Australian Department of Defence has awarded a A$389m ($259.8m) contract to Lendlease Building to modernise the Royal Australian Navy’s (RAN) HMAS Watson facility.

HMAS Watson is RAN’s principal warfare and navigation training establishment located on the South Head of Sydney Harbour.

Lendlease will start upgrade work within weeks under the managing contractor contract awarded by Minister for Defence Industry Melissa Price.

Following the upgrades, sailors at HMAS Watson will get new and improved training facilities.

Price said: “This investment ensures HMAS Watson will support training for over 1,300 students each year. A new training precinct, new living-in accommodation for at least 236 trainees, a medical clinic, and upgrades to existing water, electrical and communication services, base security and galleys are all part of the project.

“Around 360 construction personnel will be employed at the site when construction reaches its peak, and it is expected that another 10,000 personnel from the local manufacturing and transport industries will benefit.”

Price also noted that Lendlease will increase opportunities for local businesses to supply goods and services for the project, under the Morrison government’s Defence Policy for Industry Participation.

The company has pledged a target of awarding 95% of its sub-contract packages to businesses located within 60km of the HMAS Watson training centre.

Price further added: “Not only is this project a great opportunity for local small businesses, but it is providing our hardworking sailors at HMAS Watson with new and improved facilities for their training.”

Completion of the upgrade is expected by mid-2026.

The project is aimed at addressing functionality deficiencies and capacity constraints in facilities and infrastructure at the facility.

HMAS Watson provides basic and advanced training for Junior and Senior Sailors in the Combat System Category and Junior Seaman Officers in ship handling, navigation and tactics.

In September 2018, the Department of Defence announced an investment of more than A$80m ($57.50m) to expand and upgrade the RAN’s simulation trainer fleet.