German company wants to build Australia’s submarines

German submarine builder ThyssenKrupp Marine Systems (TKMS) has made a bid to build the next generation of  submarines for Australia in a joint-venture with Adelaide-based ASC.

According to the AFR, defence sources confirmed that that the bid has been received and said that it “comes in at under $20 billion”.

Earlier this week reports suggested that, although no official decision has been made, Japan is almost certain to the win the work and South Australia would miss out. Only components would be made in the state.

Despite the fact that the Federal Government promised before the last election twelve months ago that the 12 next generation submarines would be built in South Australia, Prime Minister Tony Abbott has since said that the decision should be solely based on defence requirements. He said it should have nothing to do with industry policy.

TKMS, through its HDW subsidiary, has built submarines for Israel and South Korea. Given the pre-election promise, the fact that the company is proposing a joint venture with local company ASC would mean that it is taken seriously.

Australian Strategic Policy Institute budget analyst Mark Thomson said there were also other credible bids including some from Spain and France. He added that there should be an open competition to decide who wins the work.