Xenophon attacks govt shipbuilding plan

Politicians from Queensland and South Australia have separate gripes about the federal government's ship building announcements.

Independent senator Nick Xenophon Source: AAP

Independent senator Nick Xenophon has branded the South Australian leg of the federal government's $40 billion naval vessel program a "flat-pack Ikea exercise" that will add little value to the state's economy.

At the same time, government backbenchers are spitting chips over the decision to overlook opportunities for far north Queensland centres to participate in the massive project.

Under the program a new fleet of 12 offshore patrol boats will be built in Adelaide from 2018 to replace the smaller Armidale-class vessels, which were built in WA.

The work then will go back to WA in 2020, when construction begins in Adelaide on the navy's new frigates.

As well, Austal Ships in WA will build up to 21 replacement steel-hulled Pacific patrol boats at its Henderson shipyards.

Senator Xenophon says there's still no certainty for South Australia because contracts have yet to be signed.

"This is a desperate attempt by the coalition to shore up their support in South Australia," he told reporters in Canberra on Tuesday.

"It could end up being a flat-pack Ikea exercise where we do the assembling in South Australia but there is very little added value - where the steel is cut somewhere else, where the blocks are built somewhere else."

Senator Xenophon believes there should be one centre of excellence for ship building in Australia.

But he denies being greedy for his state, saying it would cost taxpayers millions to move production interstate.

SA Employment Minister Kyam Maher has hailed the job opportunities likely to flow from the boat projects.

However, Cairns-based Liberal MP Warren Entsch is gutted his city was overlooked.

"It's fair to say that the customs boats built by Austal left a lot to be desired, given that we're now seeing a lot of these aluminium vessels undergoing repairs for cracks."

Townsville-based senator Ian MacDonald is also unhappy.

"The construction of the Pacific patrols boats would have been a wonderful employment generator and confidence boost for the north," he said.

Cairns has won the contract for maintenance of the boats.