Two Australian companies who want to help build high-tech future warships have been told their involvement in a $35 billion Defence project could lead to costly delays of at least two years.
West Australian company Austal and its South Australian partner ASC are furiously lobbying to ensure they can construct the Navy's Future Frigates, which will be based on a yet-to-be-selected international design.
Spanish company Navantia, UK firm BAE Systems and Italian shipbuilder Fincantieri have been shortlisted in a fierce competition to design, build and sustain nine new anti-submarine warfare frigates to replace Australia's existing Anzac frigate fleet.
The ABC has been told a joint Austal and ASC bid for the build of the frigates won initial support from some federal cabinet ministers, before the Defence Department convinced the Government the proposal should only be "optional", not "mandated".
"Advice from the Department of Defence is that changing the request for tender to mandate a particular shipbuilder would result in a delay of at least two years in the Future Frigates program," Defence Industry Minister Christopher Pyne said in a statement.
"The Government is committed to creating an indigenous naval shipbuilding industry in Australia which will involve a significant increase of employees in the shipbuilding industry, focused on South Australia."
Representatives of the international companies competing for the Future Frigates project have also privately echoed warnings of significant delays if the Government mandates a certain shipbuilder.
Austal chief executive David Singleton insisted the participation of his company and ASC in the building phase would not complicate or delay the Future Frigates project.
"We bring our ships in on time and on cost and everybody knows that," Mr Singleton told the ABC.
The program will come under scrutiny today during a parliamentary inquiry into the future of Australia's naval shipbuilding industry.
"Given the amount of money that's being spent here, we have to ensure that we are not just providing work for foreign shipyards," said Labor senator Kim Carr, who will take part in the inquiry.
