CANBERRA, Australia—Australia announced Tuesday that French company DCNS has beat out bidders from Japan and Germany to build the next generation of submarines in Australia’s largest-ever defense contract.
DCNS, Germany’s ThysennKrupp Marine Systems and Japan’s Mitsubishi Heavy Industries were in the running to build 12 conventional submarines that the Australian navy expects will cost at least 56 billion Australian dollars ($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.
French President Francois Hollande said in a statement that the deal was a “decisive step forward” in the strategic partnership between France and Australia. French Defense Minister Jean-Yves Le Drian told Europe 1 radio that it was a “major victory for the French naval industry.”
The Mitsubishi bid was the early favorite, and the contract had promised to become Japan’s first fully fledged military technology transfer since World War II.
Japanese Defense Minister Gen Nakatani said the outcome was “very regrettable.” He told reporters that he would seek an explanation from Australia to find out why the Japanese submarine was not selected “so we can reflect the findings to future operations.”
Mitsubishi said in a statement, “It is deeply regrettable that Japan’s capabilities were not sufficiently conveyed, which has led to the result announced today.”
Japan’s chances appeared to diminish when Australian government lawmakers dumped Tony Abbott as prime minister in September and as the seasoned European exporters made their pitches.
