A Geelong senator has called for certainty over the future of a massive defence project amid reports it could move offshore.
Bidders vying for the LAND 400 Phase 3 contract have reportedly been asked to provide new pricing and support for the recently rescoped project, including the option to move production overseas.
Among the bidders is South Korean company Hanwha, which has proposed to build its “Redback” infantry fighting vehicles at Avalon.
Deputy Prime Minister and Corio MP Richard Marles said he had recused himself from decisions over lucrative defence contracts for army infantry fighting vehicles last year.
“That is a matter that I have recused myself from because of the equities, which exists within my electorate,” he told the media on Friday afternoon.
The government is understood to be exploring other location options because of the “urgency” outlined in the recent defence strategic review.
As part of the overhaul announced last month, the number of vehicles funded under the project was slashed from 450 to just 129.
“The decision to re-scope phase three of LAND 400 is really a decision around reprioritising defence spendings to make sure that we are focusing on building a mobile and nimble and agile Australian Army,” Mr Marles said.
Hanwha Defense Australia Redback Infantry Fighting Vehicle (front) and Rheinmetall Defence Australia LYNX KF41 Infantry Fighting Vehicle (back), conduct LAND 400 Phase 3 user evaluation trials at Puckapunyal Military Area, Victoria.
But Victoria Liberal Senator Sarah Henderson, who is based in Geelong, called for certainty on the project.
“The industry is already hurting after the government’s Defence Strategic Review saw Army capabilities cannibalised by massive cuts to the Howitzer defence project, based at Avalon, and the LAND 400 Phase 3 infantry fighting vehicles program,” she said.
“Now Labor is delaying its decision for a preferred tenderer for LAND 400 Phase 3, which was due last year, even further.”
It comes weeks after the federal government announced phase two of Geelong’s multi-billion dollar Howitzer project would be scrapped, with reviews finding the weapons would not provide enough lethality or range.
“This is causing considerable harm to the Geelong-based bidder, Hanwha Defense Australia,” Senator Henderson said.
“It is time for Defence Minister Richard Marles and the government to stop dragging their feet and provide clarity and certainty to defence industry.”
Minister for Defence Industry Pat Conroy, who will decide the fate of the contracts, said the government was spending record amounts in the sector.
“In all tender evaluations, Australian industry content is a positive factor in Government considerations,” he said.
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