Australia Signs Contract with BAE for Warship Modernization

by: Matthew Potter
November 29, 2011

Category: Business Line | RSS 2.0

Post World War II most navies end up keeping their ships for decades. This means that every several years they need to be modernized and upgraded with new equipment and systems as technology develops. This is often the most efficient way of introducing new capabilities rather then going through the process of designing and fabricating a whole new vessel. Often hull and engines had many more years of useful life allowing these systematic upgrades to occur over several decades.

Australia has over the last several years invested and plans to invest in much new and improved equipment for its armed forces. Part of this is to help spur their economy while another is to improve their overall capability. This includes plans for new armored vehicles, ships and aircraft. At the same time they continue to keep their existing assets and add to their capabilities when appropriate.

As part of this the Australian government has just issued a contract to BAE Systems (BAE:LSE) Australian subsidiary to upgrade the 7 ANZAC or Perth class frigates operated by their Navy. New Zealand also operates two of the same class ships. The contract is worth about $262 million.

The Perth are based on a the European design MEKO 200 frigate class used by Turkey, Portugal and Greece and originally manufactured by German builder Blohm + Voss. The Australian ships were delivered in the 90’s and were built in Australia.

The new contract calls for installation of new radars and combat information system. It will cause the removal of the existing masts and their replacements with new ones. The ship will continue to be armed with its existing guns and missiles which are based on American weapons. The work will be done in Australia and is expected to take about 6 years.

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