Australia to Fund $600 Million for Philippines Navy’s OPV

MANILA — Australian shipbuilder Austal’s proposed $600 million sale of patrol vessels to the Philippine Navy has cleared a major hurdle after Manila agreed to resume loan negotiations with countries that backed a United Nations probe of President Rodrigo Duterte’s drug war.

The Austal Philippine Navy OPV is based on a proven platform that has demonstrated success operating in tropical environments and conducting border patrol and maritime operations.

The Austal Philippine Navy OPV features an aviation deck enabling helicopter and Unmanned Aerial Systems (UAS) missions.

The vessel is arranged with a starboard boat deck and stern well for the safe and rapid launch and recovery of RHIBs. The Austal Philippine Navy OPV is fitted with a mission bay and large aft storage area to facilitate the embarkation of containerised mission modules.

Executive Secretary Salvador Medialdea lifted the suspension of negotiations for loans and grants from 18 countries that endorsed a resolution in July calling for an investigation of Duterte’s anti-narcotics crackdown, which has killed thousands of suspects and alarmed human rights activists. The suspension was lifted in a memo to government agencies on Feb. 27 and made public on Wednesday.

Australia, which has a visiting forces agreement with the Philippines, has been keen to fund the project, which seeks to bolster the Philippine Navy’s patrol capability in the disputed South China Sea, much of which is claimed by Beijing.

Canberra’s financial backing will also support Austal, which has tendered for the contract. Dubbed “Austal Philippine Navy OPV” on Austal’s website, the ship features an aviation deck to enable helicopter and unmanned aerial systems missions.

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Philippine Navy chief Giovanni Carlo Bacordo told the Australian newspaper that it was up to the Department of National Defense to decide on the project. “[But] I don’t see any obstacle with the Philippine Navy’s OPV project,” Bacordo said.

In October, Lorenzana said he wanted the project to begin this year to generate more local jobs. Austal plans to build the vessels at its yard on the central Philippine island of Cebu.

The company is also looking to expand in the Philippines. Austal, which specializes in passenger and military ships, and U.S. private equity fund Cerberus Capital Management are in a joint bid to take over the bankrupt Hanjin shipyard in Subic Bay, a former U.S. naval base which opens to the South China Sea.

In December, Austal and Cerberus made an offer to the creditors of the 300 hectare yard, which has also had interest from China, but the deal has yet to be closed.

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