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France wins A$50bn Australia submarine contract France wins A$50bn Australia submarine contract
(about 2 hours later)
France has been awarded a A$50bn (€34bn; £27bn) contract to build 12 submarines for the Royal Australian Navy. France has won a A$50bn (€34bn; £27bn) contract to build 12 submarines for the Australian Navy, beating bids from Japan and Germany.
Australian Prime Minister Malcolm Turnbull announced at a press conference on Tuesday that France had beaten bids from Germany and Japan. The deal, announced by Prime Minister Malcolm Turnbull, is Australia's largest-ever defence contract.
The submarines will be built in Adelaide creating 2,800 jobs, he said. The Shortfin Barracuda submarines will be built in Adelaide using Australian steel, creating 2,800 jobs, he said.
The decision was based on a 15-month competitive evaluation process that started in February 2015. Japan, which had been a frontrunner in the contest, said the decision was "deeply regrettable".
"This is securing the future of Australia's navy over decades to come," Mr Turnbull said. 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."
Japan was an early frontrunner to win the contract, thanks to former Australian prime minister Tony Abbott's close relationship with Japanese Prime Minister Shinzo Abe. Why does Australia want new submarines?
But Australia's largest-ever defence procurement was awarded to French company DCNS, which proposed to build a modified version of its Barracuda submarine called the Shortfin Barracuda. The government says the existing Collins Class submarine fleet is ageing and in need of replacement.
The French bid received unanimous support from the various experts in the government's competitive evaluation process, Defence Minister Marise Payne said. 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.
The Shortfin Barracuda is a 4,500-tonne, conventionally powered submarine, whereas the Barracuda weighs 4,700 tonnes and is nuclear powered. What submarines will DCNS be building?
The French design features an advanced pump-jet propulsion system that is supposed to be quieter than propeller propulsion systems. 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.
The Japanese government's bid with a consortium led by Mitsubishi Heavy Industries Ltd proposed building a version of its 4,000-tonne Soryu-class submarine, lengthened by between 6-8m. 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.
The German bid, from company TKMS, offered a 4,000-tonne version of an existing 2,000-tonne submarine. Mr Turnbull said the French bid "represented the capabilities best able to meet Australia's unique needs".
Work on the submarines, which will replace Australia's aging fleet of Collins Class vessels, is expected to continue into the 2050s, according to a Defence White Paper released earlier this year. 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 JapanRelationship with Japan
The decision to reject the Japanese bid is seen as potentially having ramifications for Australia and Japan's relationship. The French bid received unanimous support from the various experts in the government's competitive evaluation process, Defence Minister Marise Payne said.
Mr Abe was this week reported to be working behind the scenes to shore up the deal, which is said to have foundered because of Japan's inexperience in building military equipment for export. 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.
The Japanese constitution was changed in 2014 to allow the export of military hardware and the lucrative submarine deal with Australia would have been a major victory for Mr Abe. But its bid is said to have foundered because of Japan's inexperience in building military equipment for export.
The Japanese government was also reportedly keen to further deepen its military ties to Australia as a counter to China's rise. 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.
Shared military technology would increase interoperability between the Japanese and Australian fleets. 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.
Mr Turnbull said he had spoken to Mr Abe and was fully committed to the special strategic relationship between Japan and Australia. 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".