Australia Nears Deal to Buy Japanese Submarines





CANBERRA, Australia–Australia is close to buying up to 10 submarines from Japan for as much as 20 billion Australian
dollars (US$18.7 billion) in a move that would turn the north Asian country into a weapons exporter for the first time
since World War II.

The deal, which senior defense officials said they expect to be signed this year, risks stoking regional tensions
since it positions Tokyo as a major guarantor of Australia’s security at a time when relations between China and some of
its neighbors, including Japan, are strained.

A purchase of Japanese submarines also sits uncomfortably next to the Australian government’s pre-election pledge last
year to build a new fleet at home to help support the nation’s struggling ship builders. On Monday, Australia’s prime
minister, Tony Abbott, said his government wanted to support the manufacturing industry, but not at the expense of
national security.

“The most important thing is to get the best and most capable submarines at a reasonable price to the Australian
taxpayer,” he told reporters. “We should make decisions based on defense requirements, not on the basis of industry
policy.”

Australia sees a submarine fleet as necessary to protect the country’s vast maritime borders, as well as to defend sea
lanes vital for its raw-materials exports, and to patrol some of the world’s largest offshore oil-and-gas projects.

Canberra has for some time expressed a strong interest in buying Japan’s Soryu-Class stealth submarines to replace its
own aging Collins-Class fleet of six boats, which face rising maintenance costs as they approach the end of their
working lives.

The 4,200-ton Soryu, or Blue Dragon, is the world’s largest diesel-electric submarine, jointly built by Mitsubishi
Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd. The boats are driven by an ultraquiet air-independent
propulsion system that lets it operate underwater for almost two weeks at a time.

The Australian-built Collins are among the world’s biggest diesel-electric submarines and have longer range, but have
been plagued over their 18-year lifespan by issues around noise and reliability.

A decision to buy the Japanese submarines this year would be sooner than defense analysts had expected, given the
government is due to publish a major defense-strategy blueprint early next year.

While competing French and German submarines hadn’t yet been completely ruled out, several senior defense figures told
The Wall Street Journal that a decision on the Japanese vessels gained momentum following Japanese Prime Minister Shinzo
Abe’s July visit to Canberra, aimed at strengthening military ties amid China’s regional muscle-flexing.

“The exact details haven’t been finalized,” one of the officials said. “But it’s very close–before the end of this
year. The Japanese are strong favorites.”

The Soryu submarines can travel for up to 11,000 kilometers before having to return to base. That is a shorter
distance than the Australian government had originally hoped for, considering Canberra’s wish to safeguard shipping
routes through disputed waters in Asia, where China has recently jousted with Vietnam and the Philippines.

One option Australia has is to shift its submarine port-and-maintenance facilities to the northern Australian city of
Darwin, closer to other countries in Asia, from Perth and Sydney where they are currently situated. Such a base could
also give better support to visiting U.S. nuclear submarines, as Canberra looks to deepen security ties with its closest
ally.

It was unclear whether Australia would buy off-the-shelf boats built solely in Japan. Maintenance and possibly some
fitout work would be carried out in Australia.

“What we need is the right submarine for Australia that works from the start and [is] affordable through life,” a
spokesman for Defense Minister David Johnston said. “We didn’t achieve either of these objectives with Collins.”

Japanese military contractors are taking their first steps toward selling weapons abroad since Mr. Abe relaxed an
export ban, a politically sensitive shift in the country’s postwar pacifist defense policy that has angered neighbors
including China and South Korea.

Tokyo has also been in talks with India about the sale of Japanese US-2 amphibious aircraft, which can be used for
civilian maritime-rescue operations as well as for military purposes. Even under the new policy, Japanese contractors
will be restricted from selling to regimes involved in international conflicts, and to countries that intend to re-
export military hardware.

Write to Rob Taylor at rob.taylor@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


  (END) Dow Jones Newswires
  09-08-140525ET
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Source Article from http://www.nasdaq.com/article/australia-nears-deal-to-buy-japanese-submarines-20140908-00083
Australia Nears Deal to Buy Japanese Submarines
http://www.nasdaq.com/article/australia-nears-deal-to-buy-japanese-submarines-20140908-00083
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