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France wins A$50bn Australia submarine contract | France wins A$50bn Australia submarine contract |
(about 2 hours later) | |
France has won a A$50bn (€34bn; £27bn) contract to build 12 submarines for the Australian Navy, beating bids from Japan and Germany. | |
The deal, announced by Prime Minister Malcolm Turnbull, is Australia's largest-ever defence contract. | |
The Shortfin Barracuda submarines will be built in Adelaide using Australian steel, creating 2,800 jobs, he said. | |
Japan, which had been a frontrunner in the contest, said the decision was "deeply regrettable". | |
Defence Minister Gen Nakatani said Japan would "ask Australia to explain why they didn't pick our design". | |
Mr Turnbull said the decision, the result of a 15-month bidding process, was "securing the future of Australia's navy over decades to come". | |
"Australian workers will be building Australian submarines with Australian steel." | "Australian workers will be building Australian submarines with Australian steel." |
Why does Australia want new submarines? | |
The government says the existing Collins Class submarine fleet is ageing and in need of replacement. | |
A strong submarine capability is seen as vital for an island nation like Australia to conduct surveillance operations, counter growing military strength from countries like China and to support Australian allies. | |
What submarines will DCNS be building? | |
The Shortfin Barracuda is a 4,500-tonne conventionally powered submarine. It is closely related to the nuclear-powered Barracuda which weighs 4,700 tonnes. | |
DCNS has said the full details are confidential, but the vessel is know to be more than 90m long and to feature an advanced pump-jet propulsion system that is supposed to be quieter than propeller propulsion systems. | |
Mr Turnbull said the French bid "represented the capabilities best able to meet Australia's unique needs". | |
What were the other bids | |
The Japanese bid, with a consortium led by Mitsubishi Heavy Industries Ltd, proposed a version of its 4,000-tonne Soryu-class submarine, lengthened by between 6-8m. | |
Mitsubishi said it was "deeply regrettable that Japan's capabilities were not sufficiently conveyed". | |
The German bid, from company TKMS, offered a 4,000-tonne version of an existing 2,000-tonne Type 214 class submarine. | |
Relationship with Japan | Relationship with Japan |
The French bid received unanimous support from the various experts in the government's competitive evaluation process, Defence Minister Marise Payne said. | |
Japan was an early frontrunner to win the contract, thanks to former Australian Prime Minister Tony Abbott's close relationship with his Japanese counterpart, Shinzo Abe. | |
But its bid is said to have foundered because of Japan's inexperience in building military equipment for export. | |
The Japanese constitution was changed in 2014 to allow the export of military hardware. The lucrative submarine deal would have been its first such deal and a major victory for Mr Abe. | |
The Japanese government was also reportedly keen to further deepen its military ties to Australia as a counter to China's rise. Shared military technology would increase interoperability between the Japanese and Australian fleets. | |
The decision to reject the bid is seen as having ramifications for Australia-Japanese relations. | |
Mr Turnbull said he had spoken to Mr Abe and they were both "thoroughly committed to the special strategic partnership between Australia and Japan which gets stronger all the time". |