A former defence official accused of handing confidential information to weapons maker Thales Australia is no longer working for the French-owned business, which has just been awarded a lucrative contract to produce artillery shells locally.
Defence Industry Minister Pat Conroy on Wednesday confirmed Thales as the preferred tenderer to build a new domestic facility to produce 155mm ammunition, while unveiling more details for the Guided Weapons and Explosive Ordnance (GWEO) enterprise.
During his National Press Club address, Minister Conroy also revealed $316 million in funding for a new factory in either New South Wales or Victoria capable of producing 4,000 missiles a year in partnership with US Defence giant Lockheed Martin.
The decision to award Thales a munitions deal follows months of controversy surrounding one of its staff members accused of soliciting champagne and handing over secrets to the company between 2016-17 while previously employed by Defence.
In June, Defence referred the allegations of “unethical conduct” uncovered by the Auditor General (ANAO) to the National Anti-Corruption Commission (NACC) — but earlier this month the ABC revealed the case had been referred back to the department.
The ABC can now reveal that last week Thales assured Defence and the Albanese government that the former departmental official was no longer conducting any paid work with the company where he had been employed as an “industrial strategy advisor”.
Mr Conroy played down the significance of the episode when pressed on Wednesday, insisting his department had subsequently found no evidence to substantiate allegations of wrongdoing highlighted by the ANAO.
“An allegation of an incident that occurred in 2017, seven years ago under the last government, defence has thoroughly investigated it, and I’m advised that there’s been no evidence to substantiate the allegation,” he told the National Press Club.
“All allegations like that should be investigated, evidence should be examined, no evidence has been found, and Thales like all the Australian Defence Industry is an essential part of defending the nation.”
In clinching the munitions contract, Thales Australia beat a rival bid from an existing Queensland plant jointly operated by local company NIOA and Germany’s Rheinmetall, which already produces a European version of 155mm shell casings.
Under the government’s newly unveiled plan, Thales will build, establish and commission a new 155mm forge at the Commonwealth-owned Benalla Munitions Facility and produce 15,000 M795 rounds each year by 2028.
“Thales offered the best value for money, speed to capability and lowest risk, and that is what drives our decisions in this area,” Mr Conroy insisted while pointing out NIOA did not currently produce rounds used by Australia and the US.
“The forging that they do is not of the M795 artillery ammunition, they produce rounds for Germany, which is great, but those rounds aren’t used in Australia on any of our platforms.”
NIOA chief executive Ben James expressed disappointment at the government’s decision to overlook its Maryborough factory for 155mm ammunition, but insisted the company would continue to have a positive working relationship with GWEO.
“We know that factory could be rolling off M795 rounds — the rounds that are part of that contract within two years — that would see us producing those rounds by 2026, not by 2028,” he said.