Submarine project’s offshoring will drain Australian economy by 16 billion dollars, warns defence expert

With the crucial deadline to finalise the bidder for Australia's submarine project nearing in September, an Australian defence expert has warned that any decision to allow the new submarines being built overseas will drain the economy by AU$16 billions of taxpayer money.

Chris Burns, head of the South Australian Defence Teaming Centre and spokesman for the Australian Made Defence Campaign told federal MPs in Canberra that the AU$50 billion submarine project is a big opportunity to invest in the country's future. "This money could be a major stimulant for the Australian economy," he added, reports 9 News.

Japan’s position

In finalising the main bidder, Japan’s stand is being keenly watched. Tokyo has to prove that it can build the boats in Adelaide. If it fails to convince that it is able to construct Japanese submarines within Australia, chances are that it will lose the bid to Germany or France. So far, Japan has not committed on building all the submarines in Australia. The condition is that all the potential bidders from Japan, Germany and France have to present the defence ministry with an 80 percent plan on how they would build the submarines, reports The Australian.

Japan is required to produce 22 documents by September 28 with a building strategy that must give options to build all the submarines in Adelaide. But the Japanese government has taken the stand that it can build all the submarines in Australia with the "Australian industry's involvement in the project.”

However, it is unlikely that the Abbott government will choose a bidder who cannot build some or all the submarines in Adelaide. Sensing this, German and French shipbuilders such as TKMS and DCNS have expressed their readiness to build all the submarines in Adelaide. Japan also sent a high-level industry delegation to Australia, scouting for industry partnerships to build the submarines within Australia. Australian Defence officials also traveled to Germany and France and they are expected to visit Japan soon for updates on the Japanese bid.

Secrecy

The Wall Street Journal in a report noted that Japan’s Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd, makers of the Soryu-class submarines have not been very visible in the meetings with Australian officials. It noted that they skipped a government submarine-planning conference in March and refused to appear before a parliamentary hearing in July.

For Adelaide, the capital of South Australia, the submarine project is very crucial, as the investment can salvage scores of local jobs. In case, the successful bidder decides to build the submarines outside Australia, there will be heavy job loss.

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