Australian PM throws submarine tender open to domestic shipbuilder

PERTH - Australian Prime Minister Tony Abbott on Sunday promised the country's state-owned shipbuilder the option to tender for a lucrative submarine contract, seeking to shore up support for his leadership ahead of a crucial party vote on Monday.

South Australian Liberal Party Senator Sean Edwards had made his support of Abbott's leadership contingent on government-owned ASC Ltd, based in his home state, being allowed to tender for a job worth as much as A$40 billion (US$31 billion).

Edwards told local media that Abbott had given his assurance. "I've been in discussions surrounding the ability of Australian ship builders to be involved in an open, competitive tender which has been, up until today, something which the government has been somewhat reserved on," Edwards told The Australian newspaper.

Abbott, who had previously pledged that the vessels would be built at the ASC, began back-pedalling in July, signalling cost and schedule were paramount.

Late last year his Treasurer Joe Hockey said there wasn't time to hold an open tender, bolstering the likelihood that they would purchase 12 off-the-shelf stealth submarines from Japan to replace the ageing Collins class fleet.

Sources have said Australia is strongly considering a replacement for the Collins based on the 4,000-tonne Soryu-class ships built by Japan's Mitsubishi Heavy Industries and Kawasaki Heavy Industries.

Swedish defence firm Saab, France's state-controlled naval contractor DCNS and Germany's ThyssenKrupp Marine Systems have all also expressed interest in the Australian project.

Such a deal for Japan would mark its re-entry into the global arms market, just months after Prime Minister Shinzo Abe ended a ban on weapons exports as part of his efforts to steer the country away from decades of pacifism.

Abbott on Sunday said that a decision on the submarine fleet replacement needed to be made by the end of the year at the latest. He denied its was part of a deal to save his political life. "What we have always intended to have is a competitive evaluation process," Abbott told the Australian Broadcasting Corp.

Former Defence Minister David Johnston embarrassed the government and reduced the likelihood that the ASC would get the option by publicly saying last November that he wouldn't trust the company "to build a canoe." Johnston later apologised and was subsequently dropped from the Abbott ministry.

Edwards said he had been lobbying Abbott since mid-October on the issue and confirmed he would vote against a motion to remove Abbott from the leadership at a meeting on Monday.