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Henderson based shipbuilder Austal cut out of $3 billion Australian Navy patrol boat contract

Nick EvansThe West Australian
John Rothwell chairman of Austal pictured at their Henderson shipyard.
Camera IconJohn Rothwell chairman of Austal pictured at their Henderson shipyard. Credit: Steve Ferrier

Austal has been cut out of a $3 billion contact to build the Australian Navy’s next generation of offshore patrol boats, in a major blow to the country’s biggest shipbuilder.

In a statement late this afternoon, Luerssen said it had “moved to conclude commercial negotiations with its build partners” for the multi-billion-dollar project, but that Austal was not part of its plans.

“Ultimately the negotiations with Austal have not generated a proposal that represents an acceptable level of value for money and Austal will not be a participant in the OPV build team,” the company said in a statement.

The Henderson-based shipbuilder has been locked in negotiations with German-designer Luerssen since the Federal Government’s surprise decision to insert it into the contract late last year.

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The build component of the contract is understood to be worth about $2 billion. WA’s Civmec has already announced it has won about $240 million worth of work on the project.

Luerssen’s initial bid for the contract included Civmec as its WA partner to build the vessels, but the Federal Government surprised many by including Austal, which had been part of a rival bid, when it was announced late last year.

The first two vessels will be built in Adelaide, with another ten to be built in WA from 2020.

More to come…

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