ThyssenKrupp, DCNS, Mitsubishi-Kawasaki Submit Bids for Australian Submarine Project

Germany’s ThyssenKrupp Marine Systems (TKMS), France’s DCNS and Japan’s Mitsubishi Heavy Industries-Kawasaki Heavy Industries today submitted bids to build Australia’s new submarines fleet.

Australian and Japanese media reported that the bids by the companies were submitted by the November 30 deadline.

Australian Defense Minister Marise Payne after receiving the bids said in a statement, “Defence will now assess the ability of the participants to work closely with us, including how each proposal would meet our capability and sustainment needs and how cost, schedule and risk would be managed throughout the program.”

Canberra is expected to shortlist a preferred bidder next year and award the project worth Australian dollars 50 billion (US $35 billion).The new submarines are to replace Australia’s Collins class submarines and are expected to enter service in 2025. The winner will receive what is being talked about as the world’s single most lucrative defence contract.

The bid submission comes 10 months after Australia, under pressure from Berlin and Paris, withdrew plans to award it to Japan without a competitive tender process.

While France’s DCNS has promised to create thousands of local jobs and share sensitive military technology, ThyssenKrupp has said it would aim to establish its Adelaide operation as a shipbuilding hub for the Asian region.

What was considered an easy award for Japan’s Mitsubishi Heavy Industries and Kawasaki Heavy Industries following talks between Tony Abbott, Australia’s former prime minister, and Shinzo Abe, has become an intense three-cornered contest.

Tokyo’s original proposal to build all the submarines in Japan prompted the entry of TKMS and DCNS.

The bidders have been asked to submit three separate proposals: building the submarine fleet in their own country; building the fleet in Australia; and a hybrid option whereby work is conducted in both countries. Marise Payne, Australia’s defence minister, said last week the intention was to announce a preferred bidder in about a year’s time.