Construction of the Royal Australian Navy’s auxiliary oiler and replenishment ships (AORs) has begun, following the successful completion of the critical design review.

Navantia was awarded the contract to construct the ships, which will replace the Navy’s current supply ships HMA Ships Success and Sirius. The new AORs are scheduled to be delivered by 2019 and 2020.

Navantia Australia managing director Francisco Baron stated that this marks an important milestone in the SEA1654 project.

Baron said: "Today we have reached the first major milestone in the delivery of this key enabling capability to Navy.

"Navantia understands the importance of meeting targets at the initial design and build stages to deliver a capability on time and on budget and that’s why the importance of cutting steel today, on schedule, is so important."

The Australian industry will play a key role in building the AORs with a minimum $120m investment into Australian products, skills and expertise. As part of this, 4500t of the steel has been sourced from BlueScope.

Navantia Australia board member Warren King has said that Navantia’s engagement with the Australian industry to build the AORs highlights the capability and capacity of local businesses, which has been further demonstrated in the build of the Navantia-designed Hobart Class destroyers.

King stated: "We have a world-class supply chain right here in Australia – it’s a combination of the right skills, right people and right attitude – that’s something Navantia Australia has come to know over the years engaged with the Australian supply chain."

Mr King has indicated that Navantia’s understanding of the Australian supply chain makes Navantia confident that their bid for the SEA5000 Future Frigates project will provide the best opportunities for Australian industry: "Navantia sees our local industry as critical to the build of the Future Frigates and critical to the future success of a sovereign shipbuilding industry. It’s a relationship we at Navantia have invested in and will continue to develop to grow Navantia in Australia and to grow Australian industry.

In addition to BlueScope’s steel, the AORs Integrated Platform Management System, the structure that controls and monitors all the platform systems, will be built in Australia by NSAG. Navantia’s joint venture (JV) with Adelaide-based SAGE Automation’s Hobart’s Taylor Bros will supply a range of services, including hospital, laundry and galley fitouts, while SAAB Australia will provide the combat management systems. Raytheon Australia will deliver the communications systems.

Navantia is fully responsible for the sustainment of both ships for their first five years of operation and is already working in the sustainment arrangements for the future ships, which will imply a bigger presence in Sydney, and the opening of an office in Western Australia to support and maintain both ships.