BAE wins huge frigate contract: reports

Australia is awarding Britains BAE Systems a $26 billion contract to build a new generation of frigates, reports said Thursday, as the country undertakes an ambitious naval programme in part to counter China.

Prime Minister Malcolm Turnbull is expected to announce on Friday that a variation of BAE's new Type 26 frigate has beaten off competition from Italian company Fincantieri and Spain's Navantia SA.

In a statement to the Wall Street Journal, Turnbull said: "BAE's Global Combat Ship will provide our nation with one of the most advanced anti-submarine warships in the world, a maritime combat capability that will underpin our security for decades to come."

The government has said the nine frigates will be built in Adelaide under the control of the state-owned company ASC Shipbuilding.

According to the Sydney Morning Herald, Turnbull said that for the duration of the frigate construction programme, ASC Shipbuilding will become "a subsidiary of BAE Systems".

The frigates are due to enter service in the late 2020s as the backbone of the Australian Navy's surface fleet, part of a massive shipbuilding programme that also includes 12 new submarines and 12 offshore patrol vessels.

The big increase in spending comes as Beijing flexes its own muscles in the region through a military build-up in the contested South China Sea, and as countries keep a wary eye on nuclear-armed North Korea.

There was no immediate comment from the companies involved in the Aus$35 billion (US$26 billion) frigate bid, or from the British government.

Winning the contract will be a filip to London as it withdraws from the European Union and tries to bolster its defence ties with Canberra.

French naval contractor DCNS has been selected to design and build Australia's new submarines at a cost of Aus$50 billion in Adelaide, beating off competition from Japan and Germany.