Home News Submarines: breaking the “contract of the century” will cost Australia 3.7 billion...

Submarines: breaking the “contract of the century” will cost Australia 3.7 billion euros


The diplomatic incident will have very important financial consequences. Last year Australian Prime Minister Scott Morrison broke the contract to deliver French submarines worth 56 billion euros, in favor of a historic security agreement with Washington and London for alternatives nuclear powered.

To end its agreement with the French industrialist Naval Group, Canberra will have to pay up to 5.5 billion Australian dollars (around 3.7 billion euros) to Naval Group, Lockheed Martin and Australian industrialists have acknowledged the leaders of the country.

Canberra MoD Deputy Secretary Mr Dalton, however, said the exact amount was not yet clear as negotiations with Naval Group were ongoing.

According to AFP, he specifies that the amount presented to Australian parliamentarians “corresponds to all the expenses incurred since 2016 covering all the components of the program” of the submarines. This includes “the costs of managing the program by the Australians, the share of Naval Group, that of Lockheed Martin, supplier of the combat system, but also the construction of the shipyard at Osborne, etc.”.

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A laborious contract

Finance Minister Simon Birmingham supports the decision that the abandonment of the French agreement was “necessary for decades to come”, he specifies: “It must be admitted that we knew that the consequences would be significant”. As a reminder, Scott Morrison had explained that he now wanted nuclear-powered submarines in view of the threatening attitude of China.

According to a study published in December by the Australian Institute of Strategic Policy, the AUKUS program will cost more than $80 billion and will take decades to become operational.

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