March 26, 2018

Naval Group Excessive Market Power Implications of any Merger with Fincantieri.

Asia Times, March 23, 2018 provides background:

“Australia’s Future Frigate Program, or SEA 5000 Project [is down to three contenders Italy's Fincantieri FREMM, UK's BAE Systems and Spain's Navantia]

The winner of the [A$35 Billion] frigate tender should be revealed in June [2018]. Construction of the new naval vessels is expected to begin in 2020, and the first warship should enter service in late 2020s.”
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Now, significantly, Australia’s DEFENCECONNECT reports March 23, 2018 ”...the international defence community awaits further developments on the potential merger between Italy’s Fincantieri and France’s Naval Group[was DCNS]...

Pete COMMENT and QUESTION

It is possible the Australian Government on April 18, 2016 did not shortlist the Naval Group/DCNS version of the FREMM Frigate because the Government already knew it was about to choose Naval Group/DCNS on April 26, 2016 to build the 12 Future Submarines. 

In 2016 choosing Naval Group/DCNS as winner of the A$35 Billion  Future Frigate Program AND the A$50 Billion Future Submarine Program would have clearly and publically given Naval Group/DCNS excessive market power over the Australian Government, Australian shipbuilding partners, shipbuilding unions and dependent Adelaide economy. 

This is because the Frigate and Submarine projects are in the same shipyard precinct drawing from the same local workforce in Adelaide South Australia. Adelaide is a small-middle sized city with a weak economy which heavily depends on Australia's A$90 Billion naval shipyard projects.  

Now, as Fincantieri is a contender in the Future Frigate competition I wonder if a Fincantieri alliance with Naval Group may stir up Australian Government concerns that:

Naval Group as the sole winner of the Future Submarine Competition, may still acquire excessive market power if


a Fincantieri /Naval Group alliance wins the Future Frigate competition in June 2018?

1 comment:

Peter Coates said...

Hi KQN

I've transferred your [ex Russian spy] Mr. Skripal comment to the "Two Russian intelligence officers expelled from Australia" article at http://gentleseas.blogspot.com.au/2018/03/two-russian-intelligence-officials-to.html

Regards

Pete