Tony Abbott pledges open tender for submarines to win over SA Liberals

PM reportedly seeks support from South Australian Liberal MPs in leadership spill by promising that Adelaide firm would be able to tender for the multibillion dollar project, which previously looked to be going to Japanese shipbuilders

One of the biggest defence acquisitions in Australian history appears to have become a pawn in the federal leadership contest, with Tony Abbott bowing to months of pressure to allow a competitive tender.

The prime minister, who faces a spill motion in the party room on Monday, had previously resisted calls to proceed with an open tender for the future submarine project amid strong signs that the government was inclined to reach a deal with Japan.

The issue was particularly sensitive in South Australia because of the prospect of government-owned shipbuilder ASC missing out on the chance to build 12 new submarines.

News Corp’s Adelaide Advertiser reported on Sunday that the prime minister had sought to shore up support from South Australian Liberals by promising ASC would be able to tender for the job, worth between $20bn and $40bn.

Guardian Australia has independently confirmed this from two government sources. It is understood the prime minister is now offering his support for a competitive process for the future submarine project.

The opposition leader, Bill Shorten, said the decision was a sign that policy making “under this chaotic Liberal government” was “a complete shambles”.

In an interview with the ABC on Sunday, Abbott said it was reasonable to expect the government to try to secure the best value and the best product and “to give Australian suppliers a fair go”.

He insisted he had “always intended to have a competitive evaluation process” – despite past comments by the treasurer that there was no time to do so.

The treasurer, Joe Hockey, previously strongly rejected calls for an open tender, saying the nation did “not have time” for such a process to replace the Collins class fleet and needed to focus on making the right decision on submarine construction.

“There are very limited suppliers, and there are very limited number of suppliers that can actually deliver a submarine to Australia at a time when the Collins class are being decommissioned,” Hockey said in December.

“It usually takes 10 to 15 years to build a submarine from development stage to outcome in the water. Labor knew that. The first Collins class sub is decommissioned in 2026, so we’ve run out of time in a sense and we need to make decisions now. We don’t have time to go through a speculation process. We do not have time for people to suggest that they can build something that hasn’t been built.”

Before Abbott’s change of heart, the South Australian Liberal senator Sean Edwards warned that he might not support Abbott in the spill unless the government shifted its stance on the submarine project.

Edwards subsequently told News Corp the prime minister rang him on Sunday “with this very good news” committing the government to a full and open tender. “This should lead to hat throwing, to punching the air,” Edwards said.

“I now call on the management of the ASC and the unions to come together like they never have before and prove that the faith I’ve had in them through the period from 14 October when I commenced my lobbing of the PM that they can be the world class, competitive builder of submarines that they say they can be.”

Labor and unions had also been applying pressure on the government over the submarine issue. Before he was dumped as defence minister in December, David Johnston, came under fire for saying he would not trust ASC to build a canoe.

Contributor

Daniel Hurst, political correspondent

The GuardianTramp

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