Australia Close to Decision On New Submarine Contract

MELBOURNE, Australia --- Australian Prime Minister Malcolm Turnbull has indicated that a decision is close on the winner for the $36 billion contract to build Australia's new submarine class. Tenders have been submitted by Mitsubishi Heavy Industries Ltd. ThyssenKrupp AG and DCNS for the contract to build 12 new submarines.

Expectations are that the winning bidder would be announced before the next election, even if an early poll was called for July. Much depends upon the passage of two unrelated items of legislation through the Australian Government. One of these is a tax reform bill that, if rejected again would trigger a "double dissolution" election in which both houses of the Australian government would be subject to re-election.

If this takes place, the selected site for the construction of the submarines may well prove to be a decisive issue.

The Australian submarine contest is the first time since before the Second World War that Japan has offered its submarine designs for export. Mitsubishi is offering a modified version of the Soryu class diesel-electric submarine that is equipped with an air-independent propulsion system.

Until recently, this was considered to be the leading contestant in the bidding contest but it is unclear how the threat of an impending election would affect this situation.

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