Military

Australia is a step closer to buying a new fleet of bigger, faster and more capable patrol boats to increase surveillance and better protect Australia's coastline.

Defence Minister Robert Hill said a partnership between Defence Maritime Services and Austal has been selected as the preferred tenderer to build and support the Navy's replacement patrol boats.

Senator Hill said the new aluminum boats will operate out of Cairns and Darwin and will be armed with the Rafael 25mm Typhoon stabilised cannon and equipped with state of the art communications systems.

The new boats will be able to operate in a greater range of sea conditions and will improve Navy's capability to intercept and apprehend vessels suspected of illegal fisheries, quarantine, customs or immigration offences.

"The fleet of 12 new boats will also carry two smaller sea boats to allow Navy crews to conduct boarding and surveillance missions," Senator Hill said.

"The Navy will be able to operate the new Armidale Class boats for 3,000 days per year, plus have the capacity of an additional 600 days for short notice tasks. This compares to an average 2,700 operational days per year currently undertaken by the existing Fremantle boats."

The boats are expected to be built at Austal's Henderson yard near Fremantle, Western Australia, and have a range of 3,000 nautical miles, which is a 25 percent increase over the existing boats.

Senator Hill said the staged tender process has been an intense battle between the three shortlisted companies, which included ADI and Tenix, which has highlighted how competitive Australia's small vessel shipbuilding industry is.

"The current fleet of Patrol Boats has served the Navy and Australia well but the boats are aging and are costly to maintain," he said.

"The DMS/Austal offer was evaluated ahead of Tenix by a tender evaluation group on the basis that it offered the best value for money in meeting Defence's patrol boat requirements in line with the criteria in the request for tender."

DMS/Austal will have an obligation for through life maintenance and support for the 15-year life of the boats. Subject to final negotiations, the total cost will be about $550 million. The cost of the build is within the Department's funding allocation.

DMS is a joint venture between Serco and P&O Maritime Services that provides port services wherever the Navy has bases in Australia, including refueling ships, the provision of alongside services, tugs, water taxis, lighters and general harbour services. Austal is a successful Australian builder and exporter of fast passenger ferries, luxury yachts, patrol craft, and other commercial vessels.

"Both Cairns and Darwin should benefit from the through life logistics support activities that will take place there," Senator Hill said.

"Other regions will also benefit as individual systems and equipment fitted to the boats are likely to be sourced and supported from Australian companies.

"The decision to acquire and support the new Patrol Boats underlines the Government's commitment to improve the capabilities of the Australian Defence Force and deliver real security outcomes for all Australians."

The tender evaluation group that recommended the selection of DMS/Austal as preferred tenderer was chaired by a senior Defence officer and included probity advice from the Australian Government Solicitor and a legal adviser from Clayton Utz. The Defence delegate subsequently accepted this recommendation.

DMS/Austal has undertaken to meet the targets set out in the request for tender for Australian Industry Involvement percentages of 90 per cent in the support phase and 65 per cent in the build phase.

Defence will enter contract negotiations with DMS/Austal to resolve outstanding issues with a view to entering into a contract in November 2003.

The project is on schedule with the first Armidale Class Patrol Boat to enter service in the first half of 2005, consistent with the Government's 2000 Defence White Paper commitments.