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Australia Denies Claims of Failed $1 Billion Army Agreement with Germany

The Australian government has denied that negotiations with Germany over the supply of Australian-made armed vehicles have broken down.

In July, Australian Prime Minister Anthony Albanese announced during his trip to Berlin that Germany would purchase over 100 new Boxer Heavy Weapon Carriers, an eight-by-eight-wheeled, all-terrain Combat Reconnaissance Vehicle, from Australia.

The federal government said the deal was worth over $1 billion (US$665 million) and would support over 1,000 jobs.

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Germany's New Armed Vehicles to Be Made in Australia

The armed vehicles were expected to be made by German contractor Rheinmetall at one of its facilities in Queensland, with delivery starting from 2025.

At the time, the prime minister touted the deal to boost Australia’s defence capacity and economy.

However, reports have recently emerged that Germany has suspended the negotiations just weeks after Australia awarded a multi-billion dollar contract to a South Korean defence contractor.
In late July, Korean conglomerate Hanwha won a bid to supply the Australian army with 129 Redback Infantry Fighting Vehicles (IFV) over Rheinmetall, which proposed to assemble its Lynx IFV in Queensland.

In making the decision, Defence Industry Minister Pat Conroy said Hanwha’s Redback IFV provided the Australian army with “capability” and “value for money.”

Australian Government Rejects Speculations About Broken Deal

In an interview with Sky News, Deputy Prime Minister and Defence Minister Richard Marles said Australia would continue to work with Germany to deliver the armoured vehicles.

“I’m aware of the speculation, but obviously, we’re not going to react to the speculation,” he said.

“The facility in Brisbane is an excellent facility, and the Boxer vehicles which we have purchased for our own army, I’ve had the opportunity of looking at, and they are an excellent vehicle, and we’ll continue down that road.”

The defence minister also noted that the two contracts were not relevant to each other as the Boxer and Redback IFV were different types of vehicles.

Hanwha Defence Australia’s Redback fighting vehicle on display in Canberra, Australia, on March 12, 2021. (AAP Image/Mick Tsikas)
Hanwha Defence Australia’s Redback fighting vehicle on display in Canberra, Australia, on March 12, 2021. (AAP Image/Mick Tsikas)

In addition, Mr. Marles said Hanwha won the contract via a fair process.

“What we do with major defence tenders is to have competition between competing tenderers so we get the best value for money for the Australian public,” he said.

“That necessarily means that for every tender who wins, there is a tenderer who loses. Defence industry companies know this better than anyone; it’s part of the process.”

Victoria Kelly-Clark contributed to this article.

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