Under the proposal the sub corp would be divided into submarine and warship arms, The West Australian reported today, with the winner of the contract to build 12 new submarines for Australia expected to buy the submarine division and the warship portion to be sold off separately to the highest bidder.

SA Senator Xenophon told InDaily there was around $89 billion dollars worth of shipbuilding currently up for grabs “and at this stage I reckon we’ll get 10 per cent of it, which would be a body-blow for the state”.

He said it would drive greater efficiencies to retain the bulk of the operations in one place and “it makes sense that we have a centre of excellence in shipbuilding here and do the sustainment where the bases are”.

“I think the fix is in,” he said.

“It seems the Government through a number of its actions is actually devaluing ASC… it’s going to be split for a bargain basement [price] and in the process potentially thousands of jobs will be lost to the state.”
One potential bidder for the warship assets is the Australian stock exchange-listed Perth ship builder Austal.

“We have always been interested in getting involved in shipbuilding in Adelaide,” Austal chief executive David Singleton told The West.

“If acquiring ASC in Adelaide is part of that route, we are happy to consider it.”

The contract for the construction of Australia’s new generation submarines to replace its ageing Collins class is due to be announced this year.

Contenders for the nation’s largest ever defence procurement project – worth tens of billions of dollars – include companies from Japan, Germany and France.

The report, if proven, casts doubt on former Prime Minister Tony Abbott’s promise of billions of dollars of shipbuilding work for Adelaide.

Last August Abbott promised 2500 ongoing shipbuilding jobs “focused on Adelaide” from 2020 onwards. He said two major defence construction projects – offshore patrol vessels and new naval frigates – would be brought forward.

“It’s a terrific announcement for Adelaide,” he said.

However, The West reports that the Government’s favoured approach would create two centres of specialisation – submarines in Adelaide, and warships in WA.

Several Perth companies were also in the frame to build the hulls for the future submarines, with construction to happen at ASC.

Acting Defence Industries Minister Susan Close said in a statement that SA remained “the natural home of shipbuilding in this country”.

“South Australia has the skilled workforce ready to start work on the Offshore Patrol Vessels and we are primed to build the Future Frigates and next generation of Submarines,” she said.

“Hundreds of shipbuilding workers have already lost their jobs and there will be many more to come – the industry and the workers need certainty and stability now… if The Turnbull Government doesn’t make a decision about the Offshore Patrol Vessels and Future Submarine build locations before the election, South Australians can assume that they won’t be built here.”

– with AAP