Austal USA finalizes San Diego ship repair deal

Rusty Murdaugh [Photo: Austal USA]

Austal USA reports that it has finalized its deal to establish a ship repair facility in the Port of San Diego. The deal includes a long-term lease of a waterfront site in National City adjacent to Naval Base San Diego. Austal USA’s 15-acre site will focus on work for U.S. Navy, Military Sealift Command, and U.S. Coast Guard ships.

The site will be centered on a newly-built dry dock designed to efficiently dock small surface combatants and similar sized ships.

“This agreement marks a major milestone in the continued growth of Austal USA’s services business. When the dry dock is delivered we will be able to provide the Navy a highly capable full-service repair facility located in the homeport of San Diego,” said Austal USA president Rusty Murdaugh. “We know how valuable this additional repair facility is to our customers, the Navy, Coast Guard, and Military Sealift Command, and we are ready to meet the growing demand. We are also looking forward to working closely with the National City community as we expand our presence in the area.”

According to a filing by Henderson, Western Australia-headquartered parent company Austal Limited (ASX: ASB) the lease of the San Diego facility has has a duration of 27 years. Austal Limited estimates the purchase of the yard and build of a floating dry dock will cost a total of about US$80 million (about A$112.5 million), to be funded from the company’s cash reserves.

FULL SERVICE SHIP REPAIR

Austal USA will establish a full service ship repair capability providing maintenance and modernization for small surface combatants, unmanned and autonomous vessels, and other ships. The new dry dock will be optimized to execute availabilities on Littoral Combat Ships (LCS) and other small surface combatants. Services will include technical and material support, topside work, and drydocking availabilities. The new facility will enable more availabilities to be completed in the vessels’ home port of San Diego reducing the strain on the fleet and sailors.

Austal USA says the lease agreement follows a string of maintenance contract awards. In August, the Navy awarded Austal SEC East and West contracts positioning the company to service all Littoral Combat Ships. In November, Austal received a contract to provide services and support for LCS deployed to the Western Pacific and Indian Ocean. These contracts are the result of the company’s significant investment in and continued focus on growing its service business and centers in Mobile, San Diego, and Singapore.