Minister for Defense Stephen Smith and Minister for Defense Materiel Jason Clare made the joint announcement, saying the Bushmaster has effectively provided Australian troops with mobility and protection during combat, including against improvised explosive devices.
"It has unquestionably saved lives in Afghanistan," a Defense Department statement said.
"Thirty-one Bushmasters have been damaged beyond repair in recent years and their replacement with a further 70 vehicles will support current and future operations."
The department also will evaluate a range of enhancements to the Bushmaster vehicle to increase its level of protection. "If these enhancements are viable they may be applied to the 101 vehicles," the statement said.
But the purchase of the 4X4 Bushmasters from manufacturer Thales Australia -- formerly ADI -- is subject to the satisfactory negotiation of a contract with acceptable terms and conditions including performance of the vehicle, unit cost and delivery schedule.
Thales makes the Bushmasters at their protected mobility systems manufacturing facility at Bendigo, Victoria. The army acquired its first batch of 300 Bushmasters in August 2004 and delivery of the latest variants in 2008.
In an interview with Sky News in Australia, Smith said Australia has around 700 Bushmasters, many of which are in Afghanistan. But Australian troops have been subject to some serious IED incidents that have heavily damaged their vehicles.
Smith also praised the Bushmasters.
"It's essentially an armored troop carrier and while it's been the subject of some very, very bad IED in incidences, we haven't lost any anyone and we want that to continue, so it's a very important decision in our view.
"They'll be prepared to what's called Middle East Area of Operation standard so comparable to what we have in Afghanistan. It's essentially to make sure we're covered for Afghanistan."
In January Raytheon Australia won a $70 million contract to supply position reporting systems, many of which are being put into Bushmasters and also the army's M113 APCs, made by various manufacturers, including BAE.
The deal, signed with the military's procurement group Defense Materiel Organization, is for Raytheon's Enhanced Position Location Reporting System, its MicroLight radios and associated support. Raytheon will supply around 1,000 of the radios, support equipment and maintenance work to the Australian army.
The purchase is part of Joint Project 2072, the army's progressive purchase of an integrated Battlespace Communications System to coordinate operations during battle.
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