US government to invest US$50 million in Austal USA shipbuilding and maintenance capacity

Austal USA's Mobile shipyard (Photo: Austal)

The US Government, through the Department of Defense (DoD), has confirmed a US$50 million Defense Production Act Title III Agreement (DPA Agreement) with shipbuilder Austal USA.

The DPA Agreement will maintain, protect, and expand US domestic production of steel shipbuilding capability and capacity through capital projects that will be executed over the next 24 months, beginning in June 2020.

The DoD entered into the agreement with Austal USA as part of the national response to Covid-19 to maintain, protect, and expand critical domestic shipbuilding and maintenance capacity. The scope of this agreement is still to be definitised but subject to agreement with the DoD.

Austal intends to use the funds to commence investment in the development of additional capacity for steel naval vessel construction at its shipyard in Mobile, Alabama.

It is likely that Austal will match the DPA Agreement funding which would take the total investment to around US$100 million.

Further details about the purpose and specific use of these funds will be released as they are agreed between Austal and the DoD in the following months.

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