Uncertainty and delays loom over west Australian naval shipyard project
Concerns are growing over a $2 billion project to construct new Army water landing craft, with defence industry figures warning design delays could throw other naval projects at Western Australia's Henderson shipyard into chaos.
Last year, the Albanese government announced plans to "accelerate" the delivery of a "landing craft medium" fleet, with the first of the littoral vessels scheduled to be ready in 2026, but the ABC can reveal final blueprints are yet to be approved.
Under project LAND 8710 Ph1A, private Australian company Birdon has been chosen to work with Perth based shipbuilder Austal to produce the Landing Craft Medium (LCM) fleet to eventually replace Army's ageing Mark 8 mechanised fleet.
However, sources familiar with the LCM project warn the delivery date is now facing delays of up to two years, which is likely to affect subsequent plans to build a fleet of larger Army landing vessels, as well as other shipbuilding projects at Henderson.
"They are about to go into Preliminary Design Review with an immature design and lots of risk," one industry figure tells the ABC, speaking on the condition of anonymity because they are not authorised to comment publicly.
"They still haven't given the bad news to the (Defence) Minister, and they have had to bring in a retired British Admiral to broker a deal between Defence, Birdon and Austal to try and get it all on track."
In a statement the Defence Department insisted current planning remains for a 2026 delivery date, but a spokesperson acknowledged a final design was yet to be approved on what is widely regarded by industry as a relatively simple construction project.
"Austal, supported by Birdon, is under an interim contract to mature the Landing Craft Medium design.
A contract to complete the design and build the 18 vessels is currently under negotiation," a Defence spokesperson told the ABC.
A similar project in the United States to produce an Army logistics vessel known as Manoeuvre Support Vessel-Light (MSV-L) is considered a possible alternative for Australia, but last month it was reported to be facing cancellation.
From next year Austal is also scheduled to begin building eight Landing Craft Heavy vessels at Henderson, based on the existing LST100 design from Dutch owned shipbuilder Damen.
Both the medium and heavy landing craft projects, along with acquisitions of amphibious vehicles, are part of an overhaul of the Australian Army announced by the Albanese government to improve combat capabilities in littoral operations.
In late 2023 the Albanese government also placed the building of Arafura class Offshore Patrol Vessels, which is still being completed at Henderson shipyard, on the Defence Department's Projects of Concern list.
As Austal continues its work as the federal government's "strategic shipbuilder" in Western Australia, a South Korean company has been granted US permission to acquire almost twenty percent of the business which has large operations in Alabama.
On Tuesday Hanwha Group announced it had received approval from the U.S. Committee on Foreign Investment (CFIUS) to increase its shareholding in Austal to 19.9% from the current 9.9%.
Australia's Foreign Investment Review Board (FIRB) is expected to take several months before giving its verdict on the proposed increase in Hanwha's ownership share of Austal.
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