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SA out of contention for $5 billion defence build

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South Australia’s fading hopes to host the $5 billion Land 400 defence project were dashed today, with BAE Systems announcing it would assemble the combat vehicles at the old Holden factory in Victoria if it wins the contract.

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The company is one of two short-listed bidders to produce the Land 400 AMV35 military vehicles. The other bidder, German company Rheinmetall, has already chosen Queensland as its preferred site if it wins the contract.

The project is worth $5 billion and is expected to create up to 2000 jobs.

South Australia had been hoping to host the build at Edinburgh, in the northern suburbs, as part of its efforts to replace the manufacturing jobs that will disappear when Holden closes in October. It put forward a comprehensive pitch, including a support package from the State Government understood to be worth around $20 million.

However, the state began to lose hope this year, with state Defence Industries Minister Martin Hamilton-Smith telling an industry website in May that South Australia was unlikely to capture the contract.

While both BAE Systems and Rheinmetall have a presence in South Australia, industry speculation suggests the state’s big win on naval shipbuilding, including the future submarines project, might have worked against it.

Hamilton-Smith told InDaily today that while the assembly of the vehicles would go interstate, there were still opportunities for South Australian companies in the supply chain to benefit from the project, particularly in relation to the high-tech components of the Land 400 combat systems.

“We remain focused on Land 400 but we are realistic about our opportunities for the project,” he said.

“South Australian companies, the Government and our Defence Teaming Centre will be all over the supply chain opportunities.”

The Minister said the Government had offered a “prudent” package of support to attempt to attract the project, and he believed the Victorian and Queensland governments might have outbid the South Australian offer by a significant margin.

“We understand that they may have offered significantly more than the State Government felt was appropriate for the number of jobs and investment value on offer.”

He said the Government’s major focus had been gaining the lion’s share of the $90 billion naval shipbuilding program.

The Victorian Government, however,  was jubilant today.

“Victoria is the traditional home of vehicle manufacturing, and this project would create thousands of jobs at a time when our automotive sector is in transition,” Victorian Premier Daniel Andrews boasted today.

Bushmaster and Hawkei vehicles are already being manufactured for the armed forces in Bendigo.

Victoria has signed an agreement with BAE to build the vehicles at the old Holden site in Fisherman’s Bend in Melbourne.

– with AAP

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