Report Says, Naval Shipbuilding In Australia Costlier Than Other Countries

According to a government-commissioned report, building naval ships in Australia generally cost 30 to 40 percent more than their building expenses in other countries.

RAND Corporation, a nonprofit global policy think tank has been making comparative studies of Australia’s shipbuilding system with similar operations overseas. Later, the nonprofit organisation evaluated the financial aspects and whether the sector is benefiting the government. Finally, the report arrived at the conclusion that the production of naval warships in Australia cost a "30 per cent to 40 price premium over the cost of comparable production at shipyards overseas", but finds "this premium could drop over time".

The report also informed that to continue supporting a naval shipbuilding industry will demand other specific requirements, including a fresh strategy. Meanwhile, the study confirmed that it is still unclear whether a domestic naval shipbuilding industry has been benefited economically. However, the industry has the ability to employ over 2,000 people in long-term arrangements, the report estimated.

The government expects the full report to initiate serious discussion involving naval shipbuilding industry’s future in Australia. Interestingly, Australia’s Defence Minister recently said that the country's shipbuilding industry needed "to step up to meet the challenge of building a sustainable naval sector". Striving for efficiency and concentrating on productivity is the only way Australia can continue to sustain a naval shipbuilding industry, said the Defence Minister at a conference in Canberra.

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