Australia signs strategic shipbuilding agreement with Austal

August 7, 2025, by Fatima Bahtić

Austal has finalized a strategic shipbuilding agreement with the Australian Government, which will appoint a newly created special purpose vehicle and Austal subsidiary, Austal Defence Shipbuilding Australia, as the strategic shipbuilder for Tier 2 surface combatants at Henderson, Western Australia.

Under the SSA, Austal Defence Australia has been selected as the prime contractor for the LAND 8710 landing craft programs, which include the construction of up to 18 landing craft medium (LCM) and 8 landing craft heavy (LCH) vessels.

Specifically, Austal Defence Australia will be ultimately responsible for all aspects of the design and integration, construction, installation, integration, testing, delivery and acceptance of the nominated vessel programs.

These programs were previously announced as pilot shipbuilding projects under the SSA. Austal and the government are currently in discussions to finalize contractual arrangements for both programs, with further details to be announced upon conclusion of those negotiations.

“The government’s approval of the SSA is a defining moment for Austal. It will establish Austal Defence Australia as the Commonwealth of Australia’s strategic shipbuilder for Tier 2 vessels in Western Australia and reflects both Austal’s excellent defence shipbuilding record and the capabilities that Austal possesses to help the Australian Government to achieve its defence objectives,” Austal CEO Paddy Gregg said.

The SSA will establish a management framework and common terms through which Austal Defence Australia will deliver Australia’s surface shipbuilding programs in Western Australia under shipbuilding contracts.

The design and construction of the LCM is intended to be the first program to be awarded and delivered under the SSA.

The government and Austal expect contracts for the LCM program to be finalized in Q1 FY2026 and that these will provide for the construction of 18 LCMs for the Australian Army over eight years for a price of A$1-1.3 billion.

The final vessel is expected to be scheduled for delivery in 2032.