Austal signs strategic shipbuilding agreement with Australian Commonwealth

Austal Limited announced the official signing of a Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia, appointing Austal Defence Australia as the strategic shipbuilder for Tier 2 surface combatants at Henderson, Western Australia. This 15-year maximum term agreement underscores Austal's commitment to Australian defence capability, focusing on continuous naval shipbuilding, a sovereign supply chain, and progressive cost reductions.

Initial projects under the SSA include the LAND8710 Landing Craft Medium (18 x LCMs over eight years, expected Q1 FY2026 finalization) and Landing Craft Heavy (8 x LCHs, expected by end of calendar year 2025).

The SSA also features a Target Cost Incentive model, performance-based gainshare/painshare mechanisms, and establishes intellectual property rights, governance, and oversight via a 'Sovereign Share' held by the Commonwealth, aligning with broader Defence programs. Austal Defence Australia will employ a dedicated workforce for these naval programs, while other Austal group companies continue commercial and defence shipbuilding operations globally.