Australia kicks off $39 billion submarine tender

Australia has invited Germany, France and Japan to pitch for a contract to build its new submarine fleet, kicking off a contentious A$50 billion ($38.8 billion) project which has become a political football at home. Signs of progress on the long-delayed project bode ill for Sweden despite a proposal from Australia's opposition party to overturn the Nordic country's earlier exclusion from the lucrative tender. Speaking at a conference of Australian naval officials and politicians in Adelaide yesterday, Defence Minister Kevin Andrews said Germany, France and Japan had emerged as potential "international partners" for the project to replace Australia's six ageing Collins-class vessels.

Andrews added that a "competitive evaluation" would take at least 10 months, after which the Defence Department would advise the government on preferred bidders.

An industry source in Australia said a letter had been prepared for bidders containing requirements including that a concept design be submitted within six months and details on how bidders would involve Australian industry in the programme. Germany's ThyssenKrupp Marine Systems and France's state-controlled naval contractor DCNS have both expressed interest in the tender and said they would build in Australia. Harry Dunstall, chief of the Australian military's Defence Materiel Organisation, told the conference that after the bidding contracts had been signed, there would be an eight-month period during which the companies would prepare their preliminary design proposal. After originally promising to build the fleet of up to 12 submarines, Prime Minister Tony Abbott backpedalled. Sources then said Japan was in the box seat to sell off-the-shelf submarines to Australia, marking what would be Tokyo's re-entry into the global defence export market and strengthening ties between two of Washington's strongest regional allies.