Image copyright BAE Systems

British defence giant BAE Systems has won a multi-billion pound contract from the Australian government to build nine new warships, marking a significant victory for British military exports.

BAE beat Italian and Spanish rivals to win a large slice of the £19.6bn ($25.7bn; A$35bn) spending programme.

The ships will be based on anti-submarine frigates that BAE is building for the UK's Royal Navy.

However, the new warships will be built in Australia by a local workforce.

BAE's Australian arm said the construction of the ships locally would make a significant contribution to Australia's economy "creating thousands of jobs, supporting new industries and boosting the national supply chain for decades to come".

"We are proud to have been selected as preferred tenderer to provide the Royal Australian Navy with a world-class ship, equipped with the latest technologies and designed specifically to meet its needs," BAE Systems Australia chief executive, Gabby Costigan said.

UK Prime Minister Theresa May said the deal was also an "enormous boost" for the UK economy and reflected the government's strategy to "build on our close relationships with allies like Australia" as the UK prepares to leave the EU.

It is the first export of a British design for new-build frigates since the 1970s, the UK government said.

The ships to be built will be based on BAE Systems' Type 26 frigate, and will be called the "Hunter class".

Production in Australia is expected to commence in 2020.

Australian jobs

The Hunter class ships will be built in Adelaide, South Australia, by government-owned ASC Shipbuilding and the programme is expected to create at least 5,000 local jobs across about 30 years.

"The Hunter class will provide the Australian Defence Force with the highest levels of lethality and deterrence our major surface combatants need in periods of global uncertainty," the Australian government said.

The ships will be fitted with long-range anti-missile defence systems.

Image caption The Type 26 currently being built for the Royal Navy forms the basis of the design sold to the Australian government

While the overall budget is £19.6bn, only a part of that will come to BAE Systems for the design and build of the frigates.

BAE Systems chief executive Charles Woodburn said: "I am proud that our world class anti-submarine warfare design and our approach to transferring technology and skills to the nations in which we work is expected to contribute to the development of an enduring world-class naval shipbuilding industry in Australia."

Italy's Fincantieri SpA and Spain's Navantia also bid for the contract.

'Deal of the century'

BAE's shipyards on the Clyde in Glasgow are unlikely to see a significant boost to jobs.

Gary Cook of the GMB union criticised the deal, saying: "The inconvenient truth is that we're not exporting ships, only manufacturing jobs that should be going to British shipbuilding communities.

"And had the UK government and BAE invested in the promised frigate factory at Scotstoun, those frigates could easily be built here.

"Instead, there is a rubble pile where that factory should be, while 4,000 jobs and significant prosperity will be enjoyed in Australia and not the UK."

Nevertheless, defence analysts said the deal represented a significant success for British naval exports.

"It is the deal of the century," said Francis Tusa, editor of industry newsletter Defence Analysis.

The UK has had an "abysmal" export record for warship sales for the past five decades, he said. But this represented "a massive sea-change".

Canada, which is also planning to order warships later this year, might be influenced by Australia's decision, he added.

Selling the design overseas will help spread the costs of design and production of many elements of the frigate, potentially bringing down the cost of the Type 26 to the Royal Navy significantly, according to Mr Tusa.

However, it was not only BAE Systems who would benefit from the deal, he said.

Small and medium-sized UK companies would be likely to win orders for some of the technology required on the Australian ships.

Firms that are already supplying the UK government's order of the Type 26 would be in a strong position to also supply Australian orders.

Analysis: Douglas Fraser, Scotland business editor

The design success of the Global Combat Ship, otherwise known as the Type 26, is a breakthrough for BAE Systems. Over several decades, it has struggled to turn the Royal Navy's requirements into a design that other countries want to buy, or are willing to pay for.

Orders from other navies used to mean manufacturing at UK yards.

But now, other countries want to get the economic benefit of their military spending, so they insist on building themselves.

The hull can be the relatively cheap bit of building a complex warship, so there may be benefits to British arms exporters in selling weapons systems that fit into the Australian frigates.

However, this looks like a design which was heavily subsidised by the UK taxpayer, being sold overseas, and wholly to the benefit of BAE Systems. It appears that the UK taxpayer sees none of the direct payback or royalties from that investment.

Innovative design

Independent defence analyst Paul Beaver said the appeal of the Type 26 design is that it is modular.

"We are supplying the technology behind the hull, other nations will put their engines, their weapons systems into it. It's designed in a way that it can cope with that.

"You don't have to buy a certain type of missile or gun. You can buy a raft of different ones which will be very attractive."

He said he believed the agreement would turn out to be part of a wider deal on defence procurement between the UK and Australia.</s>The British defence company BAE System has come out as the winner of the Royal Australian Navy’s SEA 5000 Future Frigate Program, beating off competition from Italy’s Fincantieri and Spain’s Navantia.

The total value of the program is estimated at $35 billion over its 30-year life and will see BAE System build nine of its Type 26 Global Combat Ships in Adelaide. The anti-submarine warfare vessels will be officially known as the Hunter class in Australia.

BAE Systems’ Type 26 Global Combat Ship was competing against Fincantieri of Italy with its FREMM frigate, and Navantia of Spain with an updated Hobart Class/F-100.

Prime Minister Malcolm Turnbull is expected to announce the news today, alongside Australia’s defence minister Marise Payne and defence industry minister Christopher Pyne.

The British Prime Minister Theresa May has already hailed the contract between BAE Systems and the Australian government as “the biggest Naval defence contract for a decade.”

A press release published by the British PM’s office today marked the deal as the first export of a British design for new-build frigates since the 1970s.

The deal is expected to create 4000 Australian jobs and deliver the most technologically advanced stealth-capable submarine killer as the replacement for the eight ageing Anzac-class frigates that began service in 1996.

The new fleet will be assigned as the Hunter Class with construction to begin in 2020 and the first ship ­delivered by 2027.

BAE System’s Hunter Class of frigates will be built by ASC Shipbuilding at the Osborne Naval Shipyard in South Australia.

The federal government-owned ASC Shipbuilding will become a subsidiary of BAE System during the build.

This subsidiary status is to ensure that BAE Systems is fully responsible and accountable for the timely delivery of the frigates and guarantees the work will be carried out by Australian workers and create Australian jobs.

BAE Systems expects the Australian industry content (AIC) for the Hunter Class build will be 65-70 per cent, which will create and secure thousands of jobs for decades.

As part of its commitment to developing Australia’s sovereign shipbuilding capability, BAE Systems has prequalified over 500 Australian businesses from every state and territory to be in the Hunter Class supply chain.

BAE Systems Australia had earlier announced that it will partner separately with each of BlueScope and Liberty OneSteel for the supply of more than 48,000 tonnes of Australian steel for building the nine Future Frigates.

BAE’s Type 26 Frigate, which will provide the basis of the Australian Hunter class design, can support anti-submarine warfare, air defence and general purpose operations.</s>British defence firm BAE Systems has won the $35billion contract to build a new fleet of anti-submarine frigates for the Australian navy.

The federal government announced on Friday the company's Type 26 Global Combat ship will be the design for the program, in what will be the largest peace-time warship project in Australian history.

The 150-metre ships will be built in Adelaide and will be officially known as the Hunter class, with the navy to receive nine advanced guided missile frigates beginning in the late 2020s.

The 'submarine killers' - costing about $4billion each - will replace replace older frigates from as far back as 1996, a defence source told The Australian.

The first ship is expected to be delivered in 2027 as part of what the source described as 'the most significant warship project since World War II'.

The Turnbull government said the program will create 4,000 jobs across the country - with about 1,500 of those in Adelaide - and offer unprecedented opportunities to more than 500 small and large businesses across the supply chain.

The Hunter class 'will be one of the most capable warships in the world', the government said.

'The Hunter class will have the capability to conduct a variety of missions independently, or as part of a task group, with sufficient range and endurance to operate effectively throughout the region,' the government said in a statement.

'The frigates will also have the flexibility to support non-warfare roles such as humanitarian assistance and disaster relief.'

Finance Minister Mathias Cormann said the contract would deliver 'one of the world's most advanced anti-submarine frigates'.

'It will secure a sovereign naval shipbuilding industry here in Australia for decades to come,' he told Sky News.

British Foreign Minister Boris Johnson said the project was a sign of a strong UK-Australia relationship.

'Fantastic news that #Australia has chosen @BAESystemsplc Type 26 frigate for its new warship contract, worth up to PS20bn. Even further proof the UK-Australia relationship is stronger than ever!' he wrote.

British Prime Minister Theresa May hailed the announcement and said it was the 'perfect illustration' of the deals Brexit Britain will be striking.

She said: 'The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering and demonstrates what can be achieved by UK industry and Government working hand-in-hand.

'We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the Government is doing exactly that.

'And while this is an enormous boost for the UK economy, it will also cement our strategic partnership with one of our oldest and closest friends for decades to come.'

British Defence Minister Guto Bebb added: 'BAE Systems' winning bid highlights the best of British shipbuilding design and our world-leading anti-submarine warfare technology.

'Australian forces have stood should-to-shoulder with our military for generations and this deal will build on our strength as allies as our two great Navies operate this cutting-edge frigate around the globe.'

The close allies are both part of the 'Five Eyes' security partnership - an intelligence sharing alliance between Britain, Australia, America, Canada and New Zealand.

The new frigates will be crucial to Australia's defences at a time where China is escalating its military presence in the region's oceans.

BAE had been shortlisted for the frigate program by the Turnbull government, along with rival companies Fincantieri, based in Italy, and Spain's Navantia.

The federal government-owned ASC Shipbuilding will become a subsidiary of the UK defence firm during the build.</s>JUNE 29, 2018 — BAE Systems' Global Combat Ship - Australia has been selected for Australia's SEA 5000 Future Frigate program, beating out competing designs from Fincantieri and Navantia. BAE Systems says the value of the nine ship program is expected to be in the region of AUD $35 billion (about US$26 billion) for the design, build and support of the ships.

The frigates, a variant of the Type 26 Global Combat Ship, will be designed by BAE Systems and built by ASC Shipbuilding at the Osborne Naval Shipyard. 

ASC Shipbuilding, currently wholly owned by the Commonwealth of Australia, will become a subsidiary of BAE Systems during the build.

According to the Australian government this ensures BAE Systems is fully responsible and accountable for the delivery of the frigates and ensures the work will be carried out by Australian workers and create Australian jobs.

The Commonwealth of Australia will retain a sovereign share in ASC Shipbuilding while BAE manages the program. At the end of the program the Commonwealth will resume complete ownership of ASC Shipbuilding, thereby ensuring the retention in Australia of intellectual property, a highly skilled workforce and the associated equipment.

By the conclusion of the frigate build, says the Australian Government, ASC Shipbuilding will be a strategic national asset capable of independently designing, developing and leading the construction of complex, large naval warships.

To be called the Hunter class, the frigates will have the capability to conduct a variety of missions independently, or as part of a task group, with sufficient range and endurance to operate effectively throughout the region. They will also have the flexibility to support non-warfare roles such as humanitarian assistance and disaster relief.

The ships will incorporate the Australian-developed CEA Phased-Array Radar and the U.S. Navy's Aegis combat management system, with an Australian interface developed by Saab Australia.

BAE Systems expects the Australian Industry Content for the Hunter class build will be 65-70 percent and has prequalified over 500 Australian businesses from every state and territory to be in the Hunter class supply chain.

BAE Systems Chief Executive, Charles Woodburn, said: "BAE Systems' selection as preferred tenderer for SEA 5000 reinforces our position as a leading designer and builder of complex maritime platforms. I am proud that our world class anti-submarine warfare design and our approach to transferring technology and skills to the nations in which we work is expected to contribute to the development of an enduring world-class naval shipbuilding industry in Australia."



BAE Systems Australia Chief Executive, Gabby Costigan, said: "Construction of the Global Combat Ship – Australia is expected to make a significant contribution to the nation's economy, creating thousands of jobs, supporting new industries and boosting the national supply chain for decades to come. We are committed to creating a strong, sustainable and innovative naval shipbuilding industry that will see highly skilled Australians building and sustaining warships for the Royal Australian Navy.

 

"We are proud to have been selected as preferred tenderer to provide the Royal Australian Navy with a world-class ship, equipped with the latest technologies and designed specifically to meet its needs. The Global Combat Ship - Australia will help protect our shipping lanes and regional trade routes, serve humanitarian missions and provide the nation with a formidable naval capability."

 

The company will soon commence negotiations with Australia's Department of Defence on the initial design part of the contract, which is expected to be in place by the year end, with production expected to commence in 2020.</s>The British defence company BAE Systems has won the $35bn (£20bn) contract to build Australia’s fleet of new navy frigates.

The Australian government has announced that the company’s Type 26 Global Combat ship will be the design for the naval program. The nine new ships will be built in Adelaide and will be known as the Hunter class.

Malcolm Turnbull’s government said the program would create 4,000 jobs across the country and create unprecedented local and global opportunities for businesses large and small.



The British prime minister, Theresa May, said the export of a British design for the frigates would be an “enormous boost” for the UK economy and touted the deal as an example of opportunities that would open up for Britain after Brexit.

“The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering, and demonstrates what can be achieved by UK industry and government working hand-in-hand,” May said.

“We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the government is doing exactly that.”

May and her ministers have pressed the Australian government repeatedly on the benefits of the UK’s design and engineering. BAE saw off competition from Spain’s Navantia and Italy’s Fincantieri to win the deal.

The Hunter class “will be one of the most capable warships in the world”, the Australian government said.

“The Hunter class will have the capability to conduct a variety of missions independently, or as part of a task group, with sufficient range and endurance to operate effectively throughout the region.”

The finance minister, Mathias Cormann, said the contract would deliver “one of the world’s most advanced anti-submarine frigates”. “It will create about 4,000 jobs, and it will secure a sovereign naval shipbuilding industry here in Australia for decades to come,” he told Sky News.

The federal government-owned ASC Shipbuilding will become a subsidiary of the UK defence giant during the build. The advanced guided missile frigates will begin entering service in the late 2020s.

Britain’s foreign minister, Boris Johnson, said on Twitter the project was “fantastic news” and a sign of a strong UK-Australia relationship.

The chief executive of BAE Systems, Charles Woodburn, said the selection of the company reinforced its position as a “leading designer and builder of complex maritime platforms”.

“I am proud that our world-class anti-submarine warfare design and our approach to transferring technology and skills to the nations in which we work is expected to contribute to the development of an enduring world-class naval shipbuilding industry in Australia,” he said.</s>British defence giant BAE Systems has won a 35 billion Australian dollar (£20 billion) contract to build a new fleet of warships for Australia.

BAE will build nine Type 26 submarine hunter ships for the Royal Australian Navy under the terms of a 30-year contract.

The group saw off competition from Spain’s Navantia and Italian firm Fincantieri to win the deal, which is part of a 200 billion Australian dollar spending programme by Canberra.

UK ministers are expected to trumpet the decision as a coup for Brexit Britain when an official government announcement is made, although the ships will be built in Australia.

It will come as welcome relief to Theresa May, who has had to deal recently with a public hammering from Airbus, BMW and business groups over her party’s handling of Brexit.

Foreign Secretary Boris Johnson has also been in the headlines for having said to have exclaimed “f*** business” when asked about the Brexit fears of company bosses.</s>UK defence giant BAE Systems has won a 35bn Australian dollar (£20bn) contract to build frigates for the Australian navy, seeing off rival bids from Spain and Italy.

Australian media broke the news ahead of a planned announcement by ministers in the UK.

According to the Sydney Morning Herald, Australian Prime Minister Malcolm Turnbull is to confirm BAE System's victory tomorrow in what will be seen as a significant boost to British manufacturing.

Read more: Defence giant BAE systems has just landed a $200m bid to build US tanks

The nine new Hunter class frigates will be built in Adelaide and come into service from the late 2020s, replacing the current Anzac class frigates.

BAE Systems will be put in charge of government-owned shipbuilder ASC Shipbuilding in Adelaide.

Read more: BAE Systems picks up £2.4bn in MOD funding for nuclear submarines

In a statement shared with the Herald, Turnbull said: "ASC Shipbuilding will be a strategic national asset capable of independently designing, developing and leading the construction of complex, large naval warships."

Turnbull will officially announce the deal tomorrow alongside Australia's defence minister Marise Payne and defence industry minister Christopher Pyne.

“The Hunter class will provide the Australian Defence Force with the highest levels of lethality and deterrence our major surface combatants need in periods of global uncertainty,” Turnbull said.

Read more: BAE Systems just sold £5bn of Typhoon jets to Qatar

The frigates will specialise in anti-submarine warfare. Half of the world's submarines are expected to be in the waters between the Pacific Ocean and the Indian Ocean by the 2030s.

Stephen Phipson, chief executive of EEF, the manufacturers’ organisation, hailed the news as a win for British industry.

“This win for the UK defence industry is the result of years of hard work with government and industry working in close partnership. The decision by the Australian Government confirms the UK leadership in advanced Frigate design and the strengthening of ties at both the industrial and defence level between the UK and Australia.”</s>Defence giant BAE systems has landed a £20billion project to build nine warships for Australia in a major boost for Brexit Britain.

The firm beat off fierce competition to get the contract to construct the 'hunter killer' anti submarine ships.

The new fleet will become the backbone of Australia's defence and is the biggest naval construction project the country has undertaken since World War Two.

The deal will create thousands of jobs in Australia and is a major boost to the defence industry in the UK.

The Hunter Class frigates will replace the country's eight aging Anzac-class frigates that began service in 1996.

Construction on the ships will kick off in 2020 and the first ship is expected to be delivered in 2027, according to a report in The Australian newspaper.

A Defence source said the BAE-designed ships will be the most capable vessel of its kind, telling the newspaper: 'They kill submarines.'

Australia is understood to have gone with the British bid in part because the two countries already have a close security partnership.

The close allies are both part of the 'Five Eyes' security partnership - an intelligence sharing alliance between Britain, Australia, America, Canada and New Zealand.

Australian Prime Minister Malcolm Turnbull said: 'The frigates, to be designed by BAE Systems and built by ASC Shipbuilding, are central to our plan to secure our nation, our naval shipbuilding sovereignty and create Australian jobs.

'(It) will provide our nation with one of the most advanced anti-submarine warships in the world — a maritime combat capability that will underpin our security for decades to come.

'The Hunter class will provide the Australian Defence Force with the highest levels of lethality and deterrence our major surface combatants need in periods of global uncertainty.

'The Hunter class will have the capability to conduct a variety of missions ­independently, or as part of a task group, with sufficient range and endurance to operate effectively throughout the region.

'The frigates will also have the flexibility to support non-warfare roles such as humanitarian assistance and disaster relief.'

The deal is expected to create 4,000 Australian jobs and deliver the most technologically advanced stealth-capable submarine killer in the world.

The frigates will be be crucial to Australia's defences at a time where China is escalating its military presence in the region's oceans.

BAE Systems won the contract ahead of competing bids by Italian firm Fincantieri and Spain's Navantia.

Defence chiefs in Australia are understood to have gone with the British firm because their ship was 'by far and away' the most lethal ship of the three. bids, the paper reported.</s>British defence giant BAE Systems has won a 35 billion Australian dollar (£20 billion) contract to build a new fleet of warships for Australia.

BAE will build nine Type 26 submarine hunter ships for the Royal Australian Navy under the terms of a 30-year contract.

The group saw off competition from Spain’s Navantia and Italian firm Fincantieri to win the deal, which is part of a 200 billion Australian dollar spending programme by Canberra.

UK ministers are expected to trumpet the decision as a coup for Brexit Britain when an official government announcement is made, although the ships will be built in Australia.

It will come as welcome relief to Theresa May, who has had to deal recently with a public hammering from Airbus, BMW and business groups over her party’s handling of Brexit.

Foreign Secretary Boris Johnson has also been in the headlines for having said to have exclaimed “f*** business” when asked about the Brexit fears of company bosses.

Shares in BAE were up over 1% following the news.

BAE did not respond to requests for comment.

Australian prime minister Malcolm Turnbull is expected to confirm the deal on Friday.

The deal is the second major coup for BAE after the defence giant bagged a 198 million US dollar (£150 million) tank contract with the US Marine Corps last week.

The deal will see BAE deliver an initial 30 “amphibious combat vehicles” with options for a total of 204 tanks, which could be worth up to 1.2 billion US dollars (£909 million).

Earlier this year, it was announced that the UK Government will stump up £900 million for BAE to press ahead with the second phase of construction for four nuclear-armed Dreadnought submarines.</s>Defence giant BAE Systems has won a £20 billion contract to build a new generation of warships for Australia.

BAE beat Italian and Spanish rivals Fincantieri and Navantia to the Australian government deal.

Under the terms of the 30-year contract, BAE will supply nine Type 26 submarine hunter ships for the Royal Australian Navy.

The contract is part of a £112 billion spending programme by the Australian government.

Although the ships will be built in Australia, Prime Minister Theresa May said the export of a British design for the frigates would be an "enormous boost" for the UK economy.

Foreign Secretary Boris Johnson, Defence Secretary Gavin Williamson and International Trade Secretary Liam Fox have also visited Australia over the course of the last 18 months to expound the benefits UK's design and engineering.

But Gary Cook, Scottish chairman of the Confederation of Shipbuilding and Engineering Unions, said: "The inconvenient truth is that we're not exporting ships, only manufacturing jobs that should be going to British shipbuilding communities.

"Had the UK Government and BAE invested in the promised frigate factory at Scotstoun, those frigates could easily be built here.

"Instead, there is a rubble pile where that factory should be while 4,000 jobs and significant prosperity will be enjoyed in Australia and not the UK."

The award of the contract comes after four years of high-level engagement by the UK, with Mrs May raising it at talks with Australian Prime Minister Malcolm Turnbull at Chequers earlier this year.

BAE Systems chief executive Charles Woodburn said the selection of the company as preferred tenderer reinforced its position as a "leading designer and builder of complex maritime platforms".

"I am proud that our world-class anti-submarine warfare design and our approach to transferring technology and skills to the nations in which we work is expected to contribute to the development of an enduring world-class naval shipbuilding industry in Australia," he said.

Mrs May said: "The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering, and demonstrates what can be achieved by UK industry and Government working hand-in-hand.

"We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the Government is doing exactly that.

"While this is an enormous boost for the UK economy, it will also cement our strategic partnership with one of our oldest and closest friends for decades to come."

The deal is the second major coup for BAE after it won a $198 million (£150 million) tank contract with the US Marine Corps.

The deal will see BAE deliver an initial 30 "amphibious combat vehicles" with options for a total of 204 tanks, which could be worth up to 1.2 billion US dollars (£909 million).

Earlier this year, it was announced that the UK Government will stump up £900 million for BAE to press ahead with the second phase of construction for four nuclear-armed Dreadnought submarines.
BAE Systems is awarded a £19.6bn contract to build nine next-generation Hunter-class frigates for the Royal Australian Navy with construction expected to begin in 2020.