CANBERRA - Australia announced Tuesday that French company DCNS has beat out bidders from Japan and Germany to build the next generation of submarines in Australia’s largest-ever defense contract.
DCNS, Germany’s ThysennKrupp Marine Systems and Japan’s Mitsubishi Heavy Industries were in the running to build 12 conventional submarines that the Australian navy expects will cost at least 56 billion Australian dollars ($43 billion).
Prime Minister Malcolm Turnbull said the French-designed submarines would be built in the Australian manufacturing hub of Adelaide.
“The French offer represented the capabilities best able to meet Australia’s unique needs,” Turnbull told reporters in Adelaide.
“I want to thank TKMS and the government of Japan for their proposals, which were of a very high quality. However, the recommendation of our competitive evaluation process … was unequivocal — that the French offer represented the capabilities best able to meet Australia’s unique needs,” he added.
Addressing the issue of the failed bidders, Turnbull said, “As far as Japan is concerned…both Prime Minister (Shinzo) Abe and I, and our respective governments and, I believe, our respective nations are thoroughly committed to the special strategic partnership between Australia and Japan, which gets stronger all the time.”
In Tokyo, Chief Cabinet Secretary Yoshihide Suga said the Japanese government “feels regret” that Australia decided to choose the French tender, but that Tokyo will continue to deepen security cooperation bilaterally with Canberra and trilaterally with Washington.
“Australia will continue to be a special strategic partner for our country,” the top government spokesman said at a news conference.
According to Suga, Turnbull informed Abe of the decision on Monday. Australia’s defense and foreign ministers did likewise to their Japanese counterparts the same day.
Prior to the announcement, Australian media had reported that Japan’s proposal to provide its Maritime Self-Defense Force’s Soryu-class diesel-electric submarine technology, with highly advanced stealth capabilities, did not have a strong chance against the other bids.
The failure cast a shadow over efforts by the Abe administration to add cutting-edge defense equipment to Japan’s export repertoire. If successful, the submarine contract would have been Japan’s first full-fledged defense export deal since Tokyo repealed a nearly half-century ban on arms exports in April 2014.
Speaking to reporters Tuesday in Tokyo, Defense Minister Gen Nakatani said he is confident in Japan’s submarine technology and capabilities.
“I will ask the Australian side why (the Japanese bid) was not chosen, and have the findings firmly reflected in our activities,” he said.
Nakatani, however, said Japan wants to “fully cooperate” with Australia on issues of mutual interest such as stabilizing the security environment in the Asia-Pacific region including the South China Sea, where China and its Southeast Asian neighbors are engaged in territorial disputes.
Asked if he thinks Australia’s decision may have reflected China’s perceived pressure not to choose Japan in the submarine deal, Nakatani said, “I don’t think so.”
Mitsubishi said in a statement, “It is deeply regrettable that Japan’s capabilities were not sufficiently conveyed, which has led to the result announced today.”
French President Francois Hollande said in a statement that the deal was a “decisive step forward” in the strategic partnership between France and Australia. French Defense Minister Jean-Yves Le Drian told Europe 1 radio that it was a “major victory for the French naval industry.”
France offered a diesel-electric version of the Barracuda-class nuclear submarine under construction for the French navy. Japan proposed a longer version of its Soryu-class diesel-powered propulsion system with advanced stealth capabilities.
Germany offered a larger variation of its Type 214 submarine made for Australian specifications called a Type 216.
The French bid offered the same pump jet propulsion that gave its nuclear submarines their advanced stealth capacity. Other diesel-electric submarines are too small to be fitted with the same stern-heavy technology.
Australia’s Shortfin Barracuda Block1A will be 97 meters (318 feet) long and weight 4,500 metric tons (5,000 U.S. tons) — 2.5 meters (8 feet) shorter and 200 metric tons (220 U.S. tons) lighter than its French nuclear cousin.
The German bid had highlighted their decades of experience in building submarines for several navies and had publicly offered to build the entire fleet in Adelaide for AU$20 billion — less than half the navy’s expected cost. It promoted as its edge over competitors its partnership with German engineering firm Siemens which would have provided the submarines’ software and promised to create a digital shipbuilding center in Adelaide.
Australia already has one of the world’s largest conventional submarines, the Australia-built Collins class, and the navy insisted that its replacement at least match its range of 12,000 nautical miles (22,000 kilometers). At 3,100 metric tons (3,400 U.S. tons) and 77 meters (253 feet long), the Collins will be dwarfed by the next-generation Shortfin Barracuda.