Submarine decision coming soon: PM

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Subs would cost more to build locally

Defence analysis reportedly shows that building subs in Australia would cost more than buying them.

CANBERRA, April 20 AAP - Prime Minister Malcolm Turnbull says the long-awaited decision on new submarines will be announced soon and that's likely to be next week.

Mr Turnbull refused to be drawn on dates but it's set to occur ahead of the budget on May 3.

"It will be made in due course. It will be made shortly," he told Adelaide radio 5AA

Three bidders are competing to supply 12 new submarines to replace Australia's six ageing Collins boats.

TKMS of Germany is offering its Type 216, DCNS of France is offering its Shortfin Barracuda and the Japanese government in conjunction with shipbuilders Mitsubishi Heavy Industries and Kawasaki Shipbuilding Corporation, is offering its Soryu-class boats.

This will be Australia's biggest and most complex defence procurement, costing as much as $150 billion over the life of the project.

The government launched the competitive evaluation last year, inviting bidders to quote for constructing in Australia, overseas or a bit of both. However, the new vessels will certainly be built entirely or mostly in Adelaide.

Mr Turnbull said there had been a very careful process to evaluate the bids.

"We are making these decisions carefully as a responsible and methodical government should," he said.

TKMS chairman John White rejected media reports suggesting building new subs in Australia would cost 30 per cent more than overseas.

He said TKMS had undertaken to build in Australia for a price no greater than in Germany and no more than $20 billion.

"We are surprised that there is continuing, almost malicious, lack of confidence in Australian industry capability, given previous successes like the ANZAC Frigates," he said in a statement.

Similarly, the Japanese embassy in Canberra rejected media reports claiming their design would have insufficient range, would be too noisy and that proposed lithium-ion batteries were unsafe.

"If there was any reliability issue with the batteries, Japan itself would not have decided to use lithium-ion batteries in its own submarines," it said in a statement.