Navy Contract Worth $630m And 1300 Jobs
Newcastle Herald
Monday August 5, 2002
A WIN by Carrington firm ADI in the Navy's patrol boat contract would generate $630-million and provide as many as 1300 jobs around the Hunter, a study shows.
The study, commissioned by the Hunter Economic Development Corporation (HEDC) and conducted by the Hunter Valley Research Foundation (HVRF), is being used by the State Government to support ADI's tender against two Western Australian competitors.
HEDC chief executive Gillian Summers said yesterday that the `input-output analysis' was an economic model that allowed the HVRF to track the flow-on jobs and spending likely to be generated by the contract for 15 patrol boats.
Although it was based on information provided by unsuccessful tenderer Forgacs, the results and conclusions remained valid.
ADI would be paid about $330million to build 15 ships in five years, and would em-ploy the equivalent of 450 full-time positions each year.
Subcontractors and other flow-on spending would take the financial value to $630million with an annual average of jobs at 1046, peaking at 1300.
The patrol boats are the latest in a series of recent Navy bids from Newcastle.
The Collins class submarines went mainly to Adelaide and the ANZAC frigates mainly to Melbourne, but ADI built its Carrington facility after winning the Huon-class minehunters in 1994.
ADI is working on the sixth and final ship in the contract, and the patrol boats are seen as crucial to the facility's long-term viability.
Its two competitors are Austal and Tenix, both of which plan to build in WA.
Ms Summers said ADI and the HEDC were working on a campaign to promote the benefits of bringing the bid to the Hunter.
`I can't say who they are, but ADI will be announcing advocates for the project ? people in leadership positions in various sectors of the community ? who will push the benefits of a NSW win in this project,' Ms Summers said.
`If ADI wins this project, it will help Newcastle to fulfil its potential as the most important ship-building and engineering centre on the east coast of Australia.'
Newcastle MP Sharon Grierson recently hit out at Coalition plans to `rationalise' Navy shipbuilding, which she said was `an outrageous threat' to the Hunter's maritime industry.
Ms Summers said ADI had been assured that the patrol boat contract would not be influenced by Canberra's plan for the Navy to have a long-term private-sector `partner'.
`The Government has said this is completely separate to the rationalisation plan,' Ms Summers said.
What the patrol boats would do for us
ADI Subcontractors Pay-packet effect 3 Total
Jobs 1 452 323 271 1046
Value 2 $334m $185m $111m $630m
1 Average number of jobs in each year of the five-year construction period
2 Value of contract and flow-ons for the full five years
3 Consumption-induced multiplier effect in retail and service
sectors
Based on HVRF study for HEDC
SHIPSHAPE: ADI is proposing a variant of the Royal Danish Navy's Flyvefisken class patrol boat, pictured above.
© 2002 Newcastle Herald