Japan misses out as Australia awards sub contract to France

(From AP)

Australia announced Tuesday that French company DCNS had beat bidders from Japan and Germany to build the next generation of submarines in Australia’s largest-ever defense contract.

DCNS Shortfin Barracuda

DCNS Shortfin Barracuda

DCNS, Germany’s ThysennKrupp Marine Systems, and Japan’s Mitsubishi were in the running to build 12 conventional submarines that the Australian navy expects will cost at least A$56 billion ($43 billion).

Prime Minister Malcolm Turnbull said the French-designed submarines would be built in the Australian manufacturing hub of Adelaide.

“The French offer represented the capabilities best able to meet Australia’s unique needs,” Turnbull told reporters in Adelaide.

The Japanese bid was the early favorite and the contract promised to become Japan’s first fully fledged military technology transfer since World War II.

But Japan’s chances appeared to diminish when government lawmakers dumped Tony Abbott as prime minister in September and as the seasoned European exporters made their pitches.

Abbott saw the Japanese bid as having a strategic value by building on ties with Japan and the United States.

But others warned that Japan’s long-term cooperation in the submarine contract might hinge on Australia forming an alliance that could bring Australia into conflict with China, Australia’s most important trade partner. Read More

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