The French submarine affair is costing Australia a fortune

Posted on April 1, 2022, 6:46 PM

In Australia, the issue of a canceled submarine contract with France did not end up making waves. Alors que le pays entre à nouveau en période électorale, le gouvernement, interrogé par un sénateur d’opposition, a dû admettre que le renoncement à l’achat de 12 sous-marins de type Barracuda commandé en 2016 à la France, allai lu Wealth.

Australia will have spent in this failed decade as much as 5.5 billion Australian dollars, or 3.7 billion euros. So would taxpayers have to shell out $5.5 billion to buy non-existent submarines? asked Senator Penny Wong during a hearing in Canberra. Deputy Defense Secretary Tony Dalton responded that “the final negotiated settlement would be in the region of A$5.5 billion.”

Negotiations are still ongoing with Naval Group

Dalton added that the exact final amount is not yet clear as negotiations on the cost of completing the arena are still ongoing with Naval Group. But overall, Australia has already paid around €840 million in revenue to Naval Group to design and build future submarines, not to mention millions also paid to Lockheed Martin, which was responsible for the combat system, and millions spent on the public. Contract management, claims of dozens of Australian companies on board the contract, etc.

At Naval Group we are only pointing out that the remaining amount to be paid in the course of the ongoing negotiations will not represent much compared to this amount of 3.7 billion, since it is only a matter of negotiating unpaid bills, dismissal costs, repatriation, computer costs, in short all Contract termination costs.

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Indeed, when Australian Prime Minister Scott Morrison decided last year to terminate the contract with Naval Group to opt to acquire nuclear-powered submarines promised by the United States — as part of a wide-ranging security agreement tied to Washington and London — a window of opportunity in the contract allowed him to do so. . This prevents Naval Group from claiming compensation for breach of contract.

He prevents. Between 2016 and 2021, Australia has already incurred heavy expenses, first to get the design of the submarine it no longer wants, but also to build the Adelaide shipyard where the submarines will be built. A site that may not conform to the future US proposal, given that Washington and London must submit a bid next year.

Exorbitant bill for a replacement is still unknown

Yesterday, in the face of opposition attacks, Finance Minister Simon Birmingham defended the decision to scrap the French deal as “necessary for decades to come”. He defended himself, “It must be admitted that we knew the consequences would be great.” As a reminder, Scott Morrison has made it clear that he now wants nuclear-powered submarines in light of China’s threatening situation.

According to a study published in December by the Australian Institute for Strategic Policy, the AUKUS program will cost more than $80 billion and take decades to become operational. But at this point, Australians still have no idea what submarines they might one day have. Naval News publishes studies of the nuclear adaptation of existing Collin’s submarines rather than purchasing Astute-class (British model) or Virginia (American model) nuclear submarines.

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