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SA "alarm" as Payne distances Coalition from defence promises

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The Weatherill Government has expressed “alarm” after fledgling Defence Minister Marise Payne last night distanced the Commonwealth from its promise to send a $5 billion Offshore Patrol Vessel contract to South Australia.

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On an SA visit in August, former Prime Minister Tony Abbott suggested the “vast bulk of the work” on the patrol boats project would be “centred on Adelaide… because this is where the infrastructure is”.

He also told ABC891 at the time it would be “a condition of the evaluation process” that “the major build is centred in SA”.

The following day, SA Senator Simon Birmingham wrote an opinion piece for The Advertiser, saying “around $40 billion of investment on Future Frigates, Offshore Patrol Vessels (OPVs) and other surface ships will provide a steady stream of work for shipbuilders in Adelaide, which will support many more jobs in associated suppliers and have multiple economic benefits throughout our economy”.

“The scale and duration of this investment in South Australia is far greater than any other Federal Government procurement activity in any other state,” Birmingham wrote.

But Payne was less effusive last night, telling a Senate Estimates committee that the OPV evaluation process did not stipulate an Adelaide build.

Payne said a “competitive evaluation process is underway… which, to the best of my knowledge, does not refer to a location of build and I don’t intend to second guess that”.

State Defence Industries Minister Martin Hamilton-Smith said today the fact that “having promised the OPV will be built in Adelaide, the Government now has failed to put Adelaide in the tender is very alarming”.

“This is $5 billion worth of work and 800 jobs – 400 direct, 400 indirect,” Hamilton-Smith said.

“This is work that was to start in 2018, it would have covered the gap, the Valley of Death, until the frigates work started around 2020, and then submarines… so we need this work to ensure that our facility at Osborne doesn’t grind down to a handful of people, and we’ll have to crank up from a cold start to build the frigates [so] it puts that project in doubt.”

Shipbuilder ASC has warned without a major project in the pipeline there would be an exodus of skilled jobs, with insiders fearful that could count against SA’s bid as the major building hub for the Future Submarines.

They argue a coterie of powerful WA-based Coalition figures – including Julie Bishop, Mathias Cormann and ousted Defence Minister David Johnston – had been pressing the case to base the OPV contract out west.

But Hamilton-Smith insists “the OPV must be built in Adelaide”.

“That’s what was promised,” he said.

“The rest of what we’ve planned for – the future frigates and submarines – is at risk.”

SA Senator Nick Xenophon, whose party’s push for Lower House seats is predicated largely on honouring commitments for local defence projects – told InDaily “the Federal Government is positioning itself to do over SA on shipbuilding”.

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