Dock call could shape Henderson

There is plenty of precedent for major promises to be made in the months, weeks, and days leading up to a federal election.

Jostling for votes, political parties of all stripes have been able to promise the world in the knowledge that, should they not win the ballot, their opposition may never follow through with the plans.

In 2022, a little over two months out from an election, then prime minister Scott Morrison announced a $4.3 billion commitment to the construction of a dry dock at the Australian Marine Complex (AMC) shipbuilding precinct at Henderson, south of Perth.

The dry dock was to be the only facility of its kind on this side of the country, and just the second in the nation.

The announcement excited a shipbuilding industry south of Perth crying out for certainty, and a local council, City of Cockburn, which had an eye to the immediate and broader economic impacts.

As of 2024, the promise remains undelivered.

Mr Morrison did not win the election, and the multi-billion-dollar dry dock had not been budgeted for by the Labor government of Anthony Albanese.

The facility remains on the wish-list of those who supported it in 2022.

A dry dock at Henderson would allow for critical maintenance on parts of large, ocean-going vessels that are inaccessible when they are in the water.

Australia’s only dry dock facility is the 230-million-litre James Cook Graving Dock at Sydney’s Garden Island. It was built during WWII.

The ageing James Cook facility will be closed for a period of essential maintenance from 2026.

The Department of Defence (Defence) recognises the need for a dry dock in Western Australia, given the impending arrival of nuclear submarines belonging to the nation’s Aukus partners – the US and UK – at HMAS Stirling, off Rockingham, from 2027.

Australia plans to acquire nuclear subs of its own from the early 2030s.

The department’s generational Defence Strategic Review, released in 2023, advocated for a WA dry dock

– likely to be at Henderson – but stressed the need for consolidation of activities in the area.

It has been suggested a dry dock would be needed in time for Australia’s acquisition of the Virginia-class nuclear subs, in 2032.

But Defence Minister Richard Marles, on a visit to Perth in June, conceded that a facility could be needed in time for the permanent stationing of allied subs in the region.

“For the submarine rotational force to be meaningful, and for the US to invest in it the way we want them to, we will need to have capability here earlier than servicing our own submarines,” Mr Marles said at the Indian Ocean Defence Conference in July.

“The timeline, I don’t think, is driven by our own subs. It’s going to be driven by America’s subs, which will be operating out of here in just a few years’ time.”

To some extent, those vessels are already arriving.

In August, Australian naval officers became the first non-US nationals to carry out maintenance work on a US Virginia-class nuclear sub at Garden Island, alongside US submariners.

A Henderson Master Plan report is being compiled by US engineering company Bechtel, guiding a future vision for the precinct.

Defence, which has commissioned the report, expects that work to inform options it puts to government late in 2024.

“As one of two major shipbuilding hubs in Australia, Henderson is an asset of national importance and pivotal to the build and sustainment of vessels for the Australian Defence Force,” a department spokesperson told Business News.

Richard Marles addresses media at HMAS Stirling during a recent visit to Perth. Photo: Michael O’Brien

“Defence is working closely with the WA government and relevant commercial entities on options to consolidate the Henderson shipyard, consistent with the recommendations of the Defence Strategic Review and the government’s response to the review.”

The defence minister’s comments, and those of the department, suggest there is a political urgency around WA’s infrastructure.

However, the promise of critical infrastructure – potentially a dry dock – in the precinct comes with a caveat in the form of a consolidation of activity at Henderson.

Call to arms

Henderson’s streets are few, but busy, winding their way through an industrial precinct where space is not necessarily at a premium, but prime territory on the coast is hard to come by.

Defence activity has ratcheted up and down in recent years, but a 2023 commitment by the federal government to make Austal WA’s defence strategic shipbuilder of choice late last year has improved certainty, for some.

The heads of agreement and the work already announced means Austal is best placed to benefit from a maintained pipeline of government work over the decades ahead, as the nation builds its largest fleet of naval vessels since WWII.

Austal is primed to build the next generation of defence ships on the west coast.

Others in the area, like Germany-headquartered Luerssen, have had their work cut.

Luerssen was engaged to deliver 12 Arafura-class offshore patrol vessels (OPVs) for the Royal Australian Navy in 2018; a figure halved earlier this year as defence reprioritised its investment.

That decision also had implications for Civmec, Henderson’s largest landholder, which was engaged by Luerssen for block fabrication on the OPVs.

Luerssen staff remain onsite at Civmec’s assembly hall, delivering the last of the OPVs contracted to Defence, but that work will come to an end earlier than expected.

In light of that outcome, Civmec – a multidisciplinary construction and engineering service provider with more than 200,000 square metres at Henderson – has moved to shore up its defence sector work.

On the same July day Mr Marles stressed the importance of a WA dry dock to the nation’s strategic interests, Civmec and Austal announced they would form a joint venture to tender for the construction of as many as eight landing craft heavy vessels for Defence.

The JV would combine Civmec’s shipbuilding facilities, systems, steel manufacturing expertise and 4,000-strong workforce with Austal’s naval shipbuilding experience.

Austal chief executive Paddy Gregg said the JV would provide the government with immediate access to a larger pool of shipbuilding workers that could transition across projects in time.

Civmec believes the JV could open the opportunity to participate in future work worth more than $25 billion over the next decade.

The deal was a while in the making.

It follows a bid by Austal, Civmec and Navantia Australia to partner in the construction of six corvette vessels last year, which would involve the ships being built at Austal and Civmec’s Henderson facilities.

That tender now hinges on Navantia winning the work, and government confirmation of the contracting model for onshore builds.

“To be honest, Civmec and Austal have been talking at various levels about joint ventures and partnerships for the last two years,” Civmec defence general manager Mark Clay told Business News.

“It’s not a new concept. We were just waiting for some firm announcements with respect to what programs are coming and what contracting model.

“And then, of course, submarine maintenance potentially coming to the area sort of threw a spanner in the works.

“Henderson’s consolidation is being floated around but there is no real structure yet as to what that might look like.”

In its JV announcement, Civmec alluded to a need to expand its already significant footprint at Henderson to slot an increased defence scope into its diversified work pipeline.

At the height of the OPV program, Mr Clay estimates work in the facility was around 20 per cent shipbuilding, with the bulk in resources and oil and gas infrastructure.

Civmec wants to increase the amount of public work on its books to 40 per cent and considers defence a key lever it can pull in meeting that goal.

However, expansion would be required to free-up Civmec’s massive assembly hall to accommodate ships on the scale of a heavy landing craft.

“The certainty of going past this point would be ... expansion beyond Civmec’s current facility to service those large shipbuilding programs,” Mr Clay said.

“It would then be about what that means for ongoing resources, oil and gas, and infrastructure work.”

That presence could involve the relocation of some of Civmec’s work to other parts of Henderson, to free-up valuable coastal space without compromising its other areas of business.

Not all Civmec’s work requires coastal access, however, which comes at a premium in the state’s premier shipbuilding and maintenance precinct.

“There’s lots of room for dry docks, graving docks, synchro lifts,” Mr Clay said.

“But at the same time, the Henderson waterfront access is quite restricted.

“You can’t go any further south and it’s quite limited going further north without serious investment.

“It’s all about getting the best value for money with the strip of land that we have.”

Civmec’s assembly hall abuts the government-owned AMC common-user facility, providing local proponents access to deep water.

Much of the land at Henderson is state-owned, and the precinct’s future make-up – including land access – is likely to be clearer once Bechtel’s work is done and Austal’s Defence agreement is better defined.

But a dry dock would be welcome.

Mark Clay says Civmec hopes to expand its presence in Henderson. Photo: Michael O’Brien

“We will need significant investment in either dry docks, synchro lifts or floating docks to support nuclear submarine sustainment, large ship repair and acquisition builds,” Mr Clay said.

“It’s required. At the moment we have a floating dock, but it’s limited in its weight transfer on and off.

“These bigger ships, while the dock could handle it, you can’t get them on and off the dock.”

Local fallout

Federal posturing and industrial adjustment are positive signs, but the City of Cockburn – in which the Henderson precinct lies – is keeping its powder dry.

Cockburn would be a major beneficiary of a dry dock, and its acting chief executive, Daniel Arndt, confirmed to Business News the council remained frustrated by the ongoing lack of certainty, which prompted the city to publish a rather downbeat response to the Defence Strategic Review last year.

Those concerns aside, the city projects a dry dock would increase jobs in the region, with benefits for trade, tertiary education and investment.

“The addition of a dry dock facility will enable the servicing and maintenance of larger, more complex vessels, not only in the defence sector but also commercial vessels,” Mr Arndt said.

The city also wants funding for grade separation at the intersection of Russell and Rockingham roads, a known traffic sore point, along with a commitment to connect the AMC to Cockburn Central and Fremantle via public transport.

For its part, the state is confident of its ability to land the facility.

Defence Industry Minister Paul Papalia did not confirm a dry dock was coming, but said imminent federal Defence announcements would mean, in time, the defence sector would become even more significant.

“It’s going to be really extraordinary, extraordinarily significant,” he said.

“Very soon we will be seeing defence industry become the second-largest sector in WA.

“For so long the state has, you know, desired and hoped for significant diversification.

“This is it.”

Mr Papalia said the consolidation of Henderson was a multifaceted job, involving not only physical consolidation, but workforce and skills collaboration.

The announcement by Austal and Civmec, and its details pertaining to a combined shipbuilding workforce, highlights this focus.

Civmec’s assembly hall has 53,000 square metres of usable floor space and 20 overhead cranes. Photo: Michael O’Brien

A relocation by Civmec of some of its non-defence work to areas back from the coast also appears to be on the radar.

Mr Papalia said while defence was the focus in the area, the government was mindful of its ability to support the traditional industries that had propped up Henderson over many years.

“In the event that we create a defence precinct, we’ve also got to care for the non-defence activities around Henderson and ensure they are enabled in another location outside of the defence precinct,” he said.

“A lot of the activity in that area, in fact, something like seventy-five per cent of the activity, is non-defence.

“We have to ensure that, whatever happens, our resources sector and our non-defence activities are accommodated somewhere else.”