Ship management company

Australian shipbuilder hopes to strike deal with DND as OPV project looms – Manila Bulletin

Austal, an Australian shipbuilding company and defense contractor, remains keen to work with the Department of National Defense (DND) Offshore Patrol Vessel (OPV) Procurement Program for the Philippine Navy (PN) .

Dave Shiner, Regional Manager of Austal Asia. (Photo by MARTIN SADONGDONG/MANILA BULLETIN)

Dave Shiner, Austal’s regional manager for Asia, said their lines of communication remain open to DND after the latter decided to find other suppliers for the OPV project due to pricing concerns.

“Austal remains engaged and in open dialogue with the Department of National Defense and the Philippine Navy regarding the provision of Offshore Patrol Vessels and we would like to support them in any way possible up to the point where the contract is awarded elsewhere,” Shiner said.

DND hopes to strike a 30 billion peso deal with Austal for the supply of six OPVs to PN. OPVs are highly versatile vessels designed to perform maritime security and disaster relief operations.

However, DND Secretary Delfin Lorenzana confirmed earlier this month that he had withheld signing the contract when Austal requested an additional 12 billion pesos due to the rising cost of producing the ships, including including materials, labor and others.

When DND could not provide the additional funding, Austal suggested that the number of OPVs be reduced from six to five units – a condition with which Lorenzana disagreed.

Sinan Topuz, business development manager of Asfst Asia Pacific. (Photo by MARTIN SADONGDONG/MANILA BULLETIN)

One of the main companies to replace Austal is Asfat, a Turkish state-owned defense contractor.

“This project will be a stepping stone for Asfat to strengthen cooperation with the Air Force and the Army,” said Sinan Topuz, business development manager for Asfat Asia Pacific.

Lorenzana said he would approve the OPV project with the new DND secretary and let the leadership decide when a new administration arrives in June.

“Our people are still negotiating with some companies for the purchase of the OPVs… Six ‘yan at kung maayos natin ‘yung mga papeles (we are planning to buy six units and if we get the paperwork done) I might approve that as well to the next Secretary of Defense,” Lorenzana said.

“NASA TWG [Technical Working Group] naman ‘yun eh. Baccalaureat [Bids and Awards Committee] and the TWG is working on it kung ano mas pabor sa atin (It’s up to the TWG. BAC and the TWG are working on it to figure out what’s best for us),” he added.

Ministry of National Defense (DND) Secretary Delfin Lorenzana speaks to the media during the opening ceremony of the fourth Asian Defense, Security and Crisis Management (ADAS) Exhibition and Conference at the World Pasay Trade Center on April 27, 2022. (MANILA BULLETIN)

Meanwhile, the defense chief believes bilateral defense relations between the Philippines and Australia have not been strained due to the cancellation of the deal with Austal.

“Hindi naman siguro dahil tayo naman, Hindi tayo nagbago ng ating [conditions]. We would have chased them (Austal) (I think [the relationship] will not be affected because we have not changed our [conditions]. We would have sued them),” Lorenzana said.

Besides the initial affordability, Austal already owns a shipbuilding plant in Balamban, Cebu in 2012. One of the benefits of DND’s deal with Austal would have been additional jobs for local workers in the area.

“Austal remains committed. We have a shipyard in Cebu which we established almost 10 years ago. We have invested millions of dollars in building capacity there, and our factory in the Philippines designs, builds and delivers boats that this region has never seen before,” Shiner said.

Apart from the OPV, Austal is also in talks with the Philippine Navy for the supply of a hospital ship. He is also discussing a possible agreement with the Philippine Coast Guard for a hospital ship and a humanitarian aid and disaster relief (HADR) vessel; and the Philippine National Police (PNP) for maritime patrol boats.