French military shipbuilder DCNS Group has won a $40bn (£27.6bn) submarine contract from Australia in a hard-fought global race for the politically charged deal.
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Insisting that the decision followed a highly competitive bidding process, Mr Turnbull said the new fleet would be built in South Australia and create about 2,800 jobs.
Mr Morrison is a member of the National Security Committee and said he had been “very involved” in finalising the new submarine bid.
Mr Abbott said the ties were “more than strong enough” to withstand any disappointment. His office said in a statement that the contract marks a decisive advance in the strategic partnership between the two countries.
DCNS, Germany’s ThysennKrupp Marine Systems and Japan’s Mitsubishi Heavy Industries were in the running to build 12 conventional submarines that the Australian navy expects will cost at least 56 billion Australian dollars ($43 billion).
Foreign Minister Julie Bishop told reporters the bilateral relationship was in good shape.
Japan was the early favorite and last November Tokyo said handing it the contract would help bolster regional security.
For Australia, cooperating with Japan risked angering its biggest trading partner China.
“Military modernization in our region will not be directed against Australia, but it will mean the defense capability edge we have enjoyed in the wider region will significantly diminish”, the paper states.
Asked if the decision to go with France would upset key ally the United States, Turnbull said the choice of contractor was “a sovereign decision for Australia”. It will be a vital part of the country’s Defence capability. We need submarines with considerable range.
Grevatt added that DCNS is now involved in submarine license-building programs in India and submarine support programs in Malaysia that have both involved substantial transfers of submarine-related technologies and knowhow.
DCNS proposed what it says is the world’s most advanced conventionally powered submarine – the Shortfin Barracuda Block 1A – as its pre-concept design for Australia’s future submarines. As such, it insisted most of the build was in Australia.
America’s Raytheon Co (RTN.N), which built the system for Australia’s ageing Collins-class submarines, is vying for a separate combat system contract with Lockheed Martin Corp (LMT.N), which supplies combat systems to the U.S. Navy’s submarine fleet.
The new class sub with a pump jet-propulsion system offers a quieter traveling capabilities and will be called Shortfin Barracuda after a predatory fish found in Australian waters.
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“We respect the decision of the Australian government to choose DCNS as its preferred partner for the procurement of new submarines and wish Australia and all involved every success in the realization of this demanding program”, said Torben Beckman, a spokesman for Thyssenkrupp.
