Yard Austal given Lift after Defence contract Win
31 Oct 2003
Shares in Austal climbed nearly 30% on Friday after its subsidiary,
Austal Ships, and Defence Maritime Services, won a half-a-billion
dollar contract over 15 years to build Australia's new coastline
In an acquisition initially worth $375m, Austal Ships and Defence
Maritime Services (DMS) will build 12 new Armidale-class vessels
to replace the Royal Australian Navy's ageing fleet of 15 Fremantle-class
Austal Ships will be involved in design and construction of
the ships while DMS will provide logistical and maintenance support.
Austal managing director Bob McKinnon is looking forward to negotiating
the final contractual arrangements with the Department of Defence.
The selection of Austal/DMS recognises the team's ability to
provide RAN with economical, high performance ships and cost-effective
through-life support to ensure Australia's patrol boat capability
is delivered in the best possible manner
The RAN project was expected to add momentum to Austal's push
into the international patrol and military vessels market and
had already assisted the company to secure an order in June for
10 high-speed patrol boats for the Middle East..
Once the contract was in place, Austal would begin building the
first of the 56 metre patrol boats and the entire process will
take 42 months.
This will provide Austal with a steady base load of work for
three-and-a-half years. At the same time, our production capacity
enables us to simultaneously build ferries and other vessels,
and the company aims to vigorously pursue new contracts in these
Defence Minister Robert Hill is reported to have said that Austal/DMS
beat a bid by defence company Tenix because it offered the best
value for money.
The new aluminum boats would operate out of Cairns and Darwin
and be built at Austal's Henderson yard near Fremantle, in Western