SYDNEY – The Australian government has begun its final evaluation of bids from Japan, Germany and France to choose the maker of its next-generation submarine.
Canberra is expected to make its decision by the end of June after closely examining the construction proposals of the three countries.
While the specifics have not been disclosed, there is speculation Japan is leading its two rivals in terms of cost.
Australia plans to construct 8 to 12 new submarines in a project worth 20 billion Australian dollars. Including long-term maintenance expenses, the total cost is seen ballooning to about AU$50 billion.
Starting in the mid-2020s, the country will replace its aging Collins-class submarines with the next-generation ships.
According to local media reports, the Australian government will likely be able to squeeze construction expenditures by more than AU$5 billion due to the heated competition.
The Japanese government has asked Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd., the joint makers of the Maritime Self-Defense Force’s Soryu-class submarine, not to place priority on profitability in the bidding war. As a result, they could possibly have an edge over the German and French companies, informed sources said.
Political leaders in the competing countries are also working hard to secure the Australian contract.
Prime Minister Shinzo Abe emphasized the quiet non-nuclear submarine’s advanced technology and other benefits to Australian counterpart Malcolm Turnbull when they met in Tokyo last month during the leader’s first visit to Japan since taking office in September.
Meanwhile, German Chancellor Angela Merkel has reportedly warned the Australian side that Canberra’s relations with China could deteriorate if it awards the submarine contract to Japan, whose ties with an increasingly assertive China have recently been strained.
In April 2014, the Abe administration lifted the government’s long-standing blanket ban on arms exports by adopting new guidelines on defense equipment transfers abroad. If the Japanese bid is successful, it would mark Tokyo’s first large-scale defense export deal under the guidelines.
Still, there is unease within sectors of Japanese society over arms exports. During Turnbull’s visit to Japan, a demonstration to oppose submarine sales to Australia took place.