BAE Systems Type 26 warship

BAE Systems wins £20bn contract with Royal Australian Navy

Image credit: BAE Systems

UK defence giant BAE Systems has won a 30-year £20bn contract to supply the Royal Australian Navy with a new generation of anti-submarine warships.

The company saw off competition from two other European defence suppliers: Navantia and Fincantieri. Prime Minister Theresa May had reportedly raised the prospect of the contract with Australian Prime Minister Malcolm Turnbull during a visit to Chequers earlier this year, while Foreign Secretary Boris Johnson, Defence Secretary Gavin William and International Trade Secretary Liam Fox have also visited Australia to promote UK engineering and design.

BAE Systems will be delivering nine Type 26 submarine hunter ships to upgrade the Royal Australian Navy’s fleet. BAE Systems previously won contracts for designing and manufacturing the original Type 26 frigate, a 150m-long warship designed for anti-submarine warfare and to support air defence in the Royal Navy.

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

The Royal Australian Navy will acquire a modified version of the Type 26, named the ‘Hunter Class’. According to the government, this is the first export of a British design for new-build frigates for decades. The ships are due to join the navy in the late 2020s. Construction will begin in 2020 in Adelaide, South Australia, a decision which has angered UK shipbuilders.

“The inconvenient truth is that we’re not exporting ships, only manufacturing jobs that should be going to British shipbuilding communities,” said Gary Cook, Scottish chair of the Confederation of Shipbuilding and Engineering Unions. “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 rubbish pile where that factory should be while 4,000 jobs and significant prosperity will be enjoyed in Australia and not the UK.”

However, the deal was hailed by Theresa May, who described the British involvement in designing the ships for export as an “enormous boost” for the economy and an example of building close trading relationships with other countries as the UK prepares for its exit from the EU.

“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.”

The deal follows soon after last week’s £150m deal between BAE and the US Marine Corps to manufacture at least 30 amphibious combat tanks. The deal could end up being worth £909m to the company if the Marine Corps upgrades its order to its suggested total of 204 tanks.

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