Germany, Japan and France are officially in the hunt to build Australia's new submarines

A Japanese sub. Photo: Getty/ Koichi Kamoshida

They were on the other side of Australia’s military spend 75 years ago, but now Germany and Japan, as well as France, have put their hands up to build the next generation of the nation’s submarine fleet. At stake is a $20-plus billion contract for eight new submarines to replace the Collins Class, starting in 2026.

Who should do it has been a vexed issue for the Abbott government, which made a 2013 election promise to build the subs locally, then became enmeshed in a semantics war as it tried to avoid being tagged as breaking an election promise. Late last year, the issue cost former defence minister David Johnston his job after an outburst in which he said he wouldn’t trust the Adelaide-based government-owned Australian Submarine Corporation (ASC) “to build a canoe”.

Prime minister Tony Abbott replaced Johnston with Kevin Andrews in a December ministerial reshuffle.

The much-vaunted “competitive evaluation process” led Kevin Andrews to announce a four-member expert advisory panel to oversee the process. They are former US Navy secretary Professor Donald Winter, former Federal Court justice Julie Anne Dodds‑Streeton, Ron Finlay, “one of Australia’s leading infrastructure specialists with extensive legal experience”, the minister says; and Jim McDowell, a member of the First Principles Review team with extensive defence experience.

“Collectively, these advisers share extensive experience in complex military acquisition programs, legal and probity matters, and major projects,” Andrews said.

The minister made it clear that whatever decision is made, the bulk of the work is going offshore.

“The government expects that significant work will be undertaken in Australia during the build phase of the future submarine including combat systems integration, design assurance and land based testing. This will result in the creation of at least 500 new high-skilled jobs in Australia, the majority of which will be based in South Australia,” he said.

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