Japan's Mitsubishi Heavy Industries beats German rival to build navy's frigate fleet

The Australian

2 days ago

Japan's Mitsubishi Heavy Industries will build the navy's new fleet of frontline warships after beating its German rival in a hard-fought contest that will shape the Australian Defence Force for a generation.
Defence Minister Richard Marles said MHI's upgraded Mogami was selected over Thyssen­Krupp Marine Systems' MEKO A-200 because it was the more capable ship, and the company had a better industrial plan.
But he said the choice also had strategic benefits, declaring 'there's no other country in the world that is quite as aligned with Australia as Japan'.
'This decision represents the biggest capability acquisition decision that the government has made since announcing the optimal pathway to acquiring our future submarine capability back in March of 2023,' Mr Marles said.
'The Mogami-class frigate is the best frigate for Australia. This is currently a frigate which is in service in the Japanese Maritime Self-Defence Force.
'It is a next-generation vessel. It is stealthy. It has 32 vertical launch cells capable of launching long-range missiles. It has a highly capable radar, highly capable sonar. In that sense, it is generally a general-purpose frigate capable of engaging in air warfare and undersea warfare.'
The program will cost $10bn over a decade, delivering at least the first three vessels. Mr Marles refused to say what the per-ship cost of the program would be, arguing it would undermine the government's bargaining position as it negotiated a final contract price with MHI.
Tokyo threw everything it had at winning the contest to build 11 general-purpose frigates, establishing a powerful 'all Japan' committee that leaned heavily on the countries' 'quasi alliance' to lobby the Albanese government.
The first three of the ships are set to be built in Japan, with the remaining eight to be built at Western Australia's Henderson shipbuilding precinct by Austal, under a strategic shipbuilding agreement also announced on Tuesday morning.
Cabinet's national security committee selected the Japanese ship at a meeting on Monday evening, with the bidders informed of the decision soon after.
Defence assessed the competing proposals for eight months but it's believed the department did not come out strongly in favour of either vessel, leaving the choice to the NSC members.
TKMS is bitterly disappointed. It argued its frigate was a cheaper ship that more closely met the government's requirement for a vessel already 'in the water'.
While the Mogami is already in service with the Japanese navy, the first upgraded version of the vessel is yet to be completed.
Unlike TKMS, MHI has never built warships in a foreign country.
But MHI argued it had successfully exported military technology to the US, mitigating any risk associated with its bid.
Japan had also offered to allocate an already-in-production ship to Australia, accelerating the delivery of the first vessel, which the Albanese government wants to have in service before the end of the decade.
The national security committee of cabinet is chaired by Anthony Albanese and includes Mr Marles, Foreign Minister Penny Wong, Defence Industry Minister Pat Conroy, Treasurer Jim Chalmers and Finance Minister Katy Gallagher.
Mr Conroy previously told The Australian that the decision would be made on the frigate design and the bidders' industrial plans, rather than geopolitical considerations.
But both bidders were acutely aware of the government's reluctance to disappoint Japan – one of Australia's most important Indo-Pacific partners. The US government is believed to have quietly backed the Japanese proposal.
Japan was determined to win the contest after losing a bid to build Australia's next-generation submarines to France's Naval Group, which ultimately lost the contract when the Morrison government committed to the AUKUS partnership.
The latest decision comes amid the botched Hunter-class frigate program, which has blown out in cost to a whopping $9bn a ship, with the first not due to enter service until at least 2032.
In a briefing to industry stakeholders last month, Japan's top diplomat in Canberra said selecting the Mogami would kickstart an advanced manufacturing boom in Australia.
Ambassador Kazuhiro Suzuki said at least 12 major Japanese companies were preparing to invest in Australia if MHI's bid was successful, while promising valuable international exposure for top Australian defence firms.
Mr Suzuki said handing MHI the contract would also cement Japan's quasi alliance with Australia, sending a 'powerful message … because deterrence is, after all, about psychology'.
'Japan and Australia held 39 joint exercises last year, including multilateral ones – roughly one in every nine days somewhere in the world,' he said.
'To deepen this co-operation, standardising equipment is really the key. That requires a shared defence-industrial base, which will improve the resiliency of both our forces and industry.'
The MEKO-A200 would have been equipped with the more familiar Saab 9LV combat system, making it an easier transition for sailors who had served on the navy's Anzac-class frigates.
But the Mogami is fitted with a Japanese combat system that is said to work seamlessly with those used by US ships.
A key selling point for the Japanese vessel was its claimed crew size of 90, compared to 120 for the MEKO. The ship also has a claimed operational life of 40 years compared to 30 years for its German rival.
Peter Dean, from the ANU's Strategic and Defence Studies Centre, told The Australian this week he believed the Japanese ship would win the contest.
'It meets the requirements for enhanced lethality, but most importantly the Japanese have offered ships to the RAN that are already being built,' Professor Dean said.
'This means that the Mogami has a far better chance of meeting the government's 2029 deadline to have the first ship in the water. TKMS would struggle to meet that deadline as they can't start to build until contracts are signed.
'The wildcard is the German ship is supposedly cheaper and that TKMS has an established record of partnering for industrial builds – experience the Japanese don't have.'
Australian Strategic Policy Institute senior analyst Euan Graham said he had been told the Japanese were 'ahead on every significant criteria except price'.
He said Japan's offer to provide a first ship to Australia out of its own production schedule would also mitigate program risk for Australia. Ben Packham Foreign affairs and defence correspondent
Ben Packham is The Australian's foreign affairs and defence correspondent. He has been a journalist for more than 25 years and is the 2024 recipient of the prestigious Lowy Institute Media Award. Nation
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