Home » Budget Industry » Reports: Australia Picks BAE Systems Design for $26B Warship Deal

Reports: Australia Picks BAE Systems Design for $26B Warship Deal

BAE Type 26 Frigate, BAE photo

BAE Systems won a $26 billion contest to design and build nine frigates for the Royal Australian Navy, according to Thursday media reports.

Prime Minister Malcolm Turnbull is expected to formally announce the award Friday, The Wall Street Journal and other media outlets reported. The BAE Type 26 frigates, to be named Hunter-class, will be built in Australia by the state-owned ASC Shipbuilding at its Osborne Naval Shipyard. The Wall Street Journal reported the yard will become a BAE subsidiary during the length of the contract.

ASC, which operates three shipyards in Australia, builds the Hobart-class air warfare destroyer for the Royal Australian Navy, and built and maintains Australian’s fleet of six Collins-class submarines, according to the company.

BAE, maker of the 7,000-ton Type 26 design, had been competing against Italian-based Fincantieri and Spain-based Navantia for the contract. While the Fincantieri and Navantia designs are both being considered for the future U.S. Navy frigate competition, the BAE Type 26 and Type 31 were not eligible for the U.S. frigate, contest because the rules required designs submitted to already in service, not a concept or in production.

Last year, BAE started building the first batch of what will ultimately be a fleet of eight Type 26 frigates for the U.K. Royal Navy. The design is also under consideration by the Royal Candian Navy for its future frigate.

“The ships specialize in anti-submarine warfare, protecting the U.K.’s overseas territories and interests across the globe. The flexible design will allow the capabilities to be adapted throughout its lifespan to counter future threats,” the Royal Navy said in a statement when the contract was announced.

  • Ed L

    Beautiful vessel

    • Grey Forest

      The photo shown is of the UK variant it what be good considering the article if they had shown an image of the Aus version with the CEFAR radar it changes the appearance a fair bit, still good looking but not as tall and a bit stumpier looking.

      • Hugh

        Some items where RAN ships will differ from the RN: Aegis/CEA/Saab radars, and probably ESSM rather than Sea Ceptor. (Saab will be widespread across RAN platforms.) Interestingly the RAN will be introduced to RR GTs (after decades with GE), and the MEOs will need to upskill with electrical kit. (Are 5″ rounds standard between the USN and RN?)

        (Incidentally the RAN uses USN DC markings on some ships and RN ones on others.)

        Currently the RAN is getting 2 replenishment ships built in Spain, and the last 2 of 3 Spanish designed Air Warfare Destroyers built in Australia, with the Australian construction of 12 German designed Offshore Patrol Vessels commencing soon, 12 French designed submarines to be constructed in Australia, and now 9 UK designed frigates also to be built in Australia.

        • RDF

          Thank God aussiesxare building ships again. Good on ya.

          • Matthew

            Cheers mate and we are finally doing it the way every one has been telling our government to do it for decades. With our build schedules we will now be building our naval ships indefinitely because by the time we finish these will be time to replace the Hobarts.

    • DaSaint

      I’ve always felt this was the best frigate design. BAEs work on modernizing Aegis cruisers and destroyers here will help them to integrate Aegis on this platform.

      I’m hoping the USN reconsiders and allows the Type 26 when it’s time to make a decision on the FFG(X). And they can spin it any way they want and still select this class as it’s their right to do so.

      • Corporatski Kittenbot 2.0

        It made the long list, but didn’t make the short list.

        The Navy consider the better sub-hunter to be noisy short-ranged jet boats.

        • DaSaint

          I remember.

          Just dreaming…the RFP stated the Navy had the right to select from beyond the 5 on the shortlist…

          • Corporatski Kittenbot 2.0

            Fair enough…. but you’d have to think the odds of that are lottery-win small.

  • TheFightingIrish

    Is the cost in Austrailian or US currency? If US currency, that is nearly $3 billion a ship. If the cost is in Austrailian currency, that works out to be just over $2 billion a ship, which seems more reasonable.

    And, what is the price break if the Navy got in on the deal and bought a couple of dozen ships?

    • totallyaverage

      Keep in mind that the cost almost certainly includes upgrades to the yards and other facilities, plus development.

      • TheFightingIrish

        Understood, but it would be nice to know the cost to build the ships themselves for comparison. The first Ford carrier came with about $12 billion in development costs. Obviously, not the case here, but how much bang for the buck are they getting.

        • Corporatski Kittenbot 2.0

          The best number I can find is that the RN version is costing a little north of £850m

          • Sons of Liberty

            It’s a little over $1.6B US.

    • Grey Forest

      Australia usually (not always) includes whole of life costs of defence purchases for example the recent purchase of Triton UAV’s was just over 6 bilion Aus dollars for 6 aircraft or 1 billion a piece, but when it was broken down it included infrastructure upgrades to 2 bases training and certifying costs and life cycle costs. It makes it rather difficult to know exactly what the single item costs are.

      • USNVO

        The same is true in more or less detail for most countries. For instance, in USN programs, items included were training aids (which could include facilities but not always), training development, and factory training until training is brought in house, travel costs for precomm units, housing precomm units, developmental costs of some but not all systems, program office costs, initial outfitting of spares, and a litany of other costs more or less related to the actual cost of the ship. For mature systems, much of these costs have already been transferred to the service but for new systems “everything else” can easily exceeded the cost of the ship or aircraft.

        • DaSaint

          Australia and Canada include whole life costs, not just procurement. US acquisition doesn’t do that.

          • USNVO

            It does, but most of the time no one looks at those estimates since they tend to delve into a bunch of assumptions that may or may not be accurate. For instance, even at $13B, the FORD has an estimated $5B lower lifetime cost (a little over $50B total versus over $55B) savings as well as 20pct more operating days than the GHW BUSH, but $13B is easier to hype.

    • DaSaint

      Other publications have stated that per vessel cost without GFE is expected to be $850 million to $1 billion per ship.

      • USNVO

        Who cares, no one buys a ship excluding GFE. What? You don’t need radars, sonars, combat systems, vertical launchers, or weapons amongst many other things. The per vessel cost of a DDG is something like $700million when you exclude GFE.

  • Grey Forest

    I have to wonder if the UK Aus Canada and NZ end up buying these vessels with an approximate fleet size of 35 vessels of probably the most advanced ASW frigate available. Did the US make a mistake to exclude design especially considering that it closest allies are adopting it.

    • Corporatski Kittenbot 2.0

      A huge mistake.

    • DaSaint

      Since Australia has selected it, then NZ will also select it. Combat system may be different, however.

      • Grey Forest

        It may be too expensive for New Zealand especially because they have been considering replacing their two ANZAC frigates with 3 vessels as they believe it necessary in order to keep 1 at sea at all times. As for the CMS if they where to go with Type 26 they may go with a combination from the other variants with Canadian CMS and UK missiles as per the latest frigate upgrade and Aus radar as it is the best available. But I think the while it is possible they are more likely to go with the Type 31e if the Arrowhead 140 is chosen.

        • DaSaint

          That’s a very good point. I could see 3 Arrowhead 140s or similar, with CMS 330 as the core. Makes sense, but I know they previously liked the commonality of hulls with the RAN, and are now considering the P-8 for the same reason for the MPA requirement.

          • Grey Forest

            Well the frigate that they possessed before the Aus/NZ ANZAC was the UK export oriented Leander so it could be seen as just a return to business as usual, and it would give them a hull in common with the Brits another major ally instead.

          • DaSaint

            Yes, everyone had a Leander variant. That was the last major UK export frigate design in significant numbers, as opposed to donating older vessels as with the Type 21s and 42s. I could see a return to another small UK frigate, like the Arrowhead.

          • Murray

            The RNZN currently a has a requirement for an ice strengthened Ocean Patrol Vessel so a purchase of three Type 31e ships could be a distinct possibility. The first could fill the OPV requirement with the other two replacing Te Kaha and Te Mana in due course. The former frigate is currently undergoing a major upgrade in Canada while the latter is involved in the RIMPAC exercise.

    • Sons of Liberty

      To expensive for NZ the Tyoe 31 would be the more likely choice.

      as for Canada who knows what they will do if anything. I wouldn’t be sulrised if the cheap out and select the Type 31 too. Eventhough t26 is best for them and their primary mission.

      Also given the absolute mess Canada procurement is in the Type 26 maybe reaching retirement age before they make a selection.

      • Grey Forest

        I agree that it is probably to expensive for NZ, just stating that it is an option especially if Canada does choose it as then most of NZ’s major allies would possess it and the inter interoperability card comes into play as it has for the P8 which was the most expensive of the options available.
        As for the type 31 for Canada I think that is highly unlikely as BAE is not offering their Leander class type 31 based of the expanded River/Khareef class and it would not be capable of fulfilling the high end AAW role that they need and Arrowhead 140 is unlikely to be offered as the Iver huitfeldt base type is already being offered by Odense so they are unlikely to allow Babcock to enter it.

  • UKExpat

    I think a lot of people do not fully understand what the Type 26 is all about. Many will have heard/seen that it is a smart/handsome ship, that it seems very quiet, that it seems very very expensive, way over $1 Billion US Dollars per ship and that it may be currently the world’s best ASW (Anti Submarine Warfare) escort. It is actually all these things and more.

    In order to fully appreciate the Type 26 you need to think of it as doing the same for ASW ultra “Quietness” as the F117/F35 did for ultra “Stealthy” aircraft.

    So looking at the above issues :-

    1) There is no doubt that the Type 26 is a handsome sea worthy ship and the old Engineering maxim that “If it looks good then probably is good” certainly holds true here.

    2) Being ultra quiet is one of it’s main attributes. What BAE/RN have done is to not only design and build an exceptionally quiet hull form but ensured that all the main machinery, pipe runs etc. inside are NOT fixed to the hull the equipment is either isolated from it and/or hung from bulkheads, put on sound deadening springs and the like etc. etc. They have followed the same principles that are incorporated in the RN’s very successful SSBN’s and Astute Class SSN’s which BAE also builds. When you add in the quiet propulsion system which is driven by electric motors with electricity generated by Rolls-Royce MT30 marine gas turbines, as used in the USN’s LCS mono-hulls, you have an exceptionally quiet ship indeed.

    3) Yes the ship is more expensive but this is mostly due to the added “Quietness” costs, not to BAE profiteering as some ingrates in the UK often falsely claim.

    4) Added to the above is the state of the art Sensors including the exceptional towed array passive sonar system, again as used on the Astute Class SSN’s, excellent active sonars, torpedo counter measures, unmanned drogues etc. and the Type 26’s true ASW abilities become apparent.

    A final note should be made of the fact that the Type 26 project does not have same “new technology/design risks” as the USN’s “Concurrency” stressed projects have/had, because if the “Quietness” gains are not up to the standard expected the ships will still be able to carry out their primary mission i.e.. sub hunting, but less efficiently and of course a bit more costly. There will not have to be any total write offs like the Zumwalt’s etc.

    • Corporatski Kittenbot 2.0

      Good post.

      WRT America’s FFG(X) competition I thought the Spanish entrant was the best….. but upon reading further it seems relatively old fashioned and noisy.

      The BAE Type 26 suits America down to the ground.
      Not only for the critical mission of ASW, but that it can also sling TLAMs and have a competent AAW capability

      • UKExpat

        Thank you,
        I understand what your are saying, but I do see problems in trying to put top range ASW and AAW in the same hull. They are two totally different specialist functions, imagine you are under attack from both the air and a submarine. What do you? do you go ASW mode and move slowly and silently OR go AAW mode and move rapidly with lots of noisy manoeuvres? Often trying to be excellent at all trades leaves you master of none. Separate hulls can also greatly simplify the situation.

        As for TLAMS they can be carried by any ship with spare capacity/space like subs, AAWs, ASWs, GP Frigates, etc. etc. it is not a big issue where they get put. To me getting a warship’s main specialist missions I,e, ASW, AAW etc. competed efficiently and correctly is by far the main priority, the rest can often be distracting window dressing if you are not care full. It is all a fine balancing act.

        Also remember the USN has still not recovered from the devastation the “Concurrency” scandal caused to it’s procurement schedules/costs and still needs time to rectify the problem get it’s procurement issues settled. It needs time.

      • Matthew

        Well considering the F-100 was based off of the Perrys its deffintly out dated. Was a bad call Australia getting them (Hobart class). There is literally no growth room, Everything is packed in tight and people working on them noticed more then a few similarities between them and our Adelaide FFG’s (Aussies Perry’s)

  • What’s interesting is that not only will Australia by buying more of these ships than Britain (9 vs 8), it will also be buying a version that is vastly more capable (tri-band AESA and SM-2/ESSM instead of a rotating radar and the short-ranged Sea Ceptor).

    • Sea Ceptor is far from short range.

      • RAM Blk II: 15+ km
        Sea Ceptor: 25+ km
        Sea Sparrow: 25+ km
        ESSM: 50+ km

      • Corporatski Kittenbot 2.0

        Sadly it is.

        A VLS launched ASRAAM with a different seeker.

        Poor range & speed in comparison with ESSM

    • UKExpat

      Sea Ceptor is an AAW (Anti Air Warfare) weapon and very much secondary armament for the Type 26 in the RN, it is just back up for when operating alone. The Type 26’s is a specialist ASW (Anti Submarine Warfare) Escort and when operating with carriers, it’s primary RN mission, it will be fully protected by Type 45 destroyers who are specialist AAW ships. with both Samson & SM1850M 3-D AAW Radars and Astor 15 & 30 hypersonic anti air missiles.

      Any perceived lack of AAW missiles & AAW Radars on the ASW Type26 is quiet irrelevant, as, to the best of my knowledge, enemy submarines do not yet have any wings and cannot fly.

      • Ever heard of submarine-launched antiship missiles?

        However, that’s beside the point. Since WWII, a grand total of 3 ships have been sunk by submarines while the UK alone had 6 ships sunk and 14 more damaged by air and missile attack during the Falklands. And, as Yemen has amply demonstrated, the missile threat is only growing – I knew that if I were in the Red Sea right now I would much rather be on a Hunter-class than a Glasgow-class.

        Further, the idea that the Type 45’s will be able to adequately protect the Type 26’s from air attack is laughable. To successfully intercept even a subsonic AShM, the Type 45 would need to be within 10 miles or so of the Type 26 (no CEC so the Type 45 has to use its own sensors), crippling the fleet’s flexibility. Not to mention that there are only 6 Type 45’s, while there are going to be 8 Type 26’s (although given the UK procurement track record there may be fewer) – not to mention the carriers (which have no defensive armament), the Type 31’s, the amphibious ships, the auxiliaries, and whatever civilian traffic needs to be protected.

        Finally, Aster is nowhere close to being hypersonic, as it tops out around Mach 3.5.

        • Alex Andrite

          whoa ! Great factual response. I see that I have more homework to do. Well, after my nap anyway.

          FTG – ’68- ’72
          DD-449, DD-826, ARL-38

          “Peace through Superior Firepower”.

        • Ed L

          What were the estimated expected casualties to Atlantic shipping and warships if the Cold War had gone hot. 1 our of 5? Or worst

    • Patrick Alford

      Another role is possible strategic defence. Perhaps SM-3 will be bought later.

  • Tanner Wade

    So $26 Billion for 9 ships = $2.9 billion per ship??????
    Maybe if all systems, weapons, and total operation & maintenance costs are included.

    • DaSaint

      Yes. Lifetime costs supposedly included.

      • Matthew

        Not all life time costs however what we do factor in often and have done with all of our naval programs lately is inflation. Often overlooked but can make the price seem a lot higher so a good portion of the budget is actually in future dollars not current.

  • Captain Kirk

    AUS and UK get awesome REAL frigates with REAL weapons and proven systems, we get stuck with tied- to-the-pier or dry-dock, do nothing, fragile, no weapons, no systems, noisy, short legged, commercial grade, under development for 17 years LCS. We’re supposed to have the best Navy on the planet. What gives? No wonder the LCS wasn’t invited to RIMPAC, they didn’t want to be embarrassed in front of other Navies “you call that a frigate…?”

  • j James

    I’ll size up all the comments for newcomers to this post.


  • 1) I know you Brits are hypersensitive to any critique of your navy, but reread what I wrote. I never said anything about incompetence in the Falklands or suggested that you were defeated – I pointed out that the air and missile threat is far greater than the submarine threat and used the RN as an example. If it would have made you feel better I could have used the US as an example as since WWII we have had nearly a dozen ships damaged by air attack and none by submarines.

    2) I never said that the Type 45 wasn’t a very capable AAW ship. However, the RN only has 6 of them and they represent virtually the entire fleet’s AAW capability. I challenge you to do the geometry on AShM detection/engagement and see how 6 ships provide effective coverage for more than 20. Of all those weapons you list, only the F-35 contributes anything to air defense and with an airwing of just 24 planes, you’re looking at probably 2 in the air at a time if you want to be able to conduct any offensive operations – with 4 missiles each, that’s not enough to shoot down a standard 8 AShM salvo even if the planes happen to be in the right place for an intercept.

    3) I actually made no mention of the ballistic missile threat. But if you want to bring it up, the RN has no BMD capability and no plans to acquire any. The 2013/2015 testing was merely to see if a Type 45 could track a ballistic missile, not if it could engage one. Aster Block 2 only exists on paper and, even if it is eventually developed, likely wouldn’t enter service until at least the late 2030’s given that the simpler Block 1NT that the French are developing is scheduled to become operational in 2022. Further, the RN currently has no plans to acquire even the Block 1NT.

    4) I admit I was wrong about the top speed of Aster 30, as you say it reaches Mach 4.5. I didn’t realize it was so much faster than the Mach 3 Aster 15. However, I would still point out that that is not hypersonic.

    • UKExpat


      Thank you for your reply and please accept my apologies for my misunderstanding of your post, to be honest I actually thought you were another Brit talking nonsense about the RN’s current policies. I am a realist and do not get sensitive, hyper or otherwise about insults to the RN, after all the RN’s record of achievements speaks for it’s self

      1) The problem I have with your reply is that I cannot agree with your statement that the air and missile threat is far greater than the submarine threat, in many ways I think, given that subs can also deploy AShM’s, makes subs even more dangerous. You quoted the Falklands war, but did it not occur to you to look at the effect of submarines on that war’s outcome? In a way it was pivitable, as at the start of the real shooting war a RN SSN sank the Argentine navy’s cruiser Belgrano, the direct consequence of this was that virtually all the remainining Argentine navy surface ships including their carrier and escorts scuttled back to their bases and stayed there until the war was over. Argentine supplies and reinforcements to the islands by sea were virtually instantly stopped. It was a mini replay of the German actions in WW1 after the Battle of Jutland. They did send out one of their old submarines which the RN promptly disabled and captured. The RN then used it’s subs to successfully blockade the Argentine mainland, for reconissance and for SAS Special opts missions on both the Argentine mainland and the Islands. Now if Argentina had had some competent ASW assets and taken out a RN sub or two we may have had a very different war ending.

      Probably a better analagy is between the Cold War and now. In the CW the Russians had a massive submarine fleet but both the USN & RN Submarines literarily ran rings round them both in international waters and in their own back yard. This was mainly due to our huge technological advantages. Moving on to today and we see not only both Russia and China again emerging as a threat with new submarine fleets but now we also have the arrival of new cheap submarine technology i.e. Non nuclear ultra quiet Air Independant Submarines (AIP) and our previous technological advantage, for whatever reason, almost gone.

      Finally we also need to remember that if the Type 26 ASW Frigate design is to be a significant part of our new ASW efforts they have to be built now as the complexity of their hull/quieting measures will require significantly longer build times. On the other hand converting say a Type 31e Frigate to the Type 45 AAW mission is comparatively easy as simply put install new radar, Aegis/Sea Viper, Missile launcher etc. the hull does not have to be completly taken off and painstakingly slowly rebuilt. Clearly ASW Ships are more important than ever and at present must be the priority build.

      2) I think your maths are a little out here as the RN can only build using the resources available. If you compare our population size and GDP to that of the USA you will see that the USA is roughly 6 times larger on both counts thus our 6 AAW escorts equates 6 x 6 = 36 which very closely compares to the USN’s 35 to 40 Aegis escorts. Suggest you try and get other NATO members to build some or else get them to pay us (USN and/or RN) and we will do it for them.

      Again sorry but the maths on the new UK carriers is also out but there is probably some good news here, and I apologise in advance for boasting, but the true concept of these carriers has definatley never been fully understood by the media and/or the general public, it will only become apparent when they start operating F35s from them. Whilst it is a long story the general facts are they should defiantly not to confused and/or compared with the USMC “Gator Navy” ships as they are more in line with the Nimitz/Ford Classes. It may sound a bit over the top but the keys to understanding this are :-
      a) The flight deck area which at 4 acres is the largest of all carrier classes except the Nimitz/Ford Class’s 4.5 acre flight decks.
      b) The runway which is the world’s longest carrier runway.
      c) SRVL (NOT STOVL!) The aircraft takeoff along the runway/ski jump but return with an over the stern coventional like landing using the F35’s own brakes to stop.
      d) The design and manufacture of a specialist landing light aid called a “Bedford Array” ( First being installed on the UK’s 2nd carrier HMS POW) to facilitate SRVL

      The combination of the above is expected/hoped to drive the sortie rates of each carrier to over 50% of that of a Nimitz/Ford Class carrier when operating with it’s designed for 40 No F35Bs. Also, as conventional carriers, their available sea time between dockside maintenances, refits, etc. is extended and effectively lets the two carriers to operate together for 50% of their lifespan thus giving any combined RN 2 carrier task force a sortie rate on a par with a single Nimitz/Ford Class carrier. If this planned for scenario pans out as expected the RN QE Class will have come close to effectively making all the world’s other non-Nimitz/Ford Class carriers obsolete.

      No doubt you may be sceptical about the above but you have to understand that the QE Carrier / F35B Project is a long term almost unique project, in that it involves both the two carriers and their F35Bs being specifically designed, almost from day one, for each other as a single package. This happened due to the fact that the UK is the only class one partner on the F35 project with the US and Rolls Royce being the developer and manufacturer of the planes vertical lift fan/nozel system, with at least 15% of the all F35s components designed and manufactured in the UK. With it’s current projected order of 138 aircraft and the effort the UK has put into these carriers the 40 aircraft per ship will be aquired.

      3) I mentioned the BMD issue to show that the UK is serious about AAW and I can assure you that it will aquire the Astor Block 2, either sooner or later, probably sooner given the number of developement contracts the UK MOD has issued on this project. If there is some sort of major crisis it will be one of the usual high tech items that usually appear to come out of nowhere eg like helicopter/AWACS systems which suddenly appeared later in the Falklands war.

      4) I only mentioned the Astor 30 speed out of interest as the Astor 30 is in fact almost identical to the Astor 15. The only difference being a simple attached 1st stage booster rocket to give it’s significant extra speed/range. The Mach 7 version is under developement but I don’t know what the progress is. Again it could end up being another one of the high tech items that the RN/UK always tends to pull out the bag in times of crisis.

      • No problem – I’m glad I toned down my response before posting it.

        I fully agree with you that submarines are an incredibly dangerous threat and ships have to be designed to combat them. My point is that submarines are rather rare while aircraft and missiles are extremely common. Thus, building a frontline warship with nothing but a point defense system seems extremely shortsighted – especially now that Australia has demonstrated that the Type 26 hull is large enough to accomodate a rather capable AAW system for little additional cost.

        While the UK has long been one of the few European nations to pull its weight, I’m afraid the US/UK comparison is not as good as you think. The US has 5 times the population (326m vs 66m) and 7 times the GDP ($18.5t vs $2.6t) so your 6 times figure is a decent approximation. However, the RN has 19 single purpose destroyer/frigates while the US has 88 significantly larger multipurpose cruiser/destroyers as well as 12 LCS and 11 frigate-sized Coast Guard cutters. That’s still a 6:1 ratio in hulls, but an 8:1 ratio in tonnage (918k vs 113k), a 14:1 ratio in area AAW systems (87 vs 6), and a 19:1 ratio in heavy missiles (8572 vs 440).

        The carriers are very nice and I agree that they are a cut above anything but a Nimitz/Ford (although we will have to see what China is planning). Unfortunately, the entire program has been a never ending saga of settling for less (ski jumps instead of catapults, no defensive systems, etc) so I find it difficult to share your optimism that all 138 F-35B’s will be procured.

  • Chesapeakeguy

    Good looking ship!