Japan's bid to build next-generation Aussie submarines dubbed "weakest"

Japan's bid to build Australia's next-generation naval submarine fleet has been determined the weakest of three being considered, as the Turnbull government edges loser to a final decision on the contract.

Firms from Japan as well as France and Germany are vying for the contracts which could be worth up to 40 billion U.S. dollars, but a source within the government's National Security Committee (NSC) has told local media that the Japanese bid was the weakest while the French company DCNS had the strongest proposal.

The revelation comes after dumped Prime Minister Tony Abbott all but awarded the contract to the Japanese company when he was in power last year.

According to News Corp, a Japanese official said while he considered the Japanese sub to be the best product, he lamented that Japan's lack of experience in exporting military products to other countries, and said this might have resulted in its government submitting a "weaker" bid than the German and French proposals.

Meanwhile, head of Australian operations for German shipbuilder TKMS, John White, rubbished claims that his company's submarines would cost 30 percent more to build in Australia than overseas, something which could weaken the German bid.

"We made it clear that the project could be undertaken in Australia at a price of no more than 16 billion U.S. dollars and that price would not vary," White told News Corp.

"With our vast experience of building submarines both in our Kiel shipyard and for foreign navies in their own countries, we have adopted a proven approach using a digital shipyard system which means no cost variations unless the customer has changed its technical requirements during the design and build process."

French company DCNS's Hevre Guillou said their bid was strengthened by the commitment to build, maintain and modernize the fleet in Australia.

"After 10 years you have to upgrade things as technology improves to keep up your regional superiority. You need not only a database and a supply chain, you also need engineering know-how and know-why," Guillou said.

An NSC decision on the submarines is due in coming weeks, however, the recommendation must also be approved by cabinet before the final contract is awarded.