KEY POINTS:
CANBERRA - Australia yesterday announced an $11 billion contract to build three new guided missile destroyers and two huge amphibious transports that will add massive striking power to its defence force.
The destroyers will have highly advanced air warfare systems with the potential to become part of the ballistic missile defence shield under development by the United States.
The 27,000-tonne ships - three times the size of the New Zealand Navy's new transport, HMNZS Canterbury - will also give the Australian Navy a capability to project power that it has not held for 25 years.
In 1982 the Labor Government scrapped the Navy's sole aircraft carrier, HMAS Melbourne, which carried helicopters and Skyhawk fighter bombers later bought by New Zealand for the RNZAF's now-defunct combat wing.
Although the two new ships will not have fixed-wing aircraft, they will be able to carry 16 helicopters - including Tiger attack helicopters - as well as M1 Abrams tanks, artillery and up to 1000 troops each.
The new ships will join a fleet that at present includes five FFG guided missile frigates, eight Anzac frigates, six submarines, three large amphibious transports, and six heavy landing craft. "The Navy is very excited, very optimistic, about both of these decisions," Navy Chief Vice Admiral Russ Shalders said.
"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 it was the right decision."
The decision, announced in an election year by a government that continues to trail in the polls, will also mean hundreds of millions of dollars for the South Australian and Victorian economies, and the creation of about 2000 jobs.
A further 1500 jobs are expected to flow indirectly from the contract.
The destroyers will enter service between 2014 and 2017, and the amphibious ships between 2012 and 2014.
Both classes of ship are of Spanish design - despite the Navy's preference for American destroyers - and will be assembled in Adelaide and Melbourne.
The three Navantia F100 destroyers, to be built at a cost of about A$8 billion, were chosen over the larger American Arleigh Burke class, which the Navy favoured.
But in contrast to the US design, which has yet to be built, the Spanish destroyer is already in service and available to the Australians.
It will be equipped with the American Aegis combat system, 48 vertical launch missile cells, and Harpoon anti-ship missiles.
Its weaponry may include Standard SM-3 missiles that with the Aegis system could enable the ships to be integrated into the US ballistic missile shield now under development, and in which Australia has been a research partner since 2004.
Although a final decision to join the system when it becomes operational has yet to be taken, Defence Minister Brendan Nelson said in Tokyo this month that options for Australia included equipping the new warships with SM-3 interceptor missiles.
A key driver for Australian participation is the development of long-range ballistic missiles by North Korea. Nelson said yesterday that the new destroyers, which would be a quantum leap in capability for the Australian Navy, would be able to work closely with American ships in a wide range of roles.
These would include escort and air defence to diplomatic missions.
The Spanish F100s have worked with the US Navy as the first foreign Aegis-equipped ships to be fully integrated into an American carrier strike group.
The two new amphibious landing ships will be mainly built overseas, although about 25 per cent of the work will be carried out in Australia by Tenix Defence in Melbourne - the lead contractor for the seven ships of New Zealand's Project Protector programme - and ASC in Adelaide.
As well as troops and combat equipment, the ships will be used for disaster relief, evacuations and other regional emergencies.
"They will greatly enhance Australia's ability to send forces in strength when required, particularly in our region but not, of course, restricted to our region," Prime Minister John Howard said.
Big Spender
* Navy to buy three Spanish Navantia F100 air warfare destroyers at total cost of up to A$8 billion ($8.9 billion), and two transports costing A$3 billion.
* Warships to be named Hobart, Brisbane and Sydney will enter service in 2014, 2016 and 2017.
* Ships to be assembled in Adelaide by an alliance of Navantia, ASC (formerly the Australian Submarine Corporation), Defence Materiel Organisation and Raytheon.
* Ships to be built in Australia and overseas with Australian industry providing about 55 per cent of ship content.
* F100 displaces 6250 tonnes, has range of 5000 nautical miles and carries crew of 180.
* Each will be equipped with US Aegis combat system, 48 vertical launch missile cells, deck gun and Harpoon missiles.
* Ship may be equipped with Standard SM-3 missiles to provide ballistic missile defence.
* Four F100s are in service with Spanish navy.
