Australian shipbuilding company Austal, backed by mining magnate Andrew “Twiggy” Forrest, has won a $1.28 billion (US$867.6 million) defence contract for the construction of three U.S. Navy ships.
Austal will design and build three Expeditionary Medical Ships (EMS) at the company’s facilities in Mobile, Alabama.
The EMS is a high-speed, cost effective navy vessel with the primary objective of providing hospital-level medical care to sailors during operations.
It will be able to provide a full range of medical services including critical care, triage, operating rooms, radiology, mental health, and primary care.
With its mobility and shallow draft—the distance between the waterline and bottom of a ship’s hull—the EMS is also able to pull into shallower and smaller ports inaccessible to a fleet’s larger vessels.
This will make rapid responsive measures to incurred injuries far more feasible than they currently are.
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Austal CEO Paddy Gregg believes the deal is imperative to the U.S. Navy’s abilities to provide contemporary medical care at sea.
“The new Expeditionary Medical Ship further extends the capabilities of the proven Expeditionary Fast Transport platform, designed and constructed by Austal, to enable more complex medical procedures and operations to be performed onboard, at sea and underway,” Mr. Gregg stated.
“These three new EMS will enhance the U.S. Navy’s capability to provide effective medical and surgical support anywhere in the world, quickly, safely, and efficiently.”
Since its inception in 1999, Austal has fulfilled a number of U.S. military contracts.
The new contract comes as the company nears completion of the U.S. Navy’s Expeditionary Fast Transport Program (T-EPF.)
T-EPF is a shipbuilding initiative to procure a total of 16 high-speed military vessels from Austal especially designed for intra-theater operations—operations conducted exclusively in one geographic combatant command.
Austal has so far delivered 13 of these ships. It will commence work on the new contract for medical ships as soon as it delivers the 16th.
Austal’s continuous ability to land military contracts has increasingly caught the eyes of investors. Since Dec. 21, the day before the contract was announced, the company’s share price has risen 8.7 percent to $1.90.
The company is also receiving takeover interest from a number of investment funds, most notably U.S.-based private equity firms Cerberus Capital Management and JF Lehman & Company.
Andrew and Nicola Forrest currently own 19.6 percent of Austal through their investment vehicle Tattarang. Other prominent shareholders include founder John Rothwell, Texas-based hedge fund Dimensional Fund Advisors and global financial titan Vanguard.
Military Buildup
As geopolitical tensions heighten across the globe, the world’s two largest powers are spurring initiatives to actively bolster their militaristic capabilities.The U.S. military is particularly consolidating its forces in the wake of the Chinese communist regime’s aggressive expansion into the Indo-Pacific.
U.S. military spending in FY22 was its highest on record at $876.94 billion, having maintained an upward trend in spending that has existed since 2014 and is projected to continue.
Similarly, across the Pacific Ocean, the Chinese Communist Party’s (CCP) continues to expand its military.
According to the Pentagon, the People’s Liberation Army (PLA) is the world’s largest active-duty military force consisting of approximately 2.185 million active, 1.17 million reserve, and 660,000 paramilitary personnel for a total of 4 million.
It also possesses the largest navy in the world numerically with over 370 ships and submarines, comprising more than 140 major surface combatants.
By contrast, the U.S. military has 1.4 million active personnel but possesses more advanced technological weaponry and intelligence apparatus.
