Sydney: Australia on Friday said France, Germany and Japan were potential partners to design and build its next generation of submarines in what will be its biggest ever defence procurement programme.
As Canberra seeks to replace its ageing Collins Class fleet, Defence Minister Kevin Andrews said all three countries had proven military design and build capabilities and were currently producing submarines.
"France, Germany and Japan have emerged as potential international partners," he said.
"The competitive evaluation process will help the government balance important considerations including capability, cost, schedule, and risk. Interoperability with our alliance partner, the United States, will also be a fundamental consideration."
The diesel and electric-powered Collins Class submarines are set to be retired from the mid-2020s, with the programme to replace them the largest defence procurement project in Australian history worth some Aus$50 billion (US$39 billion).
The Australian military confirmed last month that it was in talks with Japan and others on the design and production but this is the first time it has narrowed down the countries it would invite to bid to be part of the process.
Andrews said the government would seek proposals from the three with options for designing and building the submarines overseas, in Australia or a combination of both.
He added that he expected significant work to be undertaken in Australia during the build phase.
There are concerns the domestic ship-building industry would be fatally hurt by Canberra choosing off-the-shelf submarines from Japan or another international supplier.
Andrews said the competitive evaluation process was expected to take 10 months, after which one international partner would be chosen.
"The process... provides a pathway for Australian industry to maximise its involvement in the programme, whilst not compromising capability, cost, programme schedule or risk," he added.
Besides matching the range and endurance of the Collins Class, the new generation of subs are expected to offer superior sensor performance and stealth characteristics.
The government`s preferred combat system and main armament is the heavyweight torpedo jointly developed between the United States and Australia.
Prime Minister Tony Abbott said while China and Russia had expertise in the design and construction of submarines, Canberra did not usually choose to partner with those countries in military matters.
"It`s very important that we get the best possible submarines at the best possible price," he told reporters.