Apr 16, 2015

Naval shipbuilding costs up to 40 per cent more in Australia - report | Manufacturers Monthly

It costs 30% to 40 % more to build naval ships in Australia than it does overseas, according to a government-commissioned review into the industry.
However, as the Guardian reports, the study by the study the US-based military research thinktank Rand Corporation added that the comparative costs “can be significantly influenced by foreign exchange rates”.
It said the costs could be reduced by introducing the rolling production of new ships and the use of mature designs.
According to the report, rolling production would help avoid the so-called “valley of death”, or periods in between government contracts in which ship builders have no work.
It said the current plans to purchase frigates, offshore patrol vessels and new submarines appear to lead to a valley of death.
“Because construction of the future frigate will not start until 2020 ... there is the potential that demand for workers could fall to zero, with reverberations that may last three to five years after future frigate production ramps up,” the report said.
“Without some way to lessen the gap between the end of the [air warfare destroyer] program and the start of the building of the future frigate, the industrial base will have to ramp up its workforce from an almost negligible level to 2,700 skilled personnel in approximately eight years.”
The report also found that the economic benefits are unclear but the industry may be able to employ 2,000 people in the long term.

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