Western Australia’s Henderson shipyard will house a multi-billion-dollar defence precinct for naval shipbuilding and servicing of AUKUS nuclear-powered submarines to create an industry the state government claims will rival the state’s massive resources industry.

The Commonwealth today announced it would invest $127 million over the next three years for initial works, including feasibility studies and a detailed design.

Defence Minister Richard Marles and Premier Roger Cook announced the cooperation agreement between the two governments for the shipyard in Perth’s south would create a total of about 10,000 high-skilled jobs.

“This represents the most significant defence industry offering to Western Australia since federation,” Mr Marles said.

The defence precinct will be established at the southern end of the shipyard and will be used to build new landing craft for the Australian army and new general purpose frigates for the Navy.

Submarine maintenance function

After eight years of lobbying by the WA government, the Commonwealth has also agreed maintenance of the country’s future nuclear-powered submarines, as part of the AUKUS defence agreement with the United States and the United Kingdom, will occur at Henderson.

The shipyard will carry out depot-level maintenance on the submarines, meaning more than one dry dock will need to be built and thousands of highly-skilled workers will be needed into the future.

Mr Cook said it was a game changer that constituted a significant new industry for WA that would help diversify the state’s economy.

“This particular industry will rival the resources industry as one of our main areas for economic growth, for economic activity and for employment,” the premier said.

Mr Marles said it was too early to say what the total infrastructure cost of the project will be, but it is expected to be in the tens of billions.

Industry sources say a government-commissioned report from US project management firm Bechtel has presented various options costing between $12 billion and $20 billion.

The feasibility studies and detailed design will determine how many dry docks are necessary and the total cost.

UK, US subs to arrive from 2027

In 2022, former Prime Minister Scott Morrison, who signed the AUKUS agreement, had promised $4.3 billion to build a single dry dock at Henderson to “turbocharge” the naval shipbuilding industry.

The Henderson agreement builds on an announcement in March committing $8 billion to expand the HMAS Stirling Naval base, in nearby Rockingham, which will be home to Australia’s nuclear propelled AUKUS submarines, the US Virginia class, from the early 2030s.

The naval base will host rotations of US and UK submarines from 2027.

Mr Marles today said the Henderson facility would not be ready for depot-level maintenance of submarines by 2027 but said it “aligned” with the requirements under AUKUS.

Australia’s future nuclear submarines will be built in South Australia at the Osborne shipyard, while WA is now confirmed as the maintenance hub, next to the submarines’ base.

But Mr Marles said it was not a competition between South Australia and WA and the workforce of both states was needed to build the new industry.

Job creation

An estimated 3,500 skilled workers will be needed for the HMAS Stirling expansion which includes:

• around 1,000 construction jobs at Henderson
• about 300 jobs for submarine maintenance at Henderson
• 1,200 jobs to build surface vessels, such as frigates, and 
• around 1,100 people to work on building landing craft.

“And what you’ll see created here are jobs that will last into the future, generation after generation,’ Mr Cook said.

Asked where all these skilled workers would come from, the premier said many would be skilled workers from interstate, while others would come through training at South Metro TAFE in Rockingham and elsewhere.

‘Measly’ allocation of funds: Opposition

The Coalition welcomed the decision to build a defence precinct at Henderson, but criticised the initial $127m allocation of funds over three years as lacking any real commitment.

“The Albanese Government is already kicking these important works into the long grass, with ‘delivery of initiatives’ not set to commence for another nine months,” Opposition defence spokesman Andrew Hastie said.

“Labor’s measly $127 million commitment to transforming Henderson is reflective of their lack of investment in the defence Budget which is barely keeping up with inflation under this government.”

But WA Defence Industries Minister Paul Papalia had no doubt as to the significance of the project.

“Western Australia is already the engine room of the nation’s economy, now it’s going to be the powerhouse of our defence industry,” he said.

“This agreement today will result in Western Australia being the home of the biggest naval maintenance hub in the entire Southern Hemisphere.”

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