Australia announced Tuesday that French company DCNS had beat bidders from Japan and Germany to build the next generation of submarines in Australia's largest-ever defense contract. DCNS, Germany's ThysennKrupp Marine Systems and Japan's Mitsubishi Heavy Industries were in the running to build 12 conventional submarines that the Australian navy expects will cost at least Au$56 billion ($43 billion), according to AP. Prime Minister Malcolm Turnbull said the French-designed submarines would be built in the Australian manufacturing hub of Adelaide.
"The French offer represented the capabilities best able to meet Australia's unique needs," Turnbull told reporters in Adelaide. The Japanese bid was the early favorite and the contract promised to become Japan's first fully fledged military technology transfer since World War II. "The decision was deeply regrettable," said Japanese Minister of Defense Gen Nakatani, according to AFP. "We will ask Australia to explain why they didn't pick our design," he added. Japan's chances appeared to diminish when government lawmakers dumped Tony Abbott as prime minister in September and as the seasoned European exporters made their pitches.
Abbott saw the Japanese bid as having a strategic value by building on ties with Japan and the United States.
But others warned that Japan's long-term cooperation in the submarine contract might hinge on Australia forming an alliance that could bring Australia into conflict with China, Australia's most important trade partner. The United States did not publicly endorse any option, saying it was Australia's decision. France offered a diesel-electric version of the Barracuda-class nuclear submarine under construction for the French navy. Japan proposed a longer version of its Soryu-class diesel-powered propulsion system with advanced stealth capabilities. Germany offered a larger variation of its Type 214 submarine made for Australian specifications called a Type 216.
The French bid offered the same pump jet propulsion that gave its nuclear submarines their advanced stealth capacity. Other diesel-electric submarines are too small to be fitted with the same stern-heavy technology. Australia's Shortfin Barracuda Block1A will be 97 meters long and weight 4,500 metric tons - 2.5 meters shorter and 200 metric tons lighter than its French nuclear cousin.
The German bid had highlighted their decades of experience in building submarines for several navies and had publicly offered to build the entire fleet in Adelaide for Au$20 billion - less than half the navy's expected cost. It promoted as its edge over competitors its partnership with German engineering firm Siemens which would have provided the submarines' software and promised to create a digital shipbuilding center in Adelaide.
Australia already has one of the world's largest conventional submarines, the Australia-built Collins class, and the navy insisted that its replacement at least match its range of 12,000 nautical miles. At 3,100 metric tons and 77 meters, the Collins will be dwarfed by the next-generation Shortfin Barracuda.
Defence Minister Jean-Yves Le Drian said Tuesday that a contract snagged by France to design and build Australia's next generation of submarines would create thousands of jobs in the country.
France fended off competition from Germany and Japan to win the 34 billion euro contract to build 12 new subs in Australia, as well as maintaining the equipment and forming crew. Most French jobs to be created as a result of the contract would be in northwestern Cherbourg, where France builds submarines, as well as the cities of Brest, Lorient and Nantes. French specialist naval defence contractor DCNS had been in competition for the contract with Germany's ThyssenKrupp Marine Systems (TKMS) and a Japanese consortium led by Mitsubishi Heavy Industries. The contract is the latest boost to France's defence industry, after the country last year secured the first-ever export of its Rafale fighter jets to Egypt and Qatar.