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BAE Systems Williamstown in Victoria

At Williamstown, work began on a state shipyard in 1865 and a dry dock was completed in 1873. The shipbuilding dockyard was officially opened in April 1913 following the construction of two building berths. In 1918, the Commonwealth purchased the dockyard from the Victorian government and subsequently announced a six ship construction program at Williamstown. Thereafter, the Williamstown dockyard averaged 'a vessel per year in addition to a large programme of refitting'. From 1913 to 1945, however, Williamstown was only active in constructing naval vessels during World War 2, when it built eight Bathurst class minesweepers and the survey vessel Warreen. In 1940–41, two building slips were completed and in 1942, the Navy took over the dockyard from the Melbourne Harbour Trust.

The Victorian Navy, which was centred at Williamstown, guarded the colony from maritime threat for half a century before the federation of the colonies into one nation in 1901. It was the first navy created on the continent of Australia. The ‘Victoria’, the ‘Cerberus’ and the ‘Nelson’ (whose anchor is displayed on Commonwealth Reserve, Nelson Place, near the Tide Gauge House) were amongst the battleships of the Victorian Navy, and after federation, the Royal Australian Navy.

In the 1970s and 1980s the Williamstown Dockyard was modernized by the Australian Department of Defence to build frigates and destroyers. Today, Williamstown was a vital construction center for Australia’s naval defences.

The Victorian government holds most of the residual value of the considerable investment made in naval shipbuilding in Australia over recent decades. Williamstown has benefited from over 100 years of public investment in its infrastructure. Tenix's shipyard at Williamstown has a record in significant surface warship construction that would be envied by many competitors around the world.

Williamstown is situated on the western shore of Port Phillip Bay and dates back to 1865. Tenix owns the site, which they bought in 1987 from the Commonwealth 'as a going concern to build ships'.58 It has 2 x 6000dwt building berths (150m length x 36.5m total width), travelling cranes: 3 x 59t, 3 x 10t, graving dock (limited to 145m x 29.6m; gate 23.3m), cranage of 250t capacity, transporters with capacity 400t, halls for module construction, assembly, blast and paint and outfit, and wharfage in excess of 600m with 300m fully serviced.

When the Hawke Labor Government came to office in 1983, it was prepared to use Williamstown Naval Dockyard [WND] to demonstrate its willingness to employ commercialisation measures to achieve public sector and micro-economic reform. The reason for such an approach was the poor record of major defence shipbuilding projects in Australia, particularly the escalating costs and extended delays associated with the construction of HMAS Success at the Vickers Cockatoo dockyard in Sydney.

On 01 April 1987 the Minister for Defence announced major changes aimed at restructuring the Australian shipbuilding and ship repair industries. This included the sale of WND, and some $280 million of work remaining on the two Australian Frigates, as a last-ditch effort to achieve efficiency and cost cutting before the (ANZAC) frigate project (was) awarded. The proposed sale was supported by senior dockyard management however, the Government’s decision came as a surprise to the Labor Party Caucus, which had established a committee to examine the proposed privatisation of the dockyard and had not completed its investigation.

Following the Government’s announcement, an Invitation to Register Interest and then a Request For Tender were released to consortia interested in purchasing the dockyard, entering into a contract for the completion of the Australian Frigates and tendering for selection as Prime Contractor for the ANZAC Ships Project. Following the evaluation of tenders, two consortia were selected to enter parallel negotiations covering both the sale of the dockyard and the completion of the Frigates. Both tenderers stated a preference for a fixed price contract for Frigate construction. On 11 December 1987 the Minister for Defence announced the sale of WND to AMECON for $100 million. Within a few months, AMECON was acquired by Transfield, an initially unsuccessful bidder for the dockyard and FFG construction.

From the time of the sale, AMECON began a program of significant work place reform. In the Government’s view, the sale of WND to AMECON virtually guaranteed the dockyard to be one of the final tenderers for the ANZAC Ship Project. Late in 1989 Government awarded the $3.7 billion contract to build 10 ANZAC Ships to AMECON. Although the bids were very close, Williamstown’s bid had… begun to look more credible since AMECON began work on the two FFG frigates for the RAN. If there had not been reforms of the magnitude experienced within the Williamstown dockyard following the sale to AMECON, it may not have won the contract for the ANZAC Ships. But, having done the reforms… there wasn’t a strong inclination on the part of Cabinet to deny Williamstown the project.

Tenix Defence Pty Ltd, believed that, despite its age, Williamstown was a very modern, very clean and very advanced shipyard. In the mid-1990s, the shipyard had four and five ships under consolidation simultaneously. In terms of modularity and how it fits into Tenix infrastructure, modularity allows, more than anything, to simply spread work around so that the higher, more complex, work of the system and physical integration of the ship ongoing.

The 2002 strategic plan noted that the infrastructure at Williamstown had been developed to enable consolidation of the ANZAC frigates. It observed that some aspects of the infrastructure could be modified 'relatively easily', whereas others would require 'considerable investment or are effectively permanent'. The plan reflected advice it had received that 'for future construction of large major surface combatants such as proposed under SEA 4000, the site would need significant redevelopment'. It stated further 'Considerable investment, possibly including a floating dock to supplement land docking, might also be necessary should concurrent build and/or upgrade activities be planned'. At this time, ASPI concurred that the site could be used to construct large ship modules but that major infrastructure changes would be necessary for the consolidation of large ships.

A study, conducted by the Allen Consulting Group in 2005, before the AWD project was awarded to ASC, found: "While much of the existing shipyard would not require refurbishing in order to accommodate the AWDs, some facilities would need to be upgraded or replaced. For example, the present slipways and docks are too small, and in any case there is now a view that slipway launches are undesirable for substantial vessels because of the strain they supposedly exert on the hull."

The report indicated that the capital cost of the work would be approximately $80 million and would include: a floating dock for launch; cranes, including a heavy lift mobile crane; a construction hall; a steel fabrication shop; panel manufacturing facilities, including a robot cutting machine; pier demolition; and dredging. The report noted that the Victorian government had offered a support package for the AWD project that would have provided 'funding for a share of this upgrade cost'.

Tenix commissioned a benchmarking study of its performance as a shipbuilder against companies through Asia, Europe and the US. According to Tenix, the study indicated that Tenix is 'above the midpoint of where many of the best yards in the worlds are in'. Although the study showed the company's strength in planning systems and organising work, it had specific suggestions to improve its modular assembly. An area where it was suggested Tenix should go back and begin to put in plans for improvement was the layout of the yard, to look at ways to have a better flow of material coming through in the way that modules are constructed, so that they do more work in the module phase before we begin the large assembly of a hull.

A substantial upgrade would be needed if Tenix were to take on the construction of a very large vessel such as an LHD at Williamstown. The company, however, has other options that would accommodate such a project, such as using its Western Australian site which is immediately adjacent to the common user facility in Henderson. The common user facility in Western Australia was part of Tenix's business plan: that when bidding for major jobs it tends to do so through the CUF. Over the past year Tenix has undertaken a number of naval repairs on Anzac frigates using that facility.