Army vehicles war heats up
A STATE-of-Origin-style war of words is threatening to influence the decision on a $5 billion defence contract, which could create thousands of jobs in Victoria.
The lucrative Land 400 contract — which would turn Melbourne’s former Holden factory into a plant for hi-tech war machines — is at the centre of a fierce lobbying campaign between Victorian and Queensland federal MPs.
The Turnbull Government is expected to decide early next year whether the tender goes to defence contractor BAE Systems, which will base its bid at the Fishermans Bend site, or German-based Rheinmetall Defence, which plans to assemble its armoured vehicles in Queensland’s southeast.
Industry sources now fear the contract could be turned into a massive pork-barrelling of Queensland because of the Turnbull Government’s precarious position in the polls and the number of marginal seats.
Victorian federal government MPs have stepped up a campaign to ensure the contract goes south, amid concerns it could be poached by the influential “white shoe brigade”.
Following intense public campaigning from “Team Queensland” MPs on Rheinmetall’s behalf, Victorian Liberal and Nationals MPs met in Canberra last week with BAE non-executive chairman Dr Ian Watt and Victoria’s defence ambassador Greg Combet.
BAE flags at least 500 direct manufacturing and supply chain jobs in the proposal, but government modelling shows the industry could gain up to 2000 jobs, and contracts for downstream manufacturers.
BAE, through its partner Marand Precision Engineering, would manufacture the vehicle’s hull in Victoria while Rheinmetall would manufacture its hull in Germany.
Victorian Liberal MP Sarah Henderson, who has led the campaign among her colleagues, said the state offered the best vehicle manufacturing expertise in the nation.
“In terms of supporting local jobs and Australian workers, BAE is leaps ahead of its competition” she said. “It will deliver a vehicle that comprises 90 per cent Australian industry content.”
Both designs have undergone intense trials ahead of a decision on the maker of 225 combat reconnaissance vehicles, which will replace the Australian Light Armoured Vehicles now in service.
While the quality of the vehicle will ultimately decide the contract winner, the determination process will also evaluate value-for-money, Australianmade content and risk management. But one industry source said, “Don’t discount politics influencing the process. It shouldn’t, and hopefully won’t, but anything is possible”.