Austal lands $5 billion contract to build Army vessels, creates 1110 local jobs

West Australian-based shipbuilder Austal has signed $5 billion worth of contracts to produce Army vessels at the Henderson shipyard, in a deal the Albanese government claims will generate hundreds of local jobs.

Late last year The West Australian revealed Defence officials had secretly discussed constructing some of the vessels overseas, prompting Labor to publicly insist all work on the new landing craft fleet would occur locally.

Defence Industry Minister Pat Conroy will on Friday confirm that Austal — which in August struck a Strategic Shipbuilding Agreement with the Commonwealth — has received a $1b contract to first deliver 18 Landing Craft Medium vessels.

Another $4b deal has also been signed for a fleet of eight Dutch-designed Landing Craft Heavy vessels to be built at Henderson, each capable of transporting more than 500 tonnes of long-range precision strike weapons and other equipment by sea.

As part of the Landing Craft Heavy program, an initial $30 million will be given to the Western Australia Government to begin work on interim replacement facilities for the oil and gas sector which currently uses the Henderson Common User Facility.

The Albanese and Cook Governments have for months been negotiating how to minimise upheaval for non-defence industries at the facility as the Commonwealth works to overhaul the Defence Precinct at Henderson to begin building warships.

Eventually the Federal Government is planning for Austal to construct Japanese designed Mogami frigates at Henderson, but the strategic shipbuilder must first prove its performance on the Army landing craft projects.

“The Landing Craft program will further strengthen our sovereign industry, supporting continuous shipbuilding in Western Australia and ensuring Australia has the industrial capability and depth to keep Australians safe,” Mr Conroy said in a statement.

“The combined delivery of landing craft capabilities is expected to create more than 1100 direct and 2000 indirect jobs, providing a sustained pipeline of work that incentivises defence industry investment in skills, supply chains and infrastructure.”

Defence Minister Richard Marles has hailed the contracts as proof the Albanese Government is delivering “continuous naval shipbuilding in the West”, declaring the construction of landing craft vessels at Henderson will be the first step.

“These contracts will support thousands of direct and indirect jobs, while also equipping the Australian Army with the capabilities it needs for littoral manoeuvre and to undertake long range land and maritime strike,” he said.

“An increased focus on littoral manoeuvre will enable the ADF to respond more effectively in our region and keep Australians safe.”