From AdelaideNow:
Defence firm targets car plant site
KIM WHEATLEY
October 01, 2009 12:01am
A EUROPEAN company bidding for a $1.5 billion defence contract has named South Australia as its preferred location to build 1300 light armoured vehicles.
The disused Mitsubishi site at Tonsley Park was discussed as an ideal location to build the fleet – labelled "SUVs on steroids" – in high-level talks in Switzerland this week.
Treasurer Kevin Foley met executives from military vehicle manufacturer MOWAG, a subsidiary of U.S. defence giant General Dynamics, during a 12-day trade mission that also included visits to the U.S., the United Kingdom and Spain.
Mr Foley said a successful MOWAG bid would guarantee jobs over three decades to build and maintain the fleet.
"These vehicles will be a major element of the armed forces and will be requiring significant ongoing maintenance and would lead to many, many new jobs here in SA," Mr Foley said from London, ahead of his return to Adelaide this morning. "It's a huge contract, and these are very labour-intensive constructions so there will be a lot of jobs involved.
"(General Dynamics) already have a facility in SA and are very, very open to the proposal to build in Adelaide and I'd be quietly confident that if they're successful, they'll pick Adelaide."
The $1.5 billion contract is part of Defence's $6 billion Land 121 Overlander project to replace all army vehicles.
Mr Foley confirmed rumours in defence circles that MOWAG was interested in Mitsubishi's Tonsley Park site, but said the company was also discussing other Adelaide options.
The Government has been negotiating to acquire the 65ha Mitsubishi site to transform it into a clean technology and renewable-energy hub.
"They would need a major facility in Adelaide, up to 20,000sq m, so Mitsubishi is certainly one site but it's not the only site," Mr Foley said.
"They're having a look at other options, they're in some commercially sensitive negotiations with a couple of locations."
Winning the contract would substantially enhance SA's reputation as a defence hub, broadening our naval success cemented by the $8 billion Air Warfare Destroyer and $30 billion next-generation submarines contracts.
It would also complement the expansion of the Edinburgh RAAF base, where 1200 personnel are being relocated from the 7RAR Mechanised Battalion in Darwin in 2011.
Mr Foley denied there was a need to offer incentives.
"With the critical mass that's being developed in SA now with the naval work, and the work we're doing for the Joint Strike Fighter, Adelaide is already developing such a status that firms want to be in Adelaide and don't need to be offered financial inducements," he said.
"Our next mission will be to support the company in their negotiations with the Federal Government."
While MOWAG appears to be a leading contender for the contract, it will be a fierce contest.
In Canberra this week, European defence giant Thales unveiled a mock-up of its seven-tonne vehicle called the "Hawkei", dubbed an "SUV on steroids", as part of its pitch for the contract.
Thales employs about 300 people at its Bendigo plant, which produces the Bushmaster armoured vehicle.
While the army has boosted orders for the vehicle, the plant has just three years of back orders and support contracts.
Bendigo is a marginal seat and its understood the Federal Opposition has been lobbying heavily for the Thales contract.
Companies are expected to produce a prototype by the end of next year, and the Federal Government is expected to choose the successful tender from 2012-13.
Mr Foley's trade mission, with Defence SA chief executive Andrew Fletcher, included talks with Spanish company Acciona, which is part of the winning bid to build the $1.8 million desalination plant at Port Stanvac.
Acciona operates two wind farms in SA and as a world-leading solar technology developer, is examining new options in the state.
The trade mission also included further discussions with the the U.S. Navy on Port Adelaide becoming a repair base for warships.
Sounds like a good use of the old Tonsley site.
I don't like MOWAG's chances of winning the contract tho as they are going up against Thales.
Thales's Bushmaster are one of the best pieces of kit the army has utilised.
