitment to construct 10 OPVs at Henderson, as part of the continuous shipbuilding program for minor war vessels in WA, remains unwavering,” said minister Pyne.

Civmec will soon list on the Australian stock market and will have a key role as a shipbuilder in WA. It’s estimated the project will directly employ up to 1000 Australian workers – 400 direct and a further 600 in the supply chain, minister Pyne further said in the statement.

The first two vessels will be built in South Australia at the Osborne Naval Shipyard starting this year and the other 10 will be constructed in Western Australia from 2020.

In addition to ASC and Civmec, Luerssen has entered into agreements with Saab and L3 for the delivery of situational awareness systems, an electro-optical fire control director, and integrated communications, bridge, navigation and platform management systems.