Australia awards $26-B next-generation warship contract to BAE

SYDNEY (AFP) – Australia awarded a $26-billion contract to build a new generation of warships to British defense giant BAE Systems on Friday, as the Pacific nation undertakes an ambitious naval program in part to counter China.

BAE's Global Combat Ship, to be officially known as the Hunter class, beat off competition from Italian company Fincantieri and Spain's Navantia SA.

The frigates will be “the most advanced anti-submarine warships in the world” and underpin the country's security for decades to come, said Australian Prime Minister Malcolm Turnbull.

“The Hunter class will provide the Australian Defense Force with the highest levels of lethality and deterrence our major surface combatants need in periods of global uncertainty,” he said.

“They will have the capability to conduct a variety of missions independently, or as part of a task group, with sufficient range and endurance to operate effectively throughout the region.”

A key element of the contract was that a high-level of construction must take place in Australia, in a bid by Canberra to boost domestic jobs in the shipbuilding industry.

The ships will be designed by BAE and built using Australian steel by the government-owned ASC Shipbuilding in Adelaide, with 4,000 jobs created.

The company will become “a subsidiary of BAE Systems” during the build to “ensure BAE Systems is fully responsible and accountable for the delivery of the frigates,” before reverting ownership.

Britain said the deal was “a result of four years of intensive government engagement,” and hailed it as a boost for its post-Brexit prospects.

“The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering and demonstrates what can be achieved by UK industry and government working hand-in-hand,” said Prime Minister Theresa May.

“We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the government is doing exactly that.”