Asian shipyards that produce dozens of warships every year are vying for a lucrative Australian naval contract

North Asian rivals South Korea and Japan are emerging as early favorites in a multi-billion-dollar competition to build Australia’s new fleet of light frigates as the Albana government prepares to select its preferred designs as early as this week.

A total of five shipbuilders from four separate countries have been asked to submit proposals for a fleet of 11 new general purpose frigates (GPFs) that will begin replacing the Navy’s older Anzac-class warships in a project totaling more than $11 billion.

The companies competing for participation in the large-scale SEA 3000 project are Hanwha Ocean and Hyundai Heavy Industries (HII) from South Korea, the Japanese Mitsubishi Heavy Industries (MHI), the Spanish shipbuilding company Navantia and the German ThyssenKrupp Marine Systems (TKMS).

Under the GPF program, the first three Australian vessels will be built overseas, with the first to be delivered by 2029 before transferring construction to Henderson Shipyard near Perth.

Australia’s Department of Defense, which has regularly been accused of being too secretive and lacking transparency compared to its overseas counterparts, has strictly banned five commercial competitors from publicly discussing their GPF proposals.

Multiple defense industry sources not directly involved with the companies competing for the SEA 3000 say Japanese and South Korean firms will likely not be chosen as the final two options for the naval contract, in part for geostrategic reasons.

Germany is also being considered as a possible option as its proposal – the MEKO A-200 – has a modular design that can easily meet requirements such as the CEA radar and 9LV combat management system with “minimal changes”.

Although the Spanish variant of the ALFA 3000 has not yet been built, it is also said to be a flexible design allowing certain functions to be easily incorporated, but the need to have a Romeo helicopter on board may pose a challenge given the ship’s smaller size.

The head of the Navy’s patrol boats and specialized ships, Rear Admiral Wendy Malcolm, and Principal Assistant Secretary of Defense Cheryl Lutz are expected to travel to all four countries in November to brief them on Australia’s initial decisions on SEA 3000.

Japanese and South Korean shipbuilders started a dispute

Both Japan and South Korea are increasingly seen by Australia as important partners in the Indo-Pacific region, with the former now an official observer of AUKUS activities and the latter recently awarded a multi-billion-dollar infantry fighting vehicle project.

Earlier this year, Australian Navy chief Vice Admiral Mark Hammond praised Japan’s shipbuilding capabilities, and in February the US Navy Secretary applauded South Korea’s “cutting-edge” shipyards and encouraged them to invest in American projects.

Industry speculation suggests that the Japanese government has offered to purchase naval strike missiles from soon-to-be-built plant among Defense Industry Secretary Pat Conroy’s constituency if his design is chosen, although the idea has not been publicly confirmed.

British defense giant BAE Systems is also informally supporting MHI in preparing its bid for the SEA 3000, and the British company is already actively involved in Japan’s Global Combat Air Programme, along with Italy.

Despite geographic and strategic advantages, Japan has limited experience exporting military technology, while two major South Korean shipbuilders vying for the Australian prize are embroiled in a tangled legal dispute over stolen warship technology.

Last year, HII employees were found guilty of stealing warship technology related to the Korea Destroyer Next Generation project, and Hanwha Ocean has since filed a police complaint calling for an investigation into the allegations involving its larger rival.

In September, Hanwha Ocean welcomed USNS Wally Schirra to its Geoje shipyard, marking the first time the Korean shipbuilder has provided maintenance, repair and overhaul services to the US Navy, and the company has also recently established formal ties with Australian industry.