By Stephen Dziedzic, ABC foreign affairs correspondent
Cabinet has picked the Japanese Mogami-class frigate. Photo: ABC News / Oliver Chaseling
- Japan has been picked to build Australia's next fleet of warships.
- Defence Minister Richard Marles says it is a significant moment in the relationship of the two countries.
- The government and Mitsubishi Heavy Industries will begin negotiations on the $10 billion contract.
Japanese shipbuilder Mitsubishi Heavy Industries has won a tight contest to build the Australian navy's new $10 billion fleet of warships, beating a bid from German rival Thyssen-Krupp Marine Systems.
The ABC has confirmed that cabinet on Monday night selected Japan's upgraded Mogami frigate over the German MEKO A-200.
The first three of the frigates are expected to be built in Japan, with the remaining eight to be built in Western Australia.
It is a major victory for Mitsubishi Heavy Industries (MHI) and for Japan, which has thrown substantial political resources into securing the bid.
The decision is also a vote of confidence in MHI, which has never built warships overseas before.
Defence Minister Richard Marles said the frigates would replace Australia's ANZAC-class ships, the oldest surface combatant fleet the navy has been operating since the end of World War II.
"This does represent a very significant moment in the bilateral relationship between Australia and Japan," Marles said.
"This is clearly the biggest defence industry agreement that will ever have been struck between Japan and Australia. In fact, it's really one of the biggest defence exports that Japan has ever engaged in."
Marles said the first would come into service by the end of this decade, closing a gap that would have otherwise meant Australia would not receive a new surface combatant until 2034, when the first of the Hunter Class vessels would arrive.
Defence Minister Richard Marles said the announcement was a significant moment in the history of the Royal Australian Navy. Photo: ABC News / Courtney Withers/File
Close observers of the contest say that while Japan's bid was more expensive, the Mogami frigate boasts more firepower and requires a smaller crew.
Japan has also said that Australia could receive the first of the upgraded warships ahead of its own navy - which the ABC has been told helped to tip the contest in its favour.
While the government insists it was making the decision on capability alone, Japan has leaned heavily on the blossoming strategic and defence relationship between the two countries as it lobbied for the contract.
The United States is also believed to have backed Japan's bid.
The government and Mitsubishi Heavy Industries will now begin negotiations on the contract, and will aim to finalise it this year.
- ABC
