British BAE Systems is the winner of the multi-million pound contract from the Australian government. The contract entails building of 9 warships which translates to a significant victory for military exports from Britain. BAE systems managed to beat Italy’s Fincantieri SpA and the Spanish Navantia rivals to win the £20bn spending programme
The building of ships will be in Australia but will be similar to the Type 26 design that the company is making for the Royal Navy. Theresa May says that the crossing of the deal serves as a significant boost for the UK economy. The prime minister added that the deal was a reflection of the government’s plan to enhance relationships with allies such as Australia even as the UK prepares to exit the EU.
The ships will be built in Adelaide and aims at creating up to 4,000 jobs in Australia as part the investment programme. The Australian government says that the Hunter class ships will equip the Defence Forces in Australia with maximum levels of deterrence in an era of global uncertainty. The design of the ships will include the fitting of long-range anti-missile protection systems.
The overall budget amounts to the £20bn but only a part of it will go to BAE systems for the designing and building of the frigates. The Chief Executive of BAE systems, Charles Woodburn, says that he is proud of their submarine warfare design that is bound to enhance the development of a world-class shipbuilding industry in Australia.
Defence analysts argue that the deal is a representation of the enormous success of the British naval exports. The editor of industry newsletter Defence Analysis, Francis Tuta, indicates that the UK has had a poor export record in the past for warship sales but the deal represents a massive change. He added that Canada is likely to be influenced by Australia’s decision as it prepares to order warships from Britain later in the year.
Mr. Tusa says that the selling of the designs to other countries will enable the spreading of costs of design, production and other elements of the Frigate. It will therefore help significantly bring down the cost of the Type 26 to the Royal Navy.
Mr. Tusa further indicates that the deal will not only benefit BAE systems but also other small and medium-sized companies in the UK that will most likely win orders for the technology required on the Australian ships. Additionally, companies that are already distributing the UK government’s order of the Type 26 will be better placed to supply the Australian orders.