Lib leadership chaos threatens to torpedo defence deals
Leadership turmoil and the replacement of David Johnston as defence minister have combined to throw two important military contracts into disarray.
The tender to replace Australia's fleet of ageing armoured personnel carriers was to have been issued early last month but was put off by new minister Kevin Andrews.
The so-called LAND 400 contract is expected to cost taxpayers between $3 billion and $4 billion.
Australia plans to replace the Army's ASLAV and M113 armoured vehicles, which will soon be considered too outdated for a modern combat environment.
There are similar uncertainties over plans to replace Australia's Collins Class submarine fleet, with the project thrown into turmoil by the prospect of Tony Abbott being removed as leader.
Some of the Prime Minister's ministerial colleagues believe he has made a personal commitment to his Japanese counterpart Shinzo Abe to source the hulls for the subs from Japan.
They claim that should Mr Abbott be removed, the deal with Tokyo would collapse.
South Australian senator Sean Edwards said he would vote for Mr Abbott in a leadership spill if he guaranteed Australian shipbuilders would be able to bid to build the fleet of subs. One senior member of the Government said that if the PM were removed today or later in the year, Australia would build a fleet of new submarines in Adelaide.
Should a decision be made to build subs in Australia rather than source them overseas, the project could be pushed back yet again.
One industry figure said the delays in the tender for the LAND 400 contract were costly for the six teams interested in the contract, including those being overseen by BAE Systems, Boeing, Elbit Systems, General Dynamics, Raytheon and Rheinmetall.
Insiders believe the project has already been ticked off by the Government's razor gang - the Expenditure Review Committee of Cabinet - but query why a tender has not been issued.
The project is seen as crucial in protecting Australian soldiers from rocket-propelled grenade attacks. Australia's ASLAVs and M113s were designed 30 to 40 years ago and cannot withstand modern weaponry.
The 16-tonne ASLAV will be replaced by a 25-30-tonne vehicle and the 18-tonne M113 will be replaced by a 35-40-tonne vehicle.
A spokesman for Defence Minister Kevin Andrews said the Government would have more to say about LAND 400 "in the near future".
