New ship building projects in South Australia irks Victoria: Minister says Submarine Corp sell off not ruled out

The Australian government’s recent decision to invest AU$40 billion in shipbuilding projects to strengthen South Australia’s ship building base has caused consternation among other ship building states such as Western Australia and Victoria. At the same time, the talk of the state-owned Submarine Corporation getting sold or privatised also picked up momentum.

Prime Minister Tony Abbott had announced the multi billion dollar project for building future frigates and corvettes in Adelaide with additional AU$49 billion earmarked for a submarine fleet that may be built offshore. Victoria’s concerns were expressed by its premier Daniel Andrews, who alleged that Mr Abbott's offer of warship plan in South Australia will slash 1000 jobs in Melbourne.

Obviously, Mr Abbott’s announcement of new frigates and offshore patrol boats in Adelaide can salvage 2500 jobs. Andrews said his state's shipbuilders are feeling let down. “I do fear that Mr Abbott is far more concerned with Christopher Pyne's job than he is with the jobs of hundreds of Victorian shipbuilders, and that is an absolute disgrace if that is what is going on here,” Andrews noted.

ASC’s future

However, Pyne, in whose political constituency the new ship building project will be coming up, told Sky News that the option of state owned Australian Submarine Corporation being sold or privatised is very much alive. He made clear that selling ASC as an option under the winning bid for new subs because discussion on those lines has been on for the last 20 years. The Australian Submarine Corporation, rechristened as ASC Pty Ltd in 2014, is an Australian government enterprise involved with Australian naval shipbuilding, Based in Adelaide, South Australia, it is known for the construction of the Collins-class submarine fleet run by the Royal Australian Navy and is now building Hobart-class destroyers.

Constant review

The minister noted that a review of the “operations of the Australian Submarine Corporation that's been announced and we'll see where that leads us. We're not ruling anything in or anything out.” Pyne also justified the option of off shoring submarines and asking bidders a separate costing in building vessels entirely overseas. He said the government's chief concern was the Australian taxpayer. He noted that even in the worst case scenario of subs being built overseas, at least “$30 billion of the $50 billion will end up being spent in Australia because maintenance and sustainment needs to be done in Australia and almost all of that work would be done in Adelaide.”

Job loss

Meanwhile, ASC’s woes are up with more job loss after 100 contractor jobs were axed from it. Australian Manufacturing Workers' Union assistant secretary Colin Fenney said the contractors included fabricators and boilermakers on the Air Warfare Destroyer Project. Earlier in May, 120 contractors lost their jobs.

Fenney blamed the federal Government for its failure in following up with the option in building a fourth Air Warfare Destroyer despite announcing it in the 2013 Defence white paper. In May 2015, ASC launched the first of the three AWDs it built in Adelaide, which had been attracting criticism for the delayed delivery as the scheduled delivery was meant for 2014.

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