The prospect of Australia buying Japanese submarines is poised to take a significant step forward with Tokyo expected to agree within weeks to hand over classified technical data on their prized Soryu Class boat.
Such a move would signal Japan's full-fledged entry into the Abbott government's "competitive evaluation process" in which Japan is pitted against Germany and France to help design and build Australia's next fleet of submarines.
Tony Abbott's long-standing preference for the Japanese option is an open secret. The government is understood to have been close to announcing a deal last year but put the brakes on going public as several obstacles emerged.
One was political considerations in South Australia, where the government-owned shipbuilder ASC is based. But another has been Japan's inexperience in selling military hardware to other countries and its own wariness about becoming a major arms exporter, given its pacifist post-war constitution.
The design and building of up to 12 advanced stealth submarines is a generational project expected to cost at least $40 billion.
Defence Minister Kevin Andrews spoke with his Japanese counterpart Gen Nakatani on Wednesday and urged Japan to participate in the evaluation process.
His spokesman said on Thursday: "During a phone call with his Japanese counterpart, Minister Andrews formally invited Japan to participate in the competitive evaluation process and through this process be considered as a possible international partner for Australia's Future Submarine Program."
News agency Reuters cited two unnamed Japanese officials saying that Japan would agree this month to disclose the necessary technical data that Australia's Defence Department needs to make a proper assessment of the Japanese bid.
This is an unprecedented move for Japan, which has only ever given such high-level classified military data to its close ally the United States.
Fairfax Media understands there is also confidence at the Australian end that Japan will agree to share the technical data.
The Japanese bid is controversial in Australia because it could mean much of the building work is done in Japan rather than in local shipyards such as the ASC in Adelaide. Both Germany and France have publicly said they can do most of the building in Australia, but Japan has not made such a commitment.
That said, the Abbott government, as well as senior defence officials and experts, have said that about two-thirds of the work will come through the lifelong maintenance of the submarines, rather than building them, meaning there will be more local jobs either way.
The Soryu Class, while generally admired as a good conventional submarine, does not have the necessary range that Australia needs for its submarines. Japan would therefore need effectively to design a new boat, which raises the risk involved.
