Australia signs strategic shipbuilding agreement with Austal
Austal Secures Major Shipbuilding Deal with Australia
Austal has officially entered into a significant shipbuilding agreement with the Australian Government, establishing a new subsidiary, Austal Defence Shipbuilding Australia, as the strategic builder for Tier 2 surface combatants in Henderson, Western Australia. This agreement, known as the Strategic Shipbuilding Agreement (SSA), designates Austal Defence Australia as the prime contractor for the LAND 8710 landing craft programs, which encompass the construction of up to 26 landing craft vessels. The deal marks a pivotal moment for Austal, reinforcing its role in Australia’s defense shipbuilding landscape.
Details of the Strategic Shipbuilding Agreement
Under the SSA, Austal Defence Australia will oversee all facets of the design, integration, construction, installation, testing, delivery, and acceptance of the designated vessel programs. This includes the construction of 18 landing craft medium (LCM) and 8 landing craft heavy (LCH) vessels. The government and Austal are currently finalizing contractual arrangements for these programs, with more information expected to be released once negotiations conclude.
Austal CEO Paddy Gregg emphasized the significance of the SSA, stating, “The government’s approval of the SSA is a defining moment for Austal. It will establish Austal Defence Australia as the Commonwealth of Australia’s strategic shipbuilder for Tier 2 vessels in Western Australia.” This agreement not only highlights Austal’s strong track record in defense shipbuilding but also its capacity to support the Australian Government in achieving its defense objectives.
The SSA will create a management framework and standardized terms for delivering Australia’s surface shipbuilding programs in Western Australia. The design and construction of the LCM is set to be the first initiative awarded under this agreement. Contracts for the LCM program are anticipated to be finalized in the first quarter of FY2026, with plans to construct 18 LCMs for the Australian Army over an eight-year period, at an estimated cost of A$1-1.3 billion. The final vessel is expected to be delivered by 2032.
