THE Philippines is working on a government-to-government agreement with Australia that will grant regional shipbuilder Austal Philippines the P30-billion contract to build offshore patrol vehicles (OPVs) for the Navy.
Defense Secretary Delfin N. Lorenzana on Wednesday disclosed that Manila is nearing to conclude a deal with Canberra in the production of six OPVs for the Philippines. Once approved, this will allow Austal Philippines, whose parent unit is based in Australia, to assemble naval ships for the country’s maritime forces.
“I think if we can do the proposal fast, we could be signing the contract by the end of the year. This will grant Austal the right to build six OPVs, one at a time, for our Navy. Austal will be capable of finishing those vessels on time,” Lorenzana said in a news briefing in Cebu.
Austal Philippines, German Lurssen Yachts and Dutch Damen Group are competing for the contract to build OPVs for the Navy. However, Austal Philippines is most poised to bag the P30-billion deal if the government-to-government agreement between the Philippines and Australia is approved.
“There are several modes for Austal to win the contract. One of them is through government-to-government negotiation, wherein we ask Australia for specific equipment. This scheme is easy, fast and guaranteed by the other government,” Lorenzana explained.
Once the contract is signed, Austal Philippines will begin work on the OPVs and can deliver all six of them in two years’ time. As it will be the first time the shipbuilder will assemble military vessels in the country, it is eyeing to beef up its labor force by employing more locals in its expanded shipyard in Cebu.
Austal Philippines boosted the capabilities of its shipyard with a $20-million investment in an expanded facility, the John Rothwell Assembly Bay—named after Austal’s founder—designed to accommodate large vessel projects for hull assembly, final outfitting and painting capacity.
With a larger workspace, the shipbuilder can also deliver on naval vessel projects, such as the OPVs required by the Navy. The purchase of patrol ships is part of the modernization program of the Armed Forces of the Philippines.
The military ships Austal Philippines can assemble are a larger variant of the Cape class patrol vessels used by the Royal Australian Navy and Australian Border Force.
It is also advantageous for the Navy to buy its OPVs from the local maker of Austal boats, as it has service facilities in the Philippines. This will apparently make it easier for security forces to maintain the vessels with their assemblers based here.
Austal Philippines began operating its Cebu shipyard in 2012. Since then, it was able to deliver 17 ships to 10 operators in nine countries and territories across the world, including the United Kingdom, French Polynesia, United Arab Emirates, South Korea, Spain and Norway.
The shipyard started with only 30 employees, but now has a labor force of close to 1,000 workers, of whom 98 percent are Filipinos, from engineers to designers to skilled laborers.