Japan to Hand Over Data Ahead of Australia Submarine Bid

Maritime Activity Reports, Inc.

May 6, 2015

Japan will agree this month to give Australia classified submarine data, an unprecedented step signalling Tokyo's intent to join competitive bidding to sell Canberra a fleet of stealth subs, said two Japanese officials familiar with the plan.

The "competitive assessment" will see Germany's ThyssenKrupp and France's state-controlled naval contractor DCNS separately competing with a Japanese government-led bid for such contractors as Kawasaki Heavy Industries Ltd and Mitsubishi Heavy Industries Ltd.

Japan had been the front runner in the planned sale of around 12 vessels, for as much as $40 billion, to replace Australia's ageing Collins class submarines, sources have said, until Prime Minister Tony Abbott opened up the bidding under pressure from opposition and ruling party lawmakers.

The prospect of an open bid against other countries, in turn, made Japanese defence officials uneasy in a country where post-war pacifism remains strong.

Competing for arms exports could help opponents of Prime Minister Shinzo Abe paint him as a militarist, as he prepares to present unpopular legislation to parliament later this month that would enhance Japan's defence capabilites.

But the Defense Ministry agreed to Japan's first disclosure of such classified technical data to a foreign military other than that of ally the United States, because Australia needs it to make a decision on the submarine's technical capability, the officials said.

Australia wants Japan involved in the process, because it is interested in Tokyo's 4,000-tonne Soryu class sub and its lithium-ion battery propulsion system. The German and French makers offer 2,000-tonne vessels.

Australian Minister for Defence Kevin Andrews on Wednesday telephoned his Japanese counterpart Gen Nakatani, asking for help with the submarine programme and urging Japan to participate in the bidding, the sources said.

"The National Security Council will approve the release (of the data) in May," one source said.

Japanese Defence Ministry spokesman Hirofumi Takeda declined to provide details on the plan, but said: "The relevant ministries in Tokyo are discussing how we can help Australia."

The sources did not say what technical data would be handed over to Canberra, but noted that the exchange comes ahead of a planned visit to Tokyo by Abbott around July for talks with Abe.

A deal to supply a variant of the Soryu would give Japan its first major overseas deals after Abe eased curbs on arms exports last year that had isolated defence contractors for seven decades.

Abbott, who has described Japan as his country's "closest friend in Asia," is eager to deepen security ties, a strategy mirrored in Tokyo as the two key U.S. allies respond to Washington's desire for them to take a bigger security role in Asia as China's military might grows.

Eager for that deeper cooperation, the U.S. is backing the Japanese built submarine packed with American surveillance, radar and weapons equipment, sources familiar with Washington's thinking have told Reuters.

Australia's assessment will look at capability, cost, schedule and Australian industry involvement, with each bidder getting around $6 million to prepare its proposal. One of the tests will be the ability to use and disclose technical data.

The process will take at least 10 months, after which the defence ministry will make recommendations for the government to consider.

(By Tim Kelly and Nobuhiro Kubo, Additional reporting by Matt Siegel in Sydney)

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