SYDNEY—In a bid to boost its chances of winning a $20-billion
submarine contract from Australia, ThyssenKrupp Marine Systems
signaled it could create shipyard jobs and turn the country into a
submarine industry hub for much of Asia.
TKMS is competing with bidders from Japan and France to supply
eight submarines in what is expected to be one of Australia's
single largest defense contracts. The German company has proposed
building the submarines in Australia and says it is speaking with
potential local partners to provide parts and materials, all of
which would help the country's struggling shipyards remain
viable.
Jim Duncan, director of TKMS Australia, said he envisaged
countries such as Indonesia, Thailand and Singapore drawing on
Australia for high-tech maintenance of their submarines. "We've got
submarines right around the Asia-Pacific rim and the Indian Ocean
rim, and Australia makes a lot of sense as being a service center
for some of those customers," he said in an interview with The Wall
Street Journal.
TKMS is offering its new Type 216 submarine, designed to meet
Australian requirements that include long range capability and
endurance to suit the country's vast ocean territory. It is up
against a conventional version of the 4,700-metric ton Barracuda,
made by France's DCNS, and Japan's 4,700-ton Soryu-class submarine,
which is built by Mitsubishi Heavy Industries and Kawasaki
Shipbuilding Corp. and is seen as the front-runner.
The Australian government is evaluating the proposals and will
make a decision later this year. Prime Minister Tony Abbott is
under pressure to seal a deal that ensures the submarines are built
in Australia, as part of an election promise to protect local
manufacturing jobs.
In a soon-to-be released defense policy paper, Mr. Abbott's
Conservative government is expected to cut the size of the order to
eight submarines from 12 as Australia's resources-focused economy
has been hit by falling commodity prices and a sharp slowdown in
mining investment.
In a separate interview Tuesday, TKMS Australia Chairman John
White told The Wall Street Journal that it is his strong preference
to build submarines in Australia. "We have total confidence to
design and plan and propose to build all submarines in Australia,"
he said. "That's a pretty compelling offer."
TKMS has offered to take a stake in Australian government-owned
naval shipbuilder ASC if it wins the submarine contract, and to
transfer manufacturing know-how to local companies. France's DCNS
has also said it would share technological knowledge if it was
awarded the contract. Japan, however, is reluctant to build
submarines in Australia as it seeks to turn itself into a weapons
exporter for the first time since World War II.
Submarines are at the heart of an undersea arms race in Asia as
countries including Vietnam, Thailand, Singapore and Indonesia
witness China's rise and increasing assertiveness. More than half
the world's submarines will soon operate the region, which is vital
to world maritime trade.
Australia plans a wider military buildup that includes new
destroyers, frigates, amphibious carriers, stealth fighters and
armored vehicles, in a 275 billion Australian dollar (US$202
billion) shopping list.
Write to Rob Taylor at rob.taylor@wsj.com
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