IRIA News

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The Australian government has finalized a strategic shipbuilding agreement with Austal to construct more than two dozen new landing craft for the Army, as Canberra seeks to close a widening gap in its amphibious warfare capability.

Under the agreement, Austal Defense Australia will serve as the prime contractor for the two core programs under Project LAND 8710, Landing Craft Medium (LCM) and Landing Craft Heavy (LCH). The company will build 18 LCMs and 8 LCHs at its Henderson shipyard in Western Australia.

The contract is part of the newly established Strategic Shipbuilding Agreement (SSA), which designates Austal Defense Australia as the Commonwealth’s preferred builder for Tier 2 naval vessels. The agreement also aims to foster sovereign shipbuilding capability, reinforce supply chains, and support thousands of jobs.

Strategic goals and timeline

The LCM program, estimated at $840, is expected to be finalized by Q1 of fiscal year 2026. Deliveries will span eight years, with the final vessel due by 2032. The LCH program, based on the Damen LST 100 design, will follow, but formal contracts have yet to be signed.

The medium landing craft will weigh around 500 tons, while the heavy variant will come in at 3,000 to 5,000 tons, capable of carrying significant loads to support future expeditionary operations.

Austal CEO Paddy Gregg called the government’s approval “a defining moment,” saying that the agreement cements the company’s role in helping the Commonwealth of Australia meeting its defense goals and establishes Austal as Australia’s strategic shipbuilder for Tier 2 vessels in Western Australia.

“The Commonwealth seeks to ensure Australia’s defense procurement possesses sovereignty and greater certainty, in an increasingly complex strategic environment and in alignment with the Commonwealth’s continuous naval shipbuilding policies,” Gregg added.

Capability gap

The decision comes amid growing concern over Australia’s existing amphibious fleet. During Exercise Talisman Sabre 2025 in July, a joint multinational military exercise, the Australian Army relied on U.S. Army landing craft to transport Abrams tanks, highlighting Canberra’s shortfall in indigenous amphibious capability.

On July 19, a U.S. Army vessel, USAV Paulus Hook, transported several M1A2 SEPv3 Abrams tanks from Townsville to Gladstone in a logistical move that underscored the importance of ship-to-shore assets. The 584-tonne LCU completed a 22-day voyage from Japan, and its deployment was seen as a preview of capabilities Australia hopes to develop.

Lieutenant Eugene Lynch described the mission as essential: “Our focus is on the Indo-Pacific region, essential to our ability to project force into the region for the defense of Australia’s strategic interests.”

Despite ambitions to introduce new platforms, delays are mounting. According to Australian media, the LCM project is facing up to two years’ delay, largely due to design immaturity and stalled contracts. A retired British admiral has reportedly been brought in to mediate between Austal, designer Birdon Group, and the Australian Defense Department.

Impact on future operations

The Austal-Birdon-designed LCM, with a 90-tonne payload, was supposed to begin construction by 2026. However, without finalized contracts or sea trials, the timeline now appears uncertain. Similarly, the first Damen-designed LCH, expected to displace around 3,900 tonnes, may not enter service until after 2028.

Australia currently operates Vietnam War-era LCM-8s, which cannot carry modern tanks. Even the Royal Australian Navy’s LCM-1Es, housed on Canberra-class amphibious ships, are not yet certified to carry the newer, heavier M1A2 SEPv3 tanks.

Austal is expected to manage the entire production lifecycle of the new vessels, design, integration, testing, and delivery, under a 15-year SSA framework. The agreement includes a “painshare/gainshare” cost structure aimed at incentivizing efficiency and reducing program risk.

Future planning and US cooperation

As the Australian Army prepares for future amphibious deployments, it continues to lean on U.S. platforms and training opportunities. Australian soldiers are now training at Fort Eustis in Virginia, with others scheduled to join Orient Shield 2025 in Japan to gain hands-on experience on U.S. landing craft.

While Canberra’s long-term vision for “impactful projection” in the Indo-Pacific remains intact, the current capability gap persists. The Austal landing craft deal signals a major step toward closing it, but until construction begins, reliance on allies will remain a critical piece of Australia’s amphibious posture.