KEY POINTS:
CANBERRA - Australia is to buy three Spanish designed warships and two large Spanish landing ships, Prime Minister John Howard announced today.
Mr Howard said the navy would be equipped with three Navantia F100 air warfare destroyers worth a total of A$8 billion ($9.02 billion).
To be Australia's most advanced and expensive warships, they will enter service from 2013.
And in another win for Spain, the Australian navy will be equipped with two 27,000 tonne Navantia landing ships at a cost of about A$3 billion.
Mr Howard said the purchases would add significantly to Australia's military capability.
In the case of the Navantia-designed amphibious landing ships, they would also help with disaster relief efforts.
"They will greatly enhance Australia's ability to send forces in strength when required, particularly in our own region but not, of course, restricted to our own region," he told reporters.
"(It) will, of course, include a capacity to send forces and men and women and materials in relation to disaster relief efforts.
"They will be able to land over 1,000 personnel along with their vehicles - the new M1 Abrams tanks, artillery and supplies, and using integrated helicopters and water craft."
Mr Howard said about a quarter of the construction work on the landing ships would take place in Australia, generating about 600 jobs.
"The superstructure will be constructed and the majority of the fitout will be completed in Melbourne with an estimated value of about A$500 million," Mr Howard said.
"The majority of the combat system design and integration work will take place in Adelaide and the value of that work will be up to about A$100 million."
Mr Howard said the Navantia destroyers had been selected as the "next generation air warfare destroyer" for the Royal Australian Navy.
The three Spanish-designed ships would be delivered in 2014, 2016, and 2017, he said.
"This does represent a massive lift in the Royal Australian Navy air warfare capability," Mr Howard said.
"These vessels will be able to perform the full spectrum of joint maritime operations."
He said the vessels would be equipped with the most capable air combat system in the world.
The destroyers will be assembled in Adelaide by an alliance between navy shipbuilder ASC, the Defence Materiel Organisation and mission systems company Raytheon, he said.
Australian industry will provide around 55 per cent of content and about 3000 Australians across the country will be employed.
It's believed the Australian navy favoured a larger, US-designed destroyer which could be more readily updated with changing technology, has a longer range, and carries more missiles and an extra helicopter.
But the Spanish design is cheaper and is already in service, meaning it can be delivered two years earlier than the US designed warship.
Chief of the Navy Vice Admiral Russ Shalders said he "absolutely" supported the government's decision to purchase the Spanish warships instead of the US-designed vessels.
"The navy is very excited, very optimistic about both of these decisions," Vice Admiral Shalders told reporters.
"This will change the face of the navy for the next 30-plus years.
"In 2050 we'll be looking back at the decisions and in 2050 I'm very confident that we'll look back and say that was the right decision."
Defence Minister Brendan Nelson said the purchase was a vital project for Australia's defence capability and economic security.
"These amphibious ships, escorted by the three air warfare destroyers in our region, will ensure that we are able to undertake security stabilisation, maritime border protection, peacekeeping and humanitarian and disaster relief priorities," he said.
"We also need to recognise that this government has placed defence and security of its nation ahead of all other priorities."
Dr Nelson said the government undertook a rigorous process before signing off on the contracts and was well aware of what it was getting into.
"We go into these projects today with our eyes wide open," he said.
"No Australian would forget, that when in government, the Labour Party gave us the Collins class submarines with all of the problems that were not anticipated.
"We are very confident in terms of capability schedule and price in terms of what's going to be delivered here."
Dr Nelson said the investment would shape the defence force and navy for the next 40 years.
The ships would be fully interoperable with the US, he said.
"The 48 missile cells on this ship, the Aegis combat system on air warfare destroyer, that and many other things make it fully interoperable with our key ally the United States," he said.
"I can assure you that the Australianisation of the Spanish F100, with larger engines, with sonar buoys and a whole variety of other capabilities will well and truly deliver the capability that the government set for itself in the white paper and in the subsequent updates."
The A$4.5 billion investment in Australia would not only create jobs in South Australia and Victoria, Dr Nelson said.
"It represents a bonanza for Australian contractors, more than 1000 contractors with 3500 new jobs throughout this country ... not only in South Australia and Victoria, but for example NSW, Queensland, southern Tasmania and WA."
- AAP
