Britain’s BAE Systems to build Australia’s $35B warships

British defence company Bae Systems has won the $35 billion contract to build Australia’s largest fleet of new navy warship. The nine new ships will be built in Adelaide and will follow the Type 26 Global Combat ship design by the company called The Hunter class frigates.

The ships will start production in 2020 and will begin entering service late in the year. The Hunter class frigates will eventually replace the current Anzac ships that have been in service since 1996. Australian government-owned ASC Shipbuilding will become a subsidiary of BAE Systems during the build.

The contract is deemed a win for both Australian and UK economy. Australian Prime Minister Malcolm Turnbull has boasted it would create more than 4,000 direct job around the country. The ships, he said, would be built 100 percent with Australian steel.

“We know that there are going to be 4,000 jobs for this project alone, 1,500 direct here in Osbourne, 2,500 through the supply chain around Australia. Overall, the shipbuilding plan will have 15,000 jobs created, again around 5,000 directly here in South Australia and the rest throughout the country,” Turnbull said.

Explaining the need for the record-high multibillion-dollar contract, the PM said it’s to “keep our nation safe and secure.”

He said, “We are in the world with heightened risks. We need to have the capabilities to defend Australia regardless of what may come. But we also need to have the capabilities to build those ships, to build all of the resources and capabilities our armed forces need in Australia,” he said. “So far as we can, we are going to ensure that every dollar that is spent, every job that is created, so far as we can do that, is going to be done here in Australia.”

British Prime Minister Theresa May said the export of a British design would be an “enormous boost” for their economy. And as the UK is set to exit the European Union, May said the Australian deal was an example of opportunities that could open up for them after Brexit.

“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,” she said (via the Guardian). “We have always been clear that as we leave the EU, we have an opportunity to build on our close relationship with allies like Australia. This deal is a perfect illustration that the government is doing exactly that.”

BAE won the deal over competitions from Spain’s Navantia and Italy’s Fincantieri.