Reports emerged on Monday that Japan has made an offer to Australia to jointly build a fleet of new submarines instead of exporting a new fleet to Australia, according to Sky News.
Australia is said to have taken a positive stance on the proposal, with a deal between the two parties likely to be sealed by the end of the year.
Under the proposal, Japan’s defence ministry will assist Australia in developing special steel and other materials for its new submarines, while Tokyo will be in charge of assembly.
Japan was previously touted as the Government’s preferred option to deliver Australia’s new submarine fleet, on the grounds that it would supply it for as little as half of the cost of making it at home.
However, the Government’s stance didn’t sit well with the opposition and industry, which claimed that such a deal would cripple the domestic ship-building industry and associated industries.
Australia’s existing fleet of diesel electric-powered subs is severely out-dated, with most of the submarines built in the 1990s.