The two short-listed tenderers, US-based Raytheon and European-based STN Atlas, have been informed of this decision today.

Recent developments in the relationship between Australia and the US on submarine issues together with the accumulated experience and emerging understanding of the operational potential of the Collins Class submarines has made this decision most appropriate in our strategic circumstances.

The Australian and US Navies are entering into a Statement of Principles arrangement to achieve a shared goal of maximum cooperation and synergy on submarine matters.

As I said in my recent address to the ANZUS Conference, these arrangements will give Australia even better access to US military technology which gives us a vital edge in capability and operations. One of these vital and sensitive areas is in submarine technology. US Navy assistance with hull, mechanical and propeller technology has been critical in improving acoustic performance and overcoming significant shortcomings in the Collins Class.

Increased cooperation and interoperability on submarine matters with the US, together with the increasing national security cooperation opportunities this provides, is of overarching strategic importance to Australia.

This will enhance tactical growth and long term interoperability of the Australian submarine force in cooperation with the US.

The selection process for the heavy weight torpedo has also been terminated. A new arrangement will be developed by the Australian and US Navies under a cooperation agreement.

The benefits of this decision include greater access to US Navy tactical information, resupply in time of need and the provision of torpedo firing exercises with US submarines.

The Government is committed to achieving the best possible long term military capability for Australia’s six submarines.