Hailing the end of the so-called “valley of death” of shipbuilding jobs, Defence Industry Minister Christopher Pyne will on Thursday reveal Sydney-based construction giant Lendlease has been selected as the managing contractor for the Osborne South Shipyard construction.
Hiring and other mobilisation work will start this month and the new shipbuilding infrastructure is expected to be ready for the $35 billion project to build nine frigates, starting in 2020.
It is expected the announcement of 600 construction jobs for the Osborne yard’s expansion will be the first of hundreds of naval shipbuilding jobs to be detailed in coming weeks and months.
A PwC study exclusively revealed by The Advertiser yesterday forecast the Adelaide-based $89 billion naval shipbuilding program, headlined by the $50 billion project to build 12 new submarines, would create 8000 jobs in South Australia over 40 years and deliver a $134.4 billion boost to Gross State Product.
Mr Pyne, above, said the Osborne South Shipyard construction project would create 600 jobs at its peak, the biggest hiring at the Techport shipbuilding precinct since construction of three air warfare destroyers started in 2010/11.
“The valley of death is over and we are now seeing an upturn of employment in naval shipbuilding in our state that will only continue to increase as these new projects gain momentum,” said Mr Pyne, also the Sturt MP.
Osborne-based shipbuilder ASC axed 130 jobs in January as part of the continuing decline of work on the $9 billion air warfare destroyer project, which peaked at about 1500 Adelaide jobs in early 2015 ahead of the first ship’s launch.
Finance Minister Mathias Cormann, whose department owns the Techport precinct, said the $230 million purchase of the shiplift and wharf from the State Government in May had enabled work to progress quickly.
Senator Cormann declared the contractor announcement the latest step to “enable our historic investments in naval shipbuilding to commence on schedule”.
Mr Pyne in May revealed the $535 million infrastructure build to support the frigate construction, along with the first two of 12 offshore patrol vessels to be built at Osborne from next year, before the $3 billion project moves to Perth.
The first sod was turned in August on the $535 million yard — part of an expected $1.3 billion infrastructure investment at Osborne.
The Advertiser at the time revealed the new yard has been designed so most work can occur indoors and will use the latest technology, including robotic welding to increase accuracy and efficiency.
BUSINESSES URGED TO GET EXCITED
The South Australian business community is being urged to get excited about and prepare for the $89 billion “economy-changing” opportunity linked to defence shipbuilding work.
The Australian Defence Force will get a new fleet of submarines, frigates and offshore patrol vessels over the next few decades with most of the work being done in SA and WA.
New research by professional services firm PwC yesterday revealed the projects will deliver a massive $134.4 billion boost for the state, including 8000 jobs.
French company Naval Group (formerly DCNS) has won the $50 billion contract to build 12 submarines at Osborne’s Techport naval shipbuilding precinct.
Nine frigates will also be built at Osborne in a $35 billion project from 2020, as well as the first two of 12 offshore patrol vessels from next year before the project transfers to Western Australia. Submarine construction will start in 2022-23 and the last boat is likely to enter service in the early 2050s. For much of this time, the frigates project will also be running.
Defence Minister Christopher Pyne, BAE Systems Australia chief executive Glynn Phillips and News Corp Australia’s SA managing director Ish Davies will be discussing the economic boost in store for the state at an event in Adelaide on Thursday night.
The event will also celebrate a seven-week project that analysed the opportunities linked to the Naval Shipbuilding Program, which culminated in a magazine publication.
Mr Phillips highlighted the need for SA to keep its “eye on the ball” to ensure shipbuilding provides genuine, long-term opportunities to create new industries and thousands of highly paid jobs.
“It is important we get this right from the start. We need to work together, and collaborate across industry and academia. We need to be well prepared to meet the challenges ahead,” he said.