Navy Contract `not Done Deal'

Newcastle Herald

Tuesday December 4, 2001

By DONNA PAGE

DEFENCE shipbuilding will not be centralised in Adelaide and Newcastle has a `good' chance of securing a $400million navy patrol boat contract, according to Senator John Tierney.

Hunter shipbuilders ADI and Forgacs are vying for the contract, which would give the region 700 direct jobs and 2000 indirect jobs.

A strategy meeting was held in Newcastle yesterday amid fears that the Howard Government planned to centralise shipbuilding in South Australia.

Senator Tierney said it was simply `not true'.

`That came from a document that has no status whatsoever,' the Hunter-based Liberal said.

`It was something written by a mid-level public servant and it was just that person's view.'

For some time there have been reports that the Commonwealth wants to bring together Australia's fragmented shipbuilding industry in a super facility at the Osborne yard, near Adelaide, centred on the Australian Submarine Corporation.

But Senator Tierney said bids were being accepted from across Australia.

He said the fact that ADI and Forgacs had submitted two completely different bids would strengthen Newcastle's chances.

The Forgacs bid is based on a steel boat and ADI's on a fibreglass model.

The Carr Government has backed the Newcastle bids, offering payroll tax concessions and guarantees of development approval support if ADI or Forgacs is successful.

A Hunter Economic Development Corporation-commissioned report estimates at least $330million in revenue from the patrol boat project over five years of construction.

Flow-on effects would stimulate additional production valued at $185million and regional consumption worth about $110million.

The contract aims to replace the Royal Australian Navy's ageing fleet of 15 Fremantle class patrol boats.

State Member for Newcastle Bryce Gaudry said winning the contract was essential for shipbuilding in Newcastle.

`We need to have a major naval project here to retain the shipbuilding skills,' Mr Gaudry said.

Federal Member for Newcastle Sharon Grierson said the process was an excellent chance to market the Hunter as a shipbuilding region.

Tenders closed on November 23, with the Department of Defence to short-list two or three companies.

Winning tenders will be announced by the second half of next year. Editorial Page 8