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Naval Ship Building, LAND 400 and Bendigo

Naval Shipbuilding

Now that the Naval Shipbuilding Plan has been released by the Turnbull Government, it’s confirmed that as much as $95 billion will be spent in coming decades on new submarines, new frigates, and new offshore patrol vessels and patrol boats.  This is a massive continuous shipbuilding program which will also involve tens of billions of dollars on sustainment.  One thing that’s absolutely clear, is that this is an Australia-wide endeavour, in fact it’s the biggest and most complex financial and technological undertaking that our country has ever embarked upon.  

The sheer scale of the project means that Victorian manufacturing and Victorian scientific research capability will inevitably be very significant participants in the naval shipbuilding plan – it’s simply too big for any one state.  With this in mind, we are concentrating on how to make sure Victorian defence industry businesses, along with our universities and research organisations, are involved to the maximum.  

One important policy measure that we are arguing for is the inclusion of Australian industry participation targets in the contracts for the submarines and surface ships.  In my view, if it’s not a contractual commitment then we won’t get as good an outcome for the Australian defence industry, the economy, or jobs.  So this is a key priority.

LAND 400

As many of you would be aware, back in September last year the Victorian Government purchased the GM Holden site at Fishermans Bend.  This site is 37 hectares of high quality industrial land in Port Melbourne, and which is located adjacent to the Defence Science Technology Group facility.  The plan is to develop the site as an engineering precinct with a strong defence involvement. As such, we are offering the Fishermans Bend site as the location for LAND 400 to both BAE and Rheinmetall.  

Both companies have looked around Australia at all available options, and they have been offered various options in Victoria.   However, the discussions with both companies are now firmly directed towards Fishermans Bend.  Having said that, both companies are also still engaged with at least one other state government, so Victoria is still in a tough competition.  The objective for us is to secure the commitment of both companies, regardless of which one wins the LAND 400 tender, to locate their production facility in Victoria.  

At the moment, the Army is testing each of the vehicles that both companies are offering, with the testing process due to wrap up in the next month or two.  We understand that the companies will also be fine-tuning their proposals to the Department of Defence in coming months, and that a decision will be made on the winner sometime in the first or second quarter of 2018.

It’s our firm belief that if we succeed in attracting LAND 400 to Victoria, it will be of tremendous benefit to defence industry SMEs in coming years and will certainly consolidate Victoria as the home of military vehicle production.  It’s worth bearing in mind that although there are an initial 225 vehicles scheduled for production in LAND 400 Phase 2, another 450 vehicles are scheduled for production in Phase 3. These are highly complex military vehicles with the latest technology in a project that will run for many years in production and sustainment, and which is worth many billions.

Bendigo visit 

Greg Combet and Paul Chapman

With Paul Chapman from the Australian Turntable Company Pty Ltd during my visit to their premises

I was recently in Bendigo to visit the Thales facility where the Bushmaster and Hawkei vehicles are being manufactured for the Army.  I was pleased to see that a brand new production line based on the best automotive manufacturing processes has been developed under the watchful eye of a former Holden engineer, and that the outlook for jobs in Bendigo is very good for years to come.  Thales is also looking for export opportunities for both vehicles.

I visited Australian Defence Apparel, which makes ADF combat uniforms, and that business is in a healthy position and applying modern manufacturing processes to improve efficiency.  I also met with the City of Greater Bendigo and SMEs in the area to discuss what the Victorian Government could do to help them access as much work as possible in the defence industry.  

As is well known, many of the manufacturing business in the Bendigo area are some of the smartest and most innovative in the country.  One example of success is the Australian Turntable Company. Its founder and Executive Chairman, Paul Chapman, explained to me how they’re able to use their turnstile technology to save large amounts of very valuable space on construction sites and infrastructure projects for their clients.

The Bendigo Advertiser covered my visit and a link to the resulting article is available here.

Greg Combet
1 June 2017