NEWCASTLE’S Forgacs shipyard is confident it will win work from the federal government’s new $40-billion naval ship-building program announced on Tuesday in Adelaide.
In the South Australian capital for a cabinet meeting, Prime Minister Tony Abbott confirmed strongly held speculation that the government would get its own shipbuilder, ASC, to build a new fleet of nine naval frigates.
Mr Abbott also said the government had brought forward a contract to replace the Armidale class patrol boats – the major vessels used in border protection – with a new fleet of ‘‘offshore combat vessels’’ from 2018.
Early reports on Tuesday said these ships would also be built in Adelaide but a spokesperson for Defence Minister Kevin Andrews said this was not necessarily the case, and that site selection would be part of the tender process.
The government is also yet to say where a new fleet of submarines to replace ASC’s Collins class would be built, although Mr Abbott addressed the issue in some of his comments.
‘The frigates are coming as the first prize and one way or another the subs will be coming as a further prize,’’ Mr Abbott said on Tuesday.
‘‘You shouldn’t assume that the subs won’t happen here.’’
Although the government promoted the announcement as a new era for Australian naval shipbuilding, it also confirmed that the existing structure – where a major shipbuilder would subcontract parts of each contract to yards in other states – would remain.
This arrangement suits Newcastle’s Forgacs Group, a privately-owned company that has specialised in recent years in building smaller vessels by itself and in building hull modules of larger naval vessels on subcontract to the nation’s two biggest shipyards in Osborne, South Australia, and Williamstown in Victoria.
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Forgacs chairman Peter Burgess welcomed the announcement, saying the company looked forward to the detail that would follow.
Tuesday’s announcement was the government’s response to the so-called ‘‘valley of death’’ facing Forgacs, ASC and the Williamstown operator, BAE Systems, as they waited for new contracts from Canberra.
Mr Abbott blamed Labor for the problem but Opposition Leader Bill Shorten and former defence minister Joel Fitzgibbon both blamed the Coalition for not moving fast enough upon gaining office in 2013.
ASC (formerly known as Australian Submarine Corporation) employs about 2600 people at its Osborne shipyard.
Responding to the announcement, the company said it had generated ‘‘significant improvements’’ in the Hobart class destroyers – which Forgacs is also helping to build – and in maintaining the Collins class submarines.
Mr Abbott conceded that the government’s plan did not entirely end the ‘‘valley of death’’.
The national naval shipbuilding workforce is expected to halve to about 1000 once the Hobart destroyers are finished but Mr Abbott said it would be back up to 2500 jobs by 2020.
While Labor and the Coalition argued over who was to blame for the ‘‘valley of death’’, Mr Burgess said the important thing was to get the new ships under way as soon as possible, but not before all of the design work had been properly done.
Mr Burgess said Forgacs had a bid in with French company Thales to build a fleet of Pacific nation patrol boats, which is part of Australia’s foreign aid commitment.
He said it and Thales would also bid for maintenance work on 13 Armidale class patrol boats that were ‘‘in need of immediate repair’’.
The Defence Minister’s spokesman said more would be said about the maintenance contract in the coming weeks.
He said a Defence White Paper setting out defence commitments in detail would be released before the end of the year.
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