The $2.5m Australian Department of Defence (DoD) sponsored report on the country’s naval shipbuilding industrial base has been published by Rand Corporation.

The report titled ‘Australia’s Naval Shipbuilding Enterprise: Preparing for the 21st Century’ was conducted within the Acquisition and Technology Policy Center of the Rand national security research division (NSRD).

Commissioned in September 2014, the report analyses the shipbuilding capability and ship repair industrial bases in Australia to meet the demands of current and future naval surface ship programmes.

According to the report, domestic production of naval ships in Australia currently carries a price premium that is estimated to be between 30% and 40% compared with similar ships built overseas.

The report recommended that the price premium for building in Australia could drop to nearly half that level over time.

However, is has emerged that the shipbuilding costs recommended by Rand in the report, do not include submarine costs in its calculations.

"The report analyses the shipbuilding capability and ship repair industrial bases in Australia."

Lead researcher for the report, John Birkler said: "We were asked not to include submarines."

He also addressed reports that claim Rand had prior knowledge that the Australian Government planned to build submarines offshore.

Birkler said: "That was the strategy that was under consideration for the future submarine at the time we did the study, to build it offshore and it would be a modified, existing design.

"That was the strategy at the time when we did the bulk of the analysis. I know it’s changed since then, but when we were doing the study, that was what was under consideration."

This development follows the announcement of an acquisition strategy for the future submarine programme by the Australian Government in February.

France, Germany and Japan are expected to be invited to participate in the competitive evaluation process, which is expected to last for ten months.

Defence Minister Kevin Andrews said that the report was: "One of the most detailed studies undertaken into the Australian naval shipbuilding industry.

"The sustainability and viability of naval shipbuilding in Australia must be predicated on major reform of the industry and significant productivity improvements, as well as improvements to defence’s acquisition and sustainment processes."