Development of new Australian submarines looks likely to go offshore after the Defence Minister said he would not trust a state-owned naval firm "to build a canoe".
Responding to questions in the Australian Senate late yesterday, David Johnston highlighted cost over-runs on other projects and a lack of experience in submarine design at Australian Submarine Corp (ASC).
In September it was reported that Australia was leaning towards buying as many as 12 off-the-shelf Soryu-class stealth submarines built by Mitsubishi Heavy Industries and Kawasaki Heavy Industries, to replace six ageing Collins-class vessels that have been panned for being noisy and easily detected by the mid-2030s at the latest.
"You wonder why I am worried about ASC and what they are delivering to the Australian taxpayer. Do you wonder why I wouldn't trust them to build a canoe?" Johnston told lawmakers.
"Let's get real here ... This is a professional programme that is about national security, and we will take the advice of the service chiefs, not somebody who is looking for a job."
Last week Reuters revealed that Australia wants a new Japanese lithium-ion battery propulsion system for the A$40bn (£22bn) submarine programme, citing two Japanese officials and one Australian official.
Japan is a leader in lithium battery technology and the next generation of its Soryu submarines, expected to be tested and commissioned around the end of the decade, will be the world's first to be powered by such a propulsion system.
Non-nuclear submarines typically use diesel-electric engines at the surface and an air independent propulsion (AIP) undersea, a system that requires fuel to operate, with conventional batteries as a backup power source. Lithium-ion propulsion has not been used in part because of the difficulty in adapting the technology for use in confined vessels.
"The advantage of lithium-ion batteries is that you won't need to return to port" to refuel, said Masao Kobayashi, a retired admiral who commanded Japan's submarine force until 2009. "You can just find a quiet place at sea and recharge your batteries. That means significantly longer operations."
Canberra has not made public any technological specifications or decided whether to hold a public tender for the vessels, but Prime Minister Tony Abbott previously pledged the submarines would be built in South Australia and several European contenders have emerged saying they would do the work in Australia.
Swedish defence firm Saab has already submitted a bid, Swedish media reported earlier this month, and ThyssenKrupp Marine Systems of Germany and France's state-controlled naval contractor DCNS have also expressed interest in the programme.
But none of the three European makers have built a submarine as big as the Soryu class, nor do they have Japan's lithium-ion technology.
Current Soryu vessels with AIP propulsion cost around $500m each while the lithium-ion submarines are being budgeted at $100m more. A deal would also mark Japan's re-entry into the global arms market, just months after Prime Minister Shinzo Abe ended a ban on weapons exports as part of his efforts to steer Japan away from decades of pacifism.
A Japanese Defence Ministry spokesman said last week that Tokyo was "discussing cooperation in defence equipment in a number of areas" with Australia but added he could not comment on specific projects.